March 15, 2010 (Vol. 30, No. 6)
Knowing When to Rely on In-House Capabilities and When to Outsource Is Critical to Success
The pressure to develop new drugs that are best in class within strict budgets has led most pharma and biotech companies to focus on core research and pipeline development, while outsourcing clinical research. Since 2001, spending by drug sponsors on CROs has grown 15% annually, outpacing the 11% rate for overall spending on drug development, according to a Tufts Center for Study of Drug Development report.
In addition, the size of the CRO market is growing—$17.8 billion reported in 2008, according to CenterWatch Monthly. In response, CROs are expanding their services—evolving toward a full-service model—by offering safety studies, operating on an international scale, and utilizing electronic data reporting and management. A recent outsourcing conference organized by Arena International Events Group provided information on how companies can best utilize CROs.
“Anyone who does outsourcing understands that you want to keep what you’re good at and what’s important in house and consider outsourcing everything else,” said Timothy McNamara, Pharm.D., vp, clinical research and medical affairs at ISTA Pharmaceuticals.
The company’s decision-making plan focuses on balancing costs and quality and consists of three key elements: clinical development (studies required, timeline completion), capabilities assessment (resource assessment, clinical expertise), and financial and human resource (buy or build) considerations. Dr. McNamara reported that his company always outsources data management and biostatistics since these are two departments it lacks in house. Also, based on the size of the study, ISTA often needs CRAs (clinical research associates).
Some of the main challenges for sponsors include high expectations, competition for sites and subjects, data and regulatory requirements, unexpected costs, personnel turnover mid-project, and development time.
“We had been working with an outsourcing biostatistician who left his company in the middle of the study, and we were assigned a much more junior biostatistician. This person didn’t have the expertise the original person did, and we were concerned. We had to get an agreement from the CRO that the junior biostatistician would be overseen by the vice president to ensure the integrity of the data,” explained Dr. McNamara, who advised that companies plan for this sort of thing up front and have it part of the contract.
Additional contract considerations include milestones, agreement about pass-through costs, the scope of work and format, staff turnover, and final payment. Data management and format are important because the FDA will review the NDA file. “The FDA is starting to require data in new formats, and it has to be filed electronically.”
According to Dr. McNamara, it is important for new companies not to sacrifice quality for dollars. “The biggest point is due diligence—you have to get to know the company you are outsourcing to. It’s almost like dating.” He added that it’s also important that the company provides attention when needed.
“These are very expensive endeavors; they make or break the company.” There is no one-formula-fits-all approach though. Many larger companies use functional outsourcing programs where they have a select number of vendors under master-service agreements, whereas smaller companies tend to bid their business out as needed.
Making the Right Decision
Although there is no standard formula for outsourcing, there are certain steps companies can follow to help choose the right CRO for a specific study. Nancy Havrilla, senior director of clinical operations at Achaogen, said that key considerations vary depending on the study, the indication, and needs. These include the life cycle of the study (timing, study management strategy), RFP, protocol synthesis, vendor contract, study maintenance, site closing, and database lock.
Havrilla stressed the importance of a good contract. She suggested starting with an accurate RFP to provide a more accurate cost assessment. “I always include a statement that assumes all documents go through a two-review cycle unless otherwise noted. This is to avoid each company working under different assumptions.”
It’s also important to include timing of activities into the contract. The vendor-selection process should not be rushed. It should be determined what will be outsourced and selection criteria should be listed. As a sponsor, it’s important to know what can be managed within a specific budget. Scheduling periodic project review meetings helps to keep everything on track. “There’s a lot of pressure to do things faster without spending additional money. Managing expectations and planning helps to minimize the amount of pressure,” added Havrilla.
It’s best not to end a relationship with a CRO prematurely; there are short- and long-term expenses associated with changing vendors. Havrilla suggested that the best way to prevent this is to act quickly as soon as any issues arise. Also, examining learned lessons and areas that need improvement helps the relationship. “I think finding the right CRO is not hit-or-miss. There are steps to take to find the right group for a particular project. Having selection criteria and looking long term to build relationships is a great way to save money and time.”
