For a business relatively stable in terms of general expectations and outcomes, a snapshot of Clinical Trial Service providers yields a variety of infrastructures and basic approaches to serving clients. If individual business were given physical form on the page, they would recall gerrymandered congressional districts more than building blocks of an industry. Their shapes are determined by where they key on different points and where they pursue different emphases. There are large companies with the capability to provide their own CTS and companies that work completely on an outsourcing basis. There are companies that have moved into testing services from packaging and labeling, and companies that have moved in the opposite direction. There are companies with specialties designed to attract a certain kind of business, and companies that pride themselves on their ability to handle anything a client brings to them. While some CTS providers advocate for early involvement in the trials process, other specialize in the later phases.
Not only does the practice of clinical trial services vary greatly, the goals of such business often can be said to stand in conflict with one another. While there are companies that treat clinical trials either as a whole or in part their reason for doing business, there exist other businesses that treat it as a feeder concern. A common set-up for CTS is for a company to offer its clinical trial services as an inducement for keeping the client for the commercial manufacturing side of the business. As Bob Calabro, vice president of sales and marketing at OSG Norwich succinctly put it, "Our long-term business is commercial product manufacturing, so when we bring a client on board, we do so with the very clear understanding that our long-term goal is commercial product manufacturing. Clinicals support the path to get to commercial." When the CTS umbrella allows businesses that define themselves in opposition to one another as businesses, can there be common ground and shared interests?
As it turns out, yes, there definitely can. What binds CTS providers is that they participate at some point in the same process of getting drugs to market, and vast, overlapping areas of the sum of businesses involved in CTS react to external pressures put on that process in at least some stretch of what they do. Driven by specialties and the historical development of what they can provide, CTS providers may only see an arm, a leg, or a trunk, but they definitely sense the elephant when a mouse crosses its path. Following are some of the trends and recent developments areas in which companies share an abiding interest.
- The Rise of Virtual Companies
- European Regulatory Pressures
- U.S. Regulatory Pressures
- Technology: Dosage Forms and Labeling
Practically everyone we spoke to agreed that more and more outsourcing work comes from virtual and specialty companies. A general surge in such business was expected several years ago when a wave of capitalization was made available to biotech companies in the first years of the decade. Some of these new smaller companies benefited from discovering a niche, marketing drugs that may not have been profitable to a larger pharmaceutical concern; others simply followed a market trend for few drugs brought to market more quickly. The end result was a surge of companies ready to do business at a rate that wiped out losses from those few businesses of this type that came to an end: a healthy crop of toddlers that made almost everyone forget a few sick babies. Every provider we contacted described virtual companies as either a major or their primary source of business.
Moreover, the way virtual companies are structured, without the dozens of specialists or the long-term track record of the big companies, makes them a perfect needs-based match for CTS providers looking to become outsourcing business. "They're looking for bench strength and knowledge," said Jeff Hallquist, sales director of Fisher Clinical Services. "They want us to be able to help them understand what the need to do to get clinical supplies to the patients. They're looking for us to supply a broader array of services. Where Big Pharma may tactically or transactionally pursue what they can't do at the moment, a virtual company will outsource everything they can't do. I think all of those who provide services in the clinical supply market have seen more virtual companies requiring a higher level of support."
Added Mr. Calabro: "I think the uniqueness in working with the virtual companies is that it's not unusual for them to rely on us for more expertise and guidance." The business from new companies is important as many describe that very few existing companies seek new work based on dissatisfaction, as opposed to looking towards new areas in which to develop product.
The rise of virtual and specialty companies has also been beneficial for companies with a service that appeals to the products they are likely to develop. "Where we really specialize is the management of cold temperature," said Anita Dopkosky, vice president, sales and marketing, at McKesson Bioservices. "That's our true expertise. To that end, we see the trend with our customer base is in the Biopharma companies that have cold temperature materials and the Phase II/Phase III trials. We also offer package validation services for qualifying shippers. That really plays in nicely to managing cold temperature material, in that we qualify that shipper as well as do the secondary labeling, the kit assembly and the cold temperature distribution out to the clinical site." In general, most sources spoke of relationships where the virtual companies were dependent on the companies they hire to help them understand the process they had just outsourced, not just provide the service.
Another area of wide agreement is that recent increased regulation of clinical trials in Europe will have a major impact on how companies conduct themselves for decades. Rumored as early as 1999, the European Union Directive 2001/20/EC was passed on April 4, 2001 and fully implemented on May 1, 2004, with legislation as a response still being passed on a country-by-country basis. The directive essentially called for a higher level of ensured standard practices in distribution for clinical trials to be held in Europe. "What they did through this directive," said Bob Misher, chief operating officer of Almedica, "was equalize the responsibilities of releasing both commercial and clinical drugs in the European Union, so that all the requirements they had with commercial drug release they also now brought over to the clinical area."
As Donald Nolde, director of sales at McKesson BioServices, put it, "They've required additional layers of qualification for material to get into the country and distributed to end users. What's involved now is you have to go through a QP, which is a Qualified Person in Europe, to receive your material, inspect your material and release it for clinical supply distribution."
Warned Mr. Misher: "That QP, because of the way the directive is written, is now responsible for not just what the packaging and labeling company has done. That has put Almedica and others like us in a precarious position because that QP has personal responsibility for a drug product that was manufactured by another company." According to Misher, this has put most companies in the position of having to audit manufacturing processes, and has meant studies have left Europe for places like South America, and there was a scramble to beat the May 1 deadline.
