Today’s R&D strategies increasingly focus on value and efficiency in an effort to trim exorbitant drug development costs and time to market for progressively complex products and protocols. Getting a drug to market, previously priced at $1.3 billion, is now estimated to cost upwards of $5 billion¹, according to recent analysis conducted by Forbes. Moreover, pharma/biopharma companies are saddled with a discouraging 95% failure rate, attributing the main expense to failure.

Sponsors and CROs alike are embracing efforts to improve the operational efficiency of clinical trials, to get new products to market faster, with maximized data, and at reduced costs—all the while keeping in mind the success of any new drug in today’s market relies on multiple stakeholders.

Drug companies and their development partners are employing new models and methods aimed at improving clinical success rates, with a focus on analytics, adaptive and more complex trials earlier in development, as well as post registration outcomes/evidence based studies aimed at gathering critical data and maximizing a drug’s marketing prospects. Also, new partnership models focus on developing best practices, allowing companies to maximize R&D spend in their pursuit of success. 

“Pharmaceutical and biotech companies—large and small, established and early stage—are forging strategic alliances, collaborative partnerships, and multi-company consortia,” said Tufts CSDD Director Kenneth Kaitin. “Early results indicate that sharing knowledge and leveraging resources is helping sponsors find new drugs to treat many of today’s most challenging and complex indications.”

According to Gautam Ranade, senior director of Strategic Sourcing, Pharmaceutical Sciences, Pfizer Worldwide R&D, “There has been a consolidation of disease areas/therapeutic areas pursued by individual pharmaceutical companies, largely driven by increasing budget pressures and the desire to focus efforts on a more concentrated set of disease areas based on alignment of market potential, patient need and internal expertise. There is also reluctance by payers to pay for drugs with relatively small incremental therapeutic benefits, and they’re responding by imposing pricing constraints. In turn pharmaceutical companies are responding by placing an increased focus on cost minimization and also on increasing productivity by trying to shorten the development timelines.” He added that outsourcing suppliers need to be aware of these dominant trends and design improved service offerings for the pharmaceutical industry.

The industry is continuing to evolve with a new focus on analytics, the alignment of stakeholders, and e-clinical solutions to overcome today’s R&D obstacles.   

R&D Trends
Among the latest drug development trends is greater use of analytics and informatics to extract and interpret key information from mass data in order to make critical decisions. With the need to create efficiencies and improve costs, companies increasingly look to analytics to systematically review data and look for evidence as to the potential success or failure of a compound early in the drug development process. CROs must therefore provide increasingly tailored clinical delivery models and innovative solutions to support this trend.

Many biopharmaceutical companies are now moving into new areas of innovation, such as targeted therapies and rare diseases. According to Marty Birkhofer, MD, chief medical officer at inVentiv Health Clinical, “These shifts can be challenging for the CRO industry, as we continue to offer the services our clients need today while anticipating future needs and creating new services to support those needs. For example, new areas of innovation often require the ability to enroll an unfamiliar patient population and connect that population to experienced investigators.”

“The need for cost-effective solutions will remain a constant,” said Dr. Nuala Murphy, president of Clinical Research Services at ICON. “We look to innovative solutions underpinned by leading technology as one of the options to meet this demand. We believe that the opportunity to be predictive via real time data analytics is vast and is key to these solutions.”  These solutions often include a range of monitoring approaches to review alternative monitoring strategies as part of any protocol, and to do this as early as possible in the design phase.

“We normally try a dual approach by piloting a risk based monitoring model at the same time as applying a traditional model, and in doing so we can show how being more proactive in identifying issues can increase quality and efficiency. As a result, what we have seen is more and more customers are willing to implement this monitoring approach across a range of therapeutic areas,” Dr. Murphy added.

She noted that approximately 20% of ICON’s patients in active Phase II and Phase III trials are currently being monitored with this method, and that the economic benefits vary according to the chosen monitoring strategy, and ranges from 10 to 40% cost reduction in monitoring.

