As the leading international contract research organisations (CROs) start to announce their third-quarter results, a new US report suggests the trend towards outsourcing of clinical development may be reversing.

According to Streamlining Clinical Trials, the study published by pharmaceutical business intelligence specialist Cutting Edge Information, companies across the industry have significantly cut expenditure on outsourcing as a percentage of clinical development budgets in the last couple of years.

Comparisons with research by Cutting Edge in 2006 show that outsourcing as a proportion of the clinical development budget has dropped by an average of 20% for every phase of clinical trials, the report says. For Phase I studies, the outsourced portion of the budget has shrunk from 65% in 2006 to 35% of the average clinical development outlay in 2008. “The percentage increases as companies proceed into later phases of a trial,” Cutting Edge adds.

In their efforts to cut costs, pharmaceutical companies are not allowing CROs the same leeway as in the past, the study notes. A number of companies have introduced payment terms that are increasingly based on milestones, while others have begun to outsource only when the necessary resources are not available in-house.

“Companies are now realising that outsourcing does not necessarily make things easier, cheaper, or remove a burden from their plate,” comments David Richardson, the report’s lead author. “Research has appeared arguing against the cost-saving effects of outsourcing. Also, companies are being more frugal.”

Another advantage of keeping clinical development in-house, Richardson points out, is that it makes for “easier oversight because of institutional proximity, ensuring efficient and competent work, instead of spending the same time managing a CRO”.