Today, we’re diving into some intriguing questions:
How can big pharmaceutical companies and small providers work together more effectively?
What hidden costs and inefficiencies are lurking in traditional outsourcing models?
And how can innovative solutions transform these dynamics?
I’m joined by Sheila Mahoney, a seasoned drug development expert with over 25 years of experience. Sheila introduced us to LifeSciHub, a platform designed to streamline contracting processes and enhance collaboration.
Together, we explore how LifeSciHub’s approach not only improves cost-effectiveness but also ensures access to top-tier expertise.
Join us as we uncover new ways to optimize pharma collaborations for better outcomes.
Key Points:
- Introduction: The episode focuses on effective collaboration between big pharma and small providers.
- Questions: How can they work together effectively? What are the hidden costs and inefficiencies in outsourcing? How can innovative solutions help?
- Platform: Introduction to LifeSciHub and its streamlined contracting processes.
- Collaboration: Enhances collaboration between pharma and small providers.
- Cost-Effectiveness: LifeSciHub improves cost-effectiveness.
- Expertise: Ensures access to top-tier expertise.
- Optimization: Ways to optimize pharma collaborations for better outcomes.
We uncovered innovative solutions for enhancing collaboration between big pharmaceutical companies and small providers. Sheila’s insights into LifeSciHub reveal a transformative approach that streamlines contracting processes, improves cost-effectiveness, and ensures access to top-tier expertise.
By addressing the hidden costs and inefficiencies in traditional outsourcing models, LifeSciHub paves the way for optimized pharma collaborations.
If you found this episode valuable, please share it with your colleagues and friends. Together, we can spread the word about these groundbreaking strategies and drive positive change in the industry.
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Sheila Mahoney
Drug Development Cross Functionalist
In addition to independent consulting, Sheila is the creator of LifeSciHub, an actionable Community of small independent workforce businesses in Life Sciences R&D. “Talent is scarce” is a common refrain for drug sponsors and the vendor ecosystem. In the LifeSciHub Community outstanding expertise is abundant! But not as full-time employees. Our members prefer non-corporate org chart engagements, such as 10-20 hours a week, variable hour loads, long-term or even semi-permanent. retainer agreements, etc. These are all independently incorporated small businesses of 1, or up to 10 or 20. LifeSciHub also has many decentralized expert networks among our members. All drug development expertise domains are represented, from highly specialized skills to extremely highly specialized.
LifeSciHub is part of the “Future of Work” category, including creative workforce problem-solving such as crowdsourcing. The traditional enterprise org chart and full-time roles will always be here, but there are other ways to get work done, too! In drug development, we all have to get it done quicker, less expensive, and with higher quality than ever before. This is possible with LifeSciHub!
Transcript
Overcoming Challenges of Working Effectively Together: Pharma And Small Providers
[00:00:00] Alexander: Welcome to another episode of the Effective Statistician. And today I have Sheila on the show. Hi, Sheila. How are you doing?
[00:00:09] Sheila: I am doing fantastic today. Thank you so much. So happy to be here.
[00:00:13] Alexander: Yeah, it’s really, really good. I’m working together with Sheila behind the scenes for [00:00:20] actually quite some time already.
[00:00:21] And I learned about you through a common friend.
[00:00:29] Sheila: The small world.
[00:00:30] Alexander: It’s a small world. That’s a nice thing about networking, getting introduced and helping each other is a really, really good, good thing. And so [00:00:40] if you’re not networking, please do so you can get a lot of benefits from it and meet other people that can help you in ways that you wouldn’t have anticipated are actually possible. And that is Sheila’s business model. So Sheila, before we talk about your business [00:01:00] model, introduce yourself real quick.
[00:01:02] Sheila: Sure. I’m Sheila Mahoney. I am a drug development subject matter expert. I’ve worked in the industry for over 20 years. I refuse to say over 25 years, but it’s actually over 25 years.