Another major R&D trend focuses on better alignment of drug developers, regulators, payers, and patients, driven mainly by value and greater efficacy goals. This path forward demands a more integrated approach to drug development, according to John Doyle, practice leader, managed markets, U.S. Quintiles Consulting. “This is setting the stage for a revolution that will engage systems-oriented strategies to drive patient outcomes and value-driven solutions.” This systems-thinking approach aims to drive innovation, value, and efficiencies into the development process by leveraging the knowledge and expertise of the entire healthcare continuum.

“To begin moving in this direction, data connectivity and a free flow information exchange are prerequisites for a learning system to operate. This new, integrated model is both a movement toward an ideal state and the ultimate destination and is defined by the challenges that biopharma executives are struggling to resolve, an expanded stakeholder group, and the promise of better health through high quality, accessible products and treatments,” added Doyle.

PAREXEL’s chairman and chief executive officer, Josef von Rickenbach, describes the global biopharma industry pipeline as “vastly changed” over the past 30 years.  “Today, products are advancing in more specific areas, even orphan diseases, faster than ever before. Regarding the alignment of industry players, I’m happy to see that regulators are starting to become more nimble and astute. They are playing their part and it is extremely encouraging, “ he said.

Biopharma’s success in the new healthcare economy is predicated on one simple principle: prove the value of your treatments or risk losing market share and profits. Doyle of Quintiles said, “Healthcare costs are climbing, regulators around the globe are requiring more information, and both providers and payers have higher expectations for a medical treatment’s proof of value before prescribing or paying for those treatments. These quality, cost and outcome driven imperatives to obtain market access must also incorporate effectiveness, safety and economic benefits as compared with competing products, and overall improved quality of life.”

e-Clinical Input
Leveraging e-clinical solutions is essential to advance the analytics-focused R&D strategy and reduce development time and costs. Areas such as monitoring and informatics play a big role in the clinical development process and predicting failure and success. While we see greater adoption and advances with technology, there still exists room for improvement across the development continuum.

Rick Morrison, chief executive officer of Comprehend, noted, “There have been improvements in the technology that streamlines the clinical development process such as the use of the cloud, software-as-a-service, electronic trial master files, electronic common technical document (eCTD), as well as industry standards such as CIDSC SDTM, to speed the submission of NDAs. Probably one of the most important advancements is the use of analytics and predictive analytics (i.e. CDRH’s guidance for the use of Bayesian Statistics in medical device clinical trials and the FDAs guidance for risk-based monitoring) both aimed at speeding the clinical development process.”

With respect to risk-based monitoring, costs can reach 25% to 30% of the cost of running a clinical trial, according to Morrison, which is a significant amount when you look at the total cost of getting a drug to market. “Even with these new technologies and advanced methods of running trials in place, there is still an enormous amount of room for improvement given it still takes 12-15 years to approve a drug in addition to the astronomical development costs. Data and technology advancements will be the key to reducing the time and cost to bring a drug to market,” added Morrison.

In terms of technology, informatics has a significant role to play along the entire continuum of drug discovery, development and launch. For example, the European Medicines Agency (EMA) has proposed a new set of rules for adaptive trials that allows companies to obtain approval for a new drug with relatively new patients, but it requires them to continue running that trial adaptively until regulators declare that safety and efficacy requirements have been met. PAREXEL’s von Rickenbach noted, “Once you get into this adaptive phase, it’s highly dependent and driven by an informatics infrastructure that can support this type of development program.”

Over the years, informatics solutions have become very powerful and pervasive, as nearly every aspect of a clinical trial today incorporates technology. However, there are many more opportunities to expand technology capabilities to further efficiencies and chip away at exorbitant costs. According to von Rickenbach, this includes patient recruitment and site identification, where there’s a clear opportunity to pull all of these tools together. “Platforms such as Perceptive MyTrials are going to be the next big thing. With these platforms, you can group all of the solutions together to deploy much more effectively,” he added.