Offshoring Clinical Trials
There are several strategies one can use when considering offshoring clinical trials to emerging countries. “There are challenges with each country and region,” stated Jacquie Mardell, former senior director of clinical operations at Metabolex and current director/partner at Anhvita Biopharma Consulting.
Some of the steps in choosing the right country for a clinical trial involve matching patient population and medical practice norms. For example, type 2 diabetes tends to be diagnosed early in U.S., but late in India, where there are also more complications. Ethical concerns may arise if a country requires continuation of care after study completion, which leads to budget issues. Informed consent is usually considered an individual decision in the U.S., but there are countries where is it more of a family decision.
Regulatory and ethical approval pathways are also critical. It’s important to know the study protocol will be approved by health authorities and ethical review committees in time to enroll patients before the deadline and within budget. Another consideration is broadband connection—in emerging countries studies are often restricted to bigger cities.
Some of the advantages of conducting clinical studies in these countries include drug-naive patients who are motivated to participate because of access to therapies, and investigators who want access to cutting-edge therapies and substantial costs savings. “A patient in an emerging country can cost a fraction of a patient in a Western country. Those are economic factors that can’t be overlooked by board directors and management teams trying to marshall their dollars.”
Choosing a CRO is getting easier, Mardell said, because the world market is shifting to a providers’ market. “A sponsor is eager to choose a partner because they don’t know how to do things in a foreign country and don’t have time to do all the research.” However, she noted the importance of investing time to create relationships with vendors in order to evaluate their expertise. “I think sponsors can make this choice because vendors are on their doorstep, but it takes more work to choose the right one.”
Redefining Outsourcing Strategy
Since there are no written guidelines outlining the best way to choose a CRO, companies have to develop their own strategies. “You have to define your organization in terms of what skills you want to retain and consider essential, and that only your organization can carry out,” suggested John Fry, senior director of clinical operations at Facet Biotech.
A few years ago, after making these assessments, Facet decided to outsource most of its operations. However, after reviewing this strategy, Fry said that the company decided to focus on early development—more functions are kept in house now and larger studies are outsourced.
“CROs are only as good as the team they give you,” Fry added. When going through the selection process, companies need to ascertain who the key team members are and get assurances that they are committed to the program. If there are any personnel changes, companies need to be consulted beforehand.
Fry has a specific set of criteria for choosing a CRO. “We go through a process where we start with about ten companies, reduce that down, and send an RFP out to about three. We then go through a rigorous selection process that can take several months.”
Comparator sourcing involves comparing products. This can be to prove that a drug is more effective or works faster. “Most of the time, this is done for best in class, and is usually done during Phase II or III studies,” explained Lekishia White, vp at MultiPharma. “Comparative trials are prevalent, especially with increasing pressure to get the best drug on the market.”
There are risks involved with these studies. Most companies don’t want another company knowing that they are comparing their drug to another. However, said White, is it usually public domain since clinical trial information has to be revealed to the FDA. If the drug isn’t better, the company is still obligated to report the results.
“This is why drug development is so expensive. There is such a small percentage that makes it through the entire cycle. You could get through trials with a working therapy, but it may not be best in class so the company decides not to develop it.”
Some of the challenges involved in comparator outsourcing include obtaining all the appropriate paperwork and the import/export of materials. Companies have to obtain a certificate of analysis and/or an equivalency statement as well as approval to use materials. “There may be a drug registered and available in Europe, but not in the U.S. That would require an equivalency statement that ensures it’s the same formulation.”
Comparator-sourcing providers are specialized in terms of areas they service the most. “Some of us have better relationships with the innovator companies than others. It’s about relationship building.” White said the best way for a company in the industry to know which comparator-sourcing provider to use is to attend industry meetings and ask colleagues.
“The clinical trial circle of influence is quite small—word gets around quickly who is reliable and who is best.” This is a growing field, she added, with the number of providers doubling in the past two to three years. “There are at least ten comparative-sourcing providers—for such a small niche market, that’s a lot.”
There’s little doubt that CROs will continue to play a key role in the future of drug development. Most pharma and biotech companies will continue to maximize their R&D efforts. Knowing when to rely upon in-house capabilities and when to use a CRO remains crucial to whether a drug makes it to market. According to the Association of Clinical Research Organizations, biopharma outsources at least 30% of all clinical research. This figure will likely increase with demands.