[00:01:16] Hitting that 25 mark was pretty shocking, I must say. [00:01:20] I started in regulation on the sponsor side and Was part of the advent of electronic submission in terms of, you know, I actually was part of the team that consulted with FDA on their first electronic submission, first series of electronic submission guidelines.
[00:01:39] I [00:01:40] was part of several software development projects that were built. enterprise market leading software electronic publishing software products. And also I then went over to the vendor side and experienced that and what it’s like to be part of the vendor [00:02:00] ecosystem. And when that company was sold, I fairly rapidly became an independent consultant.
[00:02:07] And at that point I noticed inefficiencies. between drug sponsors being able to rapidly find and engage highly specialized small [00:02:20] businesses. And I created LifeSciHub in addition to my consulting practice in order to address that need. And so LifeSciHub is a quality by design for the business of drug development operations.
[00:02:37] And I think we’re going to be talking more about that [00:02:40] throughout the podcast.
[00:02:41] Alexander: Exactly. That is the topic of the episode today. So let’s first talk about these inefficiencies that you struggle with. So I have worked at big pharma companies and What I know is that the procurement department rather [00:03:00] wants to work with as few partners as possible because every new contract is basically a hassle, yeah?
[00:03:09] And of course procurement works not just with your, you know, The biostatistics department, but with all kinds of different departments and usually also beyond [00:03:20] R and D. And so they have lots of, lots of vendors and any new vendors and needs to go through kind of processes and things like that. And of course that is all a lot of money and hassle.
[00:03:33] Yeah. And so and I think see, say also think like, if we have a lot of [00:03:40] volume, then we can get great rebates from these different suppliers. So what, what’s your take on that?
[00:03:50] Sheila: I think there is economic sense to that model. I think that works. I think pharma has done a very good job of outsourcing in [00:04:00] general, better than air, what we’re seeing in the aerospace, which I have been watching with great interest, but there it is subject that model, which pharma companies, big pharma, especially apply across the board to all scenarios.
[00:04:19] starts to see [00:04:20] diminishing returns, and those diminishing returns are impact the organization when it comes to highly specialized expertise that’s required, rapid onboarding and there are lots of project team related Difficulties that are experienced as a result [00:04:40] of that. So large scale outsourcing definitely solves many problems.
[00:04:44] It is the best way for procurement and legal to, in their minds, mitigate risk. But one thing that is not calculated is it’s very easy to quantify and avoid risk. What’s harder to quantify, [00:05:00] especially in an operations sense is the benefit. So it’s very hard to justify the benefit. of working with small businesses in particular and justify having to add another contract.
[00:05:13] And that’s where the system starts to break down is when things are on the [00:05:20] margins or, or when something else is needed besides these models, which by the way, are 30 years old at this point. So we’ve really done a very good job of learning how to outsource and then Optimizing the outsourcing model. This now is the next step.
[00:05:39] Alexander: Yeah. [00:05:40] Okay. So one of the things that I always realized is when I want to have a specialist. Yeah. And I know many great specialists. Yeah. And say but my perception increases. Yeah. They are solopreneurs, yeah, [00:06:00] or they have small boutique, you know, companies that only have a couple of people that are highly specialized in, in a specific area.
[00:06:09] And now working with them is really, really difficult. Yeah. Sometimes you can only work with them through these big vendors, for example. [00:06:20] Yeah. Where you basically. Pay one of the big typical full service CROs to, yeah, contract that out to someone, someone else. And of course, these big service CROs will take their part on it.
[00:06:38] Yeah. [00:06:40] So For them, of course, it’s optimal if they purchase them as cheap as possible and sell them as expensive as possible. Yeah. And largely you don’t really know what happens, unless your kind of supplier actually tells you what he gets, [00:07:00] which I’m not completely sure whether that’s always kind of allowed.
[00:07:03] Is that what’s usually happening? Yeah.
[00:07:06] Sheila: Indeed. So what we have now is a giant subcontracting morass that is taking place, and a few things happen as a result of that. Just to your point, the [00:07:20] middleman, which really satisfies procurement and legal because they have a single contract. And everybody in the organization, meaning the drug sponsor, seems to think that competition between vendors will solve that problem.