“We’ve certainly seen improvements on the technology side,” said Jamie Macdonald, chief executive officer of INC Research. “IT providers are helping improve the integration of the systems and therefore data, and that’s helping with the management of clinical development. Also, with risk-based monitoring and adaptive clinical trial design, I think the industry is making better efforts to use data and better analytics to help guide decision-making and drug development. Overall, we’re seeing improvements in protocol design, planning and execution as a result of better data and better analytics.”

While e-clinical solutions like electronic data collection (EDC) and cloud-based clinical trial management have streamlined and improved the clinical study process, they have also created a massive data overload. John Potthoff, president and chief executive officer of Theorem said, “We have been developing a range of visual analytics tools and techniques to help scientists deal with and make sense of these massive amounts of data, and the impact has been significant. With these tools, scientists are able to understand, make decisions and act on clinical results much faster than they were before. This is a particular boon to adaptive trial designs, but has smoothed and streamlined all the trials we are conducting.”

Within the e-clinical realm, CROs are trying to differentiate themselves through value-added services, such as self-service analytics for sponsors, as well as IT consulting and development services, where sponsor organizations are looking to outsource as much as they can to reduce costs. Morrison of Comprehend noted these are both growing areas among CROs.

New Opportunities Intensify Outsourcing
In line with the pharma/biopharma R&D trends mentioned, personalized/targeted medicine offers a significant opportunity for CROs, particularly those that support and help overcome the challenges this space presents. There are also a number of other areas CROs are seeing growth, including early use of adaptive designs, risk management, complex early phase trials, and notably, real-world outcomes/evidence. Sponsors big and small increasingly look to CROs to address these needs.

One of the biggest opportunities for CROs in today’s market is within personalized/targeted medicine. There is a strong move to target very specific therapies to specific patients. However, as drugs become more targeted, they become more expensive. Therefore greater efficiencies in clinical development and more collaborative measures are required to help offset expenses.
According to Nick Dyer, chief commercial officer of Novella Clinical, “We are seeing some very interesting developments in personalized medicine. The increased level of specificity is good for patients as their disease is more closely matched to a new experimental treatment. This requires CROs and sponsors to develop increasingly strategic links with investigators, specialty labs and diagnostic providers.”

In the case of costly drug therapies to treat rare diseases, for example, where drug companies charge more in order to make a profit, von Rickenbach of PAREXEL, noted the opportunity here lies in a better analytical approach to improve the economics, whereby the numbers and tradeoffs are better presented to the forums that need to make these decisions. “As it stands now, the people who gain and the people who pay are not always the same. A new approach to analytics and economics presents a valuable opportunity,” he added.

Still, the greatest motivators for outsourcing in today’s market remain tied to containing operational and infrastructure costs and gaining access to therapeutic and clinical trial expertise through capabilities that are both flexible and unique. As Pfizer’s Ranade explained, “One of the reasons for outsourcing is to access specialty technologies and relevant expertise that’s not available in-house. Additionally, outsourcing continues to be used to satisfy increased need for having additional capacity based on the internal headcount constraints for many pharmaceutical R&D organizations. Outsourcing provides the much-needed flexibility to modulate the capacity up or down depending on potentially variable internal R&D portfolio needs.”

Those with an even greater need to outsource are small and mid-sized biopharma companies that recognize how costly it is to employ a full cadre of staff needed to manage a new drug through the development lifecycle. Dyer of Novella Clinical added, “With therapeutic specialization becoming more important, having available expert staff in-house across a portfolio of products is challenging. Increasingly sponsors are maintaining a small core of corporate, scientific, medical and operational leaders and are looking for outsourced providers to bring supplemental expertise and operational capacity to their organization. This solves both financial and staffing issues for smaller companies.”    

The burgeoning field of Real World Evidence (RWE), or outcomes-based research, which is tied to current healthcare initiatives aimed at driving down costs, proving efficacy, as well as ascribing value to a product, represents another important opportunity for CROs. However, obtaining this data is not without its challenges.

“The increasing importance of Real World Evidence (RWE) will certainly raise the bar on all three fronts of safety, efficacy and quality for the pharmaceutical industry,” according to Gautam Ranade of Pfizer. “RWE is likely to require additional data to support pharmaceutical products which will be scrutinized by regulators, payers and others, which could impact product labels as well as product pricing. This additional, potential need will in turn put increased demands on the pharmaceutical suppliers supporting product development and manufacture.”