As the search for different populations to test should continue, the burden will fall on Clinical Trial Services companies to keep pace with unique import/export laws, health regulations, and tax rules.
In response, companies have focused on the logistics of working with the new QP and ensuring those higher standards could be proved, or at least accounted for in the process. Companies with a presence in Europe, via a partnership or a subsidiary, benefit by having people in place to conduct any required business necessary to show the standards have been met. Some feel this will involve inspection and audits by the QP; others feel the directives are open to interpretation. Said Mr. Hallquist, "The QP is required to sign off that the material that is being released for clinical trial in Europe has been manufactured and packaged according to GMP. And if they can do that by reviewing the production, master batch documentation and packaging batch documentation, the ID testing, any other testing that's been required, if they can do that by reviewing a technical questionnaire that's been completed, and having a quality agreement in place that validates the fact that the sponsor has followed GMP, they may not feel compelled to go inspect. It's their choice."
Mr. Misher added, "What we're stressing now is that companies need to develop a strategy with how they're going to deal with conducting trials in the European Union, so they can build that into any program they're going to run." For instance, a single lab might be sought to perform five release tests instead of five labs, to reduce the number of future QP audits.
What has become clear is that the European Union's directive is a sign of a fragmented international market for clinical trials that shows no signs of backing away from new and largely unfamiliar places in which to test. This may include some eastern European countries that are not signatories of the EU, China, and South America, each with its own distribution concerns and potential idiosyncratic legislation in terms of requirements and proof of same. As the search for different populations to test should continue, the burden will fall on Clinical Trial Services companies to keep pace with unique import/export laws, health regulations, and tax rules.
As opposed to sweeping changes in Europe that race alongside the desire to open new markets, U.S. regulatory pressures have been relatively stable. Although in a few areas there may be less oversight, some businesses claim generally higher standards in Clinical as opposed to Commercial manufacture and a few suggest that it would be counterproductive and make poor administrative sense to not run their business to the highest standard available on either side. "Our interpretations of the guidelines here are always evolving," said McKesson's Mr. Nolde of a phenomenon that another executive termed 'a moving bar always going higher.' Some of that constant evolution is market-driven, Mr. Nolde believes. He remarked, "We take instruction from the audits that we receive here, both from clients as well as the agency, we're always evolving what we do, implementing new procedures and practices to stay current with what the expectations are out in the market."
If regulatory pressures provide the backbeat of change in areas of manufacture, labeling and distribution, then technological innovations provide a counter-beat those dancing to the music can be a bit more selective about when they pick it up.
In terms of specific areas that may see increased scrutiny, most providers look to their specialties. Ms. Dopkosky at McKesson said her company believes that more scrutiny is due for downstream temperature control on both sides of the business. Mr. Hallquist, meanwhile, sees a potential change in how Phase IV studies are targeted, commenting, "I think people today are expecting Phase IV trials to require more science, more data and more control. Less of a marketing study and more of a post-approval review. I think what will change is that you've got fewer drugs in the pipeline, more that are coming off patent faster, and now you have this pressure to review what's already out there again, because of safety concerns."
The sanguine manner in which many CTS providers look to the future has at its core a largely successful climate of innovation and improvement, a series of market challenges and then responses to meet them, with leeway coming from in terms of grandfathered legislation and the slow spread of new technologies. CTS providers respond when they have to; the market sees to that. New delivery systems—inhaled products and injectables, for example—eventually result in packaging solutions either in-house or through yet another outsourcing company. Ms. Dopkosky commented, "Here at McKesson we will do the blister packaging and then contract out to buy the child resistant cards." Problem solved, and although there may be costs in terms of oversight. She added, "And as a package we need to ensure that any vendor we're using has gone through all the testing to show that it is child resistant and senior friendly." Nothing about such a solution suggests much in the way of lost time.
Perhaps the biggest variety of opinions about a necessary technology can be found in discussions of RFID labeling, or Radio Frequency Identification. The potential for improvement in speed and accuracy over bar code signifiers is considerable, because it doesn't require line of sight confirmation or heavy scanning. "We've run several pilots; it's run extremely successfully," Chuck Gettis, vice president, corporate development at Clintrak Clinical Labeling Services, told us of Clintrak's RFID initiative. "We are in the midst of creating our plan for implementation throughout our facility from an incoming materials and processing material perspective, and then utilizing it for distribution of supplies." Although as with any CTS-related technology there are passionate adherents like Clintrak, others are slower to move further along the path to fully embrace the technology. The reason seems to be a professed uncertainty over its full, direct application to specific CTS, a mistrust of its total saturation with the military and at Wal-mart through which CTS providers are said to adopt the technology in backdoor fashion, and a desire to best negotiate the massive tinkering of infrastructure at several levels that comes with adopting a new way of business. If regulatory pressures provide the backbeat of change in areas of manufacture, labeling and distribution, then technological innovations provide a counter-beat those dancing to the music can be a bit more selective about when they pick it up. Even Clintrak, with RFID beaming from the front page of its web site, was quick to note how much its product improved not through a cutting-edge technology but by bringing a printing press on site.
Like many business categories, clinical trial services offers the treacherous road of an increasingly complex international market but cautions the driving forces behind these companies to keep an eye on the dashboard for which lights go on and when. There may come a point at which increased scrutiny and the breadth of services required of such companies may wear them so thin that they must call specific decisions into question. For now, the lack of anything close to a single vital strategy or one condition to avoid indicates different roads to success and none to ruin.
Tom Spurgeon is a contributing editor at Contract Pharma.
He can be reached at firstname.lastname@example.org