[00:07:35] Like meaning that the middleman is incentivized to sell high and [00:07:40] buy their expertise very, very low. So what are they, because nobody knows what that markup is. So, and, and oftentimes you don’t even know that subcontractors are being utilized. Like there’s no visibility there. It is just something that is, you know, perhaps known, but not really audited, nor would the middleman allow [00:08:00] auditing for something like that.
[00:08:02] And that Delta, I think everybody seems to think, is taken care of by competition. That is actually not the case. What ends up happening is. Those who are experts, who are very high caliber, who, by the way, have come out of pharma, and [00:08:20] while they’re at pharma, I’ll give you an example, in the biostatistician realm, I have a friend who was VP 30 years of a mid sized U.
[00:08:28] S. based pharmaceutical company, so I’m going to speak in dollars, and he regularly Would pull in biostat consultants for anywhere between [00:08:40] three and 350 an hour. So these were not, you can also get academics, academic statisticians for a much lower price point. But what is really required is the expertise and the industry.
[00:08:53] Knowledge as well. So that was a much higher price point when he became an independent consultant I. [00:09:00] e a business of one which I also call a micro vendor Because they’re not human resources. They’re vendors. They just happen to be the business of one employee. He was offered by these very same middlemen 180 an hour and he said I Six [00:09:20] months ago.
[00:09:20] I was using you to get people for my work my team And you were charging me 350, and now you’re offering me 180 for the very same
[00:09:31] Alexander: And for, for much less experienced people.
[00:09:35] Sheila: Yeah, yeah, exactly. So, what ends up happening is that the middleman [00:09:40] serves up people who are willing to work for $180 an hour. That was not a VP level biostatistician with 30 years experience.
[00:09:48] And maybe that’s okay. But more often than not, it’s not okay. But, the thing I want to point out here is that there’s a hidden cost in all. I’ve been [00:10:00] working on this for six years now, and I would say on the drug sponsor side, there is really no awareness of that hidden cost. Or how to quantify it. And there’s almost a belief that it doesn’t exist.
[00:10:13] And yet we leave pharma to come into the micro vendor ecosystem. I’ve seen this very same [00:10:20] dynamic. In biostat clinical operations, regulatory pharmacovigilance commercialization, where the middleman is getting at least a 50%, if not 100 percent markup and all they’re providing is the contract. And payment processing. That’s it. They’re not actually involved in the project other than [00:10:40] that.
[00:10:40] Alexander: Yep. Yeah. It’s, it’s happening a lot. Yeah. I know lots of people who are individual contractors. Yeah. And they get Basically through at least one layout to the sponsor. Sometimes it’s [00:11:00] even multiple layers.
[00:11:01] Yeah. So there’s a company. Yeah. Is that just kind of collecting these contractors and then Helps them to so that they are not yes, that’s that everything is kind of, at least looks legal. Yeah. Then, and they are not. [00:11:20] Yes, as these specific rules that kind of, you are not. Or should I say it put at risk because you work on yourself.
[00:11:31] Yeah. And when you then work only for one company that is kind of like being not really working as, as a [00:11:40] company. Yeah. Right. If you work 100% on one contract Yeah. That is often seen as being basically illegal. Yeah. And so then you need to be kind of employed under certain cons, constructions, and so on.
[00:11:57] But still these people are [00:12:00] contractors. Yeah. They don’t have. A development plan, so they don’t have supervisors, so they don’t have you know, additional benefits and whatsoever. Yeah.
[00:12:11] Sheila: And they don’t receive training to do their work and nor do they need it. They can hit the ground running on day one.
[00:12:18] Alexander: Yeah. Yeah. [00:12:20] And so the only trainings that they have is kind of, have you read that SOP? Yes. No. Yeah. These kinds of things. Yeah. But You don’t get money to fly to a conference or any, any of these things. Yeah. And as you said, many of these highly skilled people are actually paying themselves to go to conference to present [00:12:40] there.