While U.S. commercial payers have been pushing for analyses of administrative claims databases for years, the field is now significantly expanding for a two reasons, according to Ted Sweeney, executive vice president, Commercialization & Outcomes at ICON. All payers are now looking for broader outcome measures, including more comprehensive economic outcomes, but also links between economic, clinical and humanistic outcomes, and to better predict likely responders and appropriate patient segments. 

The opportunity for CROs is to approach these real-world options, such as observational studies and patient registries, more strategically in a way that aligns clinical, economic, and humanistic value and demands. “Earlier planning and implementing the need for continuous value support earlier can provide a stronger position when price is set at launch,” said Sweeney. “In all studies, CROs can assist their clients in the design and measurement of patient-relevant outcomes—and what’s becoming more relevant to payers is often more complicated to measure than surrogate markers. The need to understand real world use can drive, and complicate, appropriate comparator selection and trial structure, ensuring that outcomes are established in the context of actual standard of care in different patient segments,” noted Sweeney.

Potthoff of Theorem, added, “Merely having approval from the FDA to market a product doesn’t necessarily mean that it will have real-world benefits. Payers have a right to know that the products and therapies they are paying for will have, or are having, a positive impact on the disease or condition and a beneficial effect in the real world.” Payers are therefore demanding that sponsors establish this cost-benefit ratio and sponsors are turning to CROs to help them establish the data that will prove their case.

Partnerships
While numerous partnership models exist, from functional to full-service, the common goal is to reduce development time and costs, and improve quality and outcomes. Some sponsors still approach outsourcing in functional ways, seeking no more than to supplement a specific task, while others embrace more strategic, full-service relationships that incorporate the entire spectrum of clinical services—the latter increasingly driven by obtaining results.

According to Gregg Dearhammer, chief operating officer of inVentiv Health Clinical, “The industry is pressing for new ways to generate value and performance gains. There is now general agreement that while the traditional mode of outsourcing continues to have a place in an outsourcing strategy, it cannot yield the performance levels of more strategic approaches, including functional or other strategic alliances.” 

Pharma/biopharma companies are looking to vendors to help navigate the challenges and manage risk, and deliver quality, with efficient spend and low sponsor oversight. “Services such as data management, pharmacovigilance, clinical monitoring and statistical programming have long been sourced in a functional model and continue to be. However, more complex and end-to-end tasks are being added. Further, new services such as biostatistics, medical writing, study start-up and regulatory support are now being asked for as a functional or strategic partnership,” added Dearhammer.

Bryan Haas, vice president of Clinical Development at PPD noted, “Each partnership model is customized to meet the needs of the sponsor organizations we work with.” He distinguished several examples, such as a customized partnership model with traditional CRO outsourcing combined with FSP solutions; a full service, end-to-end provider model, which services the entire outsourcing needs of the client in a one or two CRO partner model; and an asset-aligned delivery model, which can range from single service, full service and mixed models.

He added that, in any partnership model, the ability for the vendor network to be flexible and adaptive is critical. As business needs change over time, the relationships sponsors build in their vendor network only remain valuable if the vendors can adjust to changing needs.

While not all companies embrace strategic partnerships initially, some of the biggest opportunities now lie with companies that have been in a “wait and see” mode. According to PAREXEL’s Strategic Partnerships 2014 report, strategic partnerships are perceived as the most effective outsourcing approach in meeting key sponsor needs, particularly in enabling cost predictability, strategic management of the R&D portfolio, and management of capacity gaps. So by committing to long-term relationships and sharing knowledge, risks and rewards, sponsors and CROs are making strategic resourcing decisions that leverage existing expertise to bring new efficiencies. Furthermore, successful partnerships to date may provide other companies with the courage to move forward and invest in this approach. 