[00:12:40] Yeah. These are in many cases, you know, very, very experienced people. I, of course, I also noticed people said kind of more junior, but many of them have decades of experience. Yeah. And They just don’t want to work in this kind [00:13:00] of corporate environment anymore with, you know, lots of, lots of meetings and lots of kind of strange processes and supervisors that don’t support them, but kind of more are hurting them.
[00:13:16] And there’s these annual review processes that are very [00:13:20] often poorly implemented, all these kinds of different things. Well, there’s many reasons why you want to become independent consultant, but then you get into this outsourcing mess. Yeah. Where you want to work with mid and big sized pharma companies, you know, or [00:13:40] even some of the small ones and say, say, no, we can only work with our preferred vendors because that’s how procurement says.
[00:13:49] We should work and now you have mentioned that there’s a also from an economic point of view that [00:14:00] can lead to a lot of costs that are completely and transparent and people don’t really know what’s happening. And from my perspective, I’m pretty sure you are pretty accurate with this 50%.
[00:14:19] Sheila: [00:14:20] I have a lot of data, a lot of data to back that up across every domain. It’s unbelievable. And I hear a new story every day. I just heard a story. It’s a in this case, it’s a small pharma who has a head of clinops. This is the cmo the chief medical officer hired [00:14:40] a or brought in I shouldn’t say hired brought in a head of clinical operations and so Because of where they’re at as a company.
[00:14:47] They’re a it’s pre market a single asset And the entirety of the approval process is considered to be temporary, meaning that it may take three or [00:15:00] four years, but then they’re most likely going to sell and they’re actively looking for partnerships. So to spend the majority of their budget on headcount, permanent headcount is really not a good idea.
[00:15:13] And so they do recognize that, but where did they go to get somebody? They went to a CRO. [00:15:20] And so the CRO is not involved. It’s a, it’s a large, it’s not the largest, but it’s one of the larger CROs might be based in the UK. They are not involved other than the contract and the payment processing.
[00:15:31] In fact, this, this particular CRO doesn’t have any other people at this, working at this company. So this person is completely [00:15:40] alone. So the CMO told me that he pays over 300 an hour for this person. Guess how much the person actually makes, the head of clinical operations?
[00:15:52] Alexander: I hope he makes more than 200.
[00:15:54] Sheila: Oh, try $150 an hour. [00:16:00] Happens all, I mean, I’ve heard so many, but here’s what’s really fascinating. No one at the pharmaceutical company seems to understand that. And, and, and as a matter of fact, if anybody is listening, who’s got this far, I’d be really surprised because the minute you start, like, I think that this is considered nickel and diming and they just don’t care.
[00:16:18] Legal doesn’t want [00:16:20] to deal with any contract that’s not over 10 million. In fact, neither does procurement. Anything less than that is considered a waste of time. And, and then you have HR who’s constantly trying to push. Their solutions, which are staffing firms and none of these people want to work [00:16:40] as as a human resource.
[00:16:42] We all have multiple clients. We’re all managing to, you know, to your point, we’re all managing our own businesses. And nor does the drug sponsor actually need us usually 40 hours a week for an extended period of time. It’s usually 10 hours here, maybe 30 hours 1 month. You know, it can vary and fluctuate, which, which is great [00:17:00] flexibility, but it, it never ceases to amaze me that, and I’ve been trying to get this message out there, and nobody wants to hear it.
[00:17:09] It’s really strange. I just see so much money being hemorrhaged, so much, so many research dollars being hemorrhaged on these inefficient intermediaries. [00:17:20] You know, if contracting and payment processing really was that valuable, fine, let’s pay 100 percent markup for it. But it’s not. What they want are experts.
[00:17:30] They want clinical trial operations experts. That’s where the value is coming from. But that’s not where the majority of money is being received.
[00:17:39] Alexander: Well, you [00:17:40] can also look at the other side. Yeah. So as the as an expert. Yeah, you could get much more than the 150. Yeah, let’s say yeah, so let’s say the company wants to pay 300 euros.[00:18:00]
[00:18:00] Yeah, and let’s say the contracting part of that you give, let’s say, 20%. Yeah, then you would have 240 euros. for the individual person and 60 euros for the [00:18:20] contracting party. Still pretty good. Yeah. So 240 compared to 150. Come on, that’s incredible increase in terms of how much money you make. Yeah.
[00:18:35] And you could get that as an individual contributor. Yeah. [00:18:40] So you could easily. add 50, 60 or more percent to your bottom line without actually working more, yeah, as an individual contributor, as a, as a small company, as a micro vendor. Yeah. And I think that is, that’s [00:19:00] unbelievable. Yeah. If the pharma company still wants to pay so much.
[00:19:04] Okay. Yeah. But of course, in the, in most scenarios, you would probably meet somewhere in the middle. Yeah. Nevertheless, there’s a big uptake for the micro vendors for sure.
[00:19:19] Sheila: And [00:19:20] that’s why most micro vendors don’t want to work through consulting firms, CROs and staffing firms, because all of those middlemen are trying to take out A giant markup and so what do they do?
[00:19:32] They go to opportunities that they can onboard quickly, which by the way, although I just gave a small pharma example It’s usually small pharma [00:19:40] So an argument can be made and in fact it can be proven if I had If I if I had six months to do nothing but study this, in a Peer reviewed fashion peer reviewable fashion.
[00:19:53] I could actually prove it but You Small pharma is getting way better talent as a result, [00:20:00] and large pharma is not getting the talent. And in fact, I’ll give you one proof point on that. So I have a friend and colleague who is a drug safety physician. Who recently left a large U. S. based pharma.
[00:20:14] I’m going to say I’ll give you five options. I’m not going to break any sort of [00:20:20] confidentiality, but it was either BMS, J& J, AbbVie, Takeda. Oh, wait a minute, Takeda is Japanese or Lilly. It’s one of those five. And So she is an independent consultant now, and she’s incorporated as a business. And she told me that when she was head of [00:20:40] safety for her therapeutic area, which I believe was immunology she was unable, she had great people that she knew through in fact, she was still a practicing physician.
[00:20:50] She worked one day a week as a practicing physician. So she’s very well connected, extremely expert, and knew exactly what she needed [00:21:00] on the projects, this highly specialized expertise. And again and again, she couldn’t utilize who she wanted to, because the internal administration wouldn’t let her. So she had to always use subpar talent.
[00:21:16] And here you have the organization. What’s really interesting, if you ever go to an [00:21:20] HR conference, it’s fascinating, because They do seem very concerned with getting the best talent, and yet, in reality, you see all of this kind of thing, and also, yeah, it’s, it’s just,
[00:21:34] Alexander: yeah, everybody speaks about the war for talent. Yeah. And, you [00:21:40] know we are. short on expert workers and all these kind of different things. Everybody, we have these great open positions and we can’t fill them with, with right people. Yeah. And then these kinds of things happen. Yeah. I find it unbelievable. Now we talk [00:22:00] quite a lot about all these kinds of different challenges.
[00:22:03] Now what’s your solution there?
[00:22:06] Sheila: Okay, I’m glad you asked. Thank you. So Lifestyle Hub, as I mentioned in the beginning, is quality, quality by design. So having come out of full time employment and realized all of these same things, and you’ve now seen it as well, [00:22:20] and countless other 20 plus year industry veterans are learning the same thing and have learned I’ve given a lot of thought to what is a better model?
[00:22:30] How could this be done? More efficiently. How can we write sized? Well, first of all, a middleman is necessary. Contract [00:22:40] consolidation is required because no drug sponsor wants to put 100 contracts in place. All of them being anywhere from 14 to 20 pages each with 100 different experts. And that is not an uncommon number, even for a small pharma.
[00:22:58] Of experts at the large [00:23:00] farm. It could be way higher. That’s very inefficient. The legal language itself is also redundant. So you have confidentiality. You’ve got ownership of work product. You’ve got, you know, termination, all of these terms are not radically different from contract to contract. Like it’s a place that is ripe for innovation or, or [00:23:20] consolidation.