Geoff Garabedian vice president and managing director of Consulting at Quintiles said, “Outsourcing relationships often evolve along a continuum from transactional, tactical, ‘fee-for-service’ arrangements where price dominates, to strategic partnerships where both profits and risks are shared, and core competence is the dominant factor. Typically, the benefits and closeness of the partnership are lowest for transactional relationships and highest for strategic partnerships, thus, companies restricting themselves to less strategic options will encounter major barriers to maximizing potential benefits.”

The industry consensus is that risk sharing tends to evoke more aligned end-goals for both provider and sponsor. “Given the big-picture trends, inevitably, more risk is being shared,” said PAREXEL’s von Rickenbach. “Under the strategic partnership model, CROs become involved in responsibility for oversight and management and accept more risk. In recent years, the strategic model has played a pivotal role in advancing the overall CRO-Sponsor relationship paradigm.”

He added that, with small companies specifically, PAREXEL assumes more risk because in many cases they’re running trials in jurisdictions where the small companies don’t have a practice. Therefore, if a problem arises, authorities in the country will reach out to the supervising CRO, not the small biotech company.

Regardless of the type of partnership model employed, the successful ones are often predicated by relationships. INC Research’s Macdonald said, “We have good relations in both functional and full service areas. We have good examples of where the full service model is working very well, and where the functional service model is working well. At the other end, we have some examples where the chemistry hasn’t lined up and the relationships need more work to get them to the level that we’d like them to be.” 

Continued Challenges
Despite the prevalence of sponsor/CRO alliances, continued challenges with managing partnerships remain, and center on expectations, oversight, and getting relationships on track as quickly as possible. Moving to an outsourcing partnership requires a significant change management effort, regardless of the type of model, requiring new ways of thinking and working, and potentially breaking down cultural barriers, on both sides. Ultimately, the real measure of success of any partnership model is the ability to bring products to market faster. 

Commentary from the panel discussion, The State of Clinical Outsourcing: The Impact of Outsourcing Partnerships on Clinical Trial Optimization, at the recent Partnerships in Clinical Trials meeting, addressed these relationships. Coleen Glessner, vice president and head of Clinical Trial Process & Quality at Pfizer, noted that it could take three to four years for some partnerships to get into a really good working pattern. Pfizer has preferred strategic partnerships with both ICON and PAREXEL. Glessner added that the focus of these relationships has been transitioning studies to them and getting them running operationally, with the end goal of gaining the added benefits around innovation and improvements.

Macdonald at INC Research, who also served on the panel, commented that while four years seems like the long end, nevertheless, these partnerships take time and work. “The good thing is that sponsors are willing on their end to put the effort into these partnerships, we certainly see it and we know our competitors do as well. We want to make these relationships work. They’re critically important for both parties—for sponsors to advance their pipelines, and, depending on the alliance, can make up a large portion of CRO revenue,” Macdonald said.

“The ability to communicate and align a partnership to shared incentives remains difficult to fully achieve,” added Haas of PPD. “The industry has made great strides in moving away from the typical transactional models to more creative and incentive based structures, however we are still not fully embracing the concept. As an industry, we need to move past the line item details on cost and move to a proactive structure aligned to value and innovation.” The industry appears to be at the tipping point, but there needs to be a willingness to accept more financial risks when those risks are designed to drive innovation.

From a pharma standpoint, Pfizer’s Ranade, commented, “Timely and clear communications about project progress and the evolving needs of the customer are extremely important for outsourced development projects. It’s crucial to closely monitor the project scope in light of the emerging data.” With respect to changing pharma needs, he added that outsourcing contracts should be written to provide the necessary flexibility to adjust the scope and costs, if and when required.

As today’s R&D trends gravitate towards analytics, new development models, and stakeholder alignment to achieve drug development success, CROs are increasingly relied on to provide the necessary services across this evolving development spectrum. And while the pharma/biopharma industry has long been viewed as slow to change, outsourcing and using data in new and diverse ways are among the most progress we’ve seen of late. Obtaining data is more efficient and effective, and it’s through the use of e-clinical solutions that’s proving to be a vital approach to help meet diverse R&D objectives. 

References

1. Matthew Herper, “The Cost Of Creating A