[00:23:20] So what life’s I have does is it has, it’s a shell contract. Which is a legal and insurance structure, which also indemnifies the hiring entity against worker misclassification risk. So, so we take all of those legal risks and we roll it into one master services agreement, or we [00:23:40] utilize the drug sponsors master services agreement, unless I have intentionally subcontracts to whatever expert that entity wants to use.
[00:23:51] Now, the only way we can achieve that is if the micro vendors appreciate what this is and trust that [00:24:00] it’s, you know, a valid like the micro vendor doesn’t want to work under 100 percent markup circumstance. So life in addition to the first layer is the that overarching agreement. The second part is that Lifesite Hub is radically transparent, so all of our markups are known to both demand and [00:24:20] supply and reported throughout the life of the engagement, so everyone is always going to know what life, what the middleman is making as a result of this.
[00:24:29] Our markups are also Deliberately way lower than traditional subcontracting which if you go to any business school all over the world They’ll tell any business if you are going [00:24:40] to subcontract you have to do a 30 markup as a starting point That’s actually taught and that is to cover the cost of overhead risk to your brand all sorts of things You know that they’ll tell you in business school.
[00:24:54] So what we said was well You We don’t really need any of that because this is such a highly [00:25:00] specialized space. So we’re going to set our markups at 20 percent and, and go from there. So the markup is radically transparent. It’s fixed at 20%. In fact, if the engagement lasts more than a year, the markup goes down to 15 percent and no middleman ever does that.
[00:25:18] And [00:25:20] and then we also have the monetized network aspect of it. We incentivize small businesses to take part in this.
[00:25:27] Alexander: Okay, let’s first go with this with this step. So if to make sure that we make sure have all the numbers correct. Mm-Hmm, . So if I, for example, [00:25:40] would have just make it easy or the rate of $100, you would put $20 on top of that and the sponsor was pay $120.
[00:25:52] Yeah. Correct. Okay. That’s pretty cool. Yeah. Okay now. [00:26:00] These 20 as a and that is kind of the interesting thing with the monetarized network. You actually use these $20 not just for yourself. So what do you do with that?
[00:26:15] Sheila: That’s a great question. So the other [00:26:20] innovation for LifeSciHub is the supply side economics.
[00:26:25] So One of the things, one of the things about traditional business is that the buyer is the one that dictates everything. The buyer is the one that is the most important thing. What we’re finding in today’s day and age is that supply side matters as well. [00:26:40] And so we have these platform companies like Airbnb and you know, well, Uber is probably a bad example, but let’s say Airbnb, for example.
[00:26:49] And that means that there’s more participation on the platforms, on the supply side, there’s you know, the system has to be designed to appeal to the [00:27:00] supply who is actually going to Participate in whatever that platform is. So that’s where life’s I have recognized with all these other traditional minimum that nobody cares About the supply side.
[00:27:11] They’re just looking for the lowest lowest number. Somebody will Will accept And it almost assumes that workers have no [00:27:20] agency, workers have no choice and no agency. And so what we’ve done is created this incentive, which rewards participants, supply side participants,
[00:27:33] And so one of our barriers to entry is the achievement of a master services agreement, [00:27:40] and we’ve had a really hard time approaching procurement and legal and, you know, the organization itself and trying to sell them on this idea of a new business. So what we did was turn to the supply side, who already have these relationships in place.
[00:27:56] So the majority of the micro vendors, and there’s [00:28:00] 500 and more at this point in the community, they already have contracts in place with, say, J& J or Pfizer or GlaxoSmithKline. We don’t, and we don’t have the relationships there, but you do. So if you are instrumental in introducing us and helping Lifesite Hub achieve a master services agreement, [00:28:20] and Lifesite Hub ends up getting project work as a result of that, And we get that 20 percent markup, you are the demand connector.
[00:28:30] We would never have had that relationship without you. So, 5 percent of that gross income is going to go to you, as the [00:28:40] demand connector, permanently. And Lifesite Hub retains 15%. So I have more I can say there, but are you with me so far?
[00:28:49] Alexander: Okay. So that means, so I have a contract with one of these, any of these pharma companies.
[00:28:58] Yeah. And I [00:29:00] bring you in and then there’s another micro vendor that jumps under this umbrella for this client that I have. Yeah. And that has now a contract of, let’s say He gets 10, 000. Yeah. [00:29:20] And you add 2, 000 on that. And of these 2, 000, I get 500. Correct. Okay, cool. And I have not done anything then bring you in at the beginning.
[00:29:33] Sheila: Yeah, you did nothing other than an introduction. You didn’t have to do the contract. You don’t do any of the payment processing. [00:29:40] And as you know, the sponsor may or may not know you were involved. I mean, what the sponsor knows is that they got a really good expert. Right. And they didn’t have to put another contract in place.
[00:29:49] And it was immediate because once that MSA is in place. The only thing we need are statements of work, which don’t take four to six months to implement.
[00:29:59] Alexander: And so [00:30:00] it is for all the micro vendors, you know, the small companies it’s great additional income. Yeah, it’s passive income. Yeah. And I don’t know how others think about it, but I love passive income.
[00:30:17] Sheila: Well, you know what, we all should take a [00:30:20] cue from the 1 percent and they are very good at creating passive income streams and that’s exactly what this is. And I also wanted to say a couple of other things. We have a supply connector as well. So there are people in the network who know drug sponsors and can help us get contracts in place.
[00:30:36] There are also people in the network who know really good people. And so [00:30:40] it’s that reference ability. All other traditional suppliers have databases and they rely on AI to sort through the databases, which itself is reliant on the content and like CV is being detailed enough to have the right amount of data there.
[00:30:54] I mean, it’s, I guess it works. But I mean, what we have is we have someone has direct [00:31:00] experience with someone. They worked with that person on a project before. That’s the supply connection that we’re looking for. And if someone’s a supply connector, the same thing is true. There could be the demand connector who gets 5%.
[00:31:13] And then a supply connector who recommends somebody for that work. And then that supply connector gets 5%. [00:31:20] Because Lifesite Hub would never have known that expert without the supply connector. And so in that scenario, demand connector gets 5%, supply connector gets 5%, and Lifesite Hub gets 10%. And that still gives us room to, if the engagement goes beyond a year, To reduce it down 5%.
[00:31:39] So then it’s [00:31:40] 555 and we can’t go any lower than that going any lower than that would be doing it for free. We can’t do that yet. But that to me is what is actually in alignment with contracting and payment processing. You think about that 15 percent versus 100%. And that’s quality based design.
[00:31:59] Alexander: [00:32:00] Yeah, I love that. And what I love about it is the transparency. And I also love kind of your Airbnb kind of reference. Yeah. I’m not sure how transparent Airbnb is, but I love that kind of, you have a choice. [00:32:20] Yeah and you have a say in that and you can kind of work together. It’s a, it’s this community aspect as well.
[00:32:27] All of these things make it really, really attractive. And so for anybody that is a small business or an [00:32:40] individual contract contributor who is looking for, you know, something that is much more transparent and still also very easy. Yeah, that is one of the other things. Yeah. So I’m a statistician.
[00:32:55] I’m not a lawyer. I’m not a kind of legal expert. I’m not an [00:33:00] MSA expert. Yeah. When I see sometimes contracts being sent, yeah, it’s Come on. Yeah. This is, I don’t have a, you know, I don’t want to pay lawyers to refuse these kind of materials all the time. So it is far [00:33:20] easier to have the statement of works and yeah, rely on that network.
[00:33:26] Sheila: Yeah. To that point, I personally have managed over $250 million delivered to drug sponsors. Over that 20 plus years [00:33:40] at globally and anywhere from 10, 000 to 5 million. And that’s only the work that actually closed. I’ve actually negotiated and, and, and developed other business that didn’t actually materialize.
[00:33:54] But, so I’ve seen hundreds of agreements and [00:34:00] maybe thousands of SOWs. And. Within drug development, they are, I would say, 90 to 95 percent essentially the same. The language is a little bit different, but they’re essentially the same. And the SOWs as well have very similar caveats, very similar ways of working.[00:34:20]
[00:34:20] And one of the problems with utilizing, you know, your local lawyer or something like that is it’s very unlikely that person Yeah, they’re a lawyer, but do they specialize in drug development operations? No, maybe handling the lawyer, the legal work for the dry cleaner down the street or for the gas station.
[00:34:39] And [00:34:40] that’s great, but I have actually found more than one instance where the lawyers that I know others are using are either missing risks or because they’re not familiar with the space, they have an outsized sense of risk.
[00:34:59] Alexander: Yeah. [00:35:00]
[00:35:00] Sheila: Which impacts the small business ability to do business if, if you’re a lawyer. But is the lawyer ever going to admit that? No. And so in either of those scenarios, what ends up happening is billable hours and lawyers bill at very, very high. And you know, I question why, you know, if, if the agreement is well [00:35:20] written, when you really need a lawyer is when there’s a potential matter. And then you need a lawyer.
[00:35:28] That, if you’re going to litigate or actually bring something into some sort of conflict. But before that, you know, save your legal dollars for actual legal [00:35:40] defense or, or, or offense, if you will.
[00:35:44] Alexander: Yeah, yeah, yeah, completely agree. So in summary, yeah, we have seen that there is a lot of intrans In the overall outsourcing process there’s a, there are a lot of [00:36:00] opportunities for sponsors to get better talent at better prices.
[00:36:07] Much more flexible. Faster. Faster. Yeah. And I think, you know, higher quality at better time and better price. Well, I think this is pretty [00:36:20] irresistible combination. So, and for the you know, the, the supply side, you know, the micro vendors, this is really, really cool. Circumstances really cool set up to work on them.
[00:36:35] And so if you are interested in this, just check out the [00:36:40] show notes, we’ll have a link to Sheila’s homepage and just tell that you listened to this episode and that you would be love to speak to Sheila and then yeah. Let’s connect. Any final sentence from you, Sheila?
[00:36:57] Sheila: Just thank you, Alexander, for bringing me [00:37:00] on.
[00:37:00] You yourself are an outstanding example of the micro vendor excellence. That is available in in this, in this community. And I think you’re incredible. I think what you’ve done here is incredible. You’ve taken your work within drug development, harnessed it, [00:37:20] and made it all available in various ways to, not just one drug sponsor that you work for, but all drug sponsors.
[00:37:27] And you’re on the cutting edge. of data science, which is the hottest area in drug development today. Would you want, I’ll ask you something. Would you want to work through a consulting firm or a staffing firm? [00:37:40]
[00:37:40] Alexander: No, no,
[00:37:41] Sheila: no. If they don’t
[00:37:43] Alexander: want to lose that again.
[00:37:45] Sheila: Yeah. Yeah. So, so what you’ll do, and if I could put words in your mouth, either you’re going to contract direct or you’re going to contract through life site hub, if it makes sense to do that.
[00:37:55] And then you’re going to benefit from passive revenue streams that life site hub provides you. [00:38:00] And then that lucky drug sponsor is going to get access, not just to you, but to hundreds of other experts like you, not just in data science, but all across the operational spectrum. So this is the value, I think, and, and I do believe it’s irresistible as well.
[00:38:15] I think what we need help is helping drug [00:38:20] sponsors recognize the difference. That there are other ways to work now and just because it’s different doesn’t mean it’s bad. And in fact, to hopefully see the value of considering something like this, because I have to be honest, procurement has been a real challenge.
[00:38:36] Procurement, legal and HR have, have been, [00:38:40] I would say fairly inoculated against this for some reason. And we really need to help them understand that this is actually a great opportunity. [00:38:51] Alexander: Yeah. And for full transparency, I work very closely with Sheila on all kinds of different things. So and otherwise probably I wouldn’t [00:39:00] have brought you onto the show, so thanks a lot for the nice words and for you as a listener, have a great time and see you soon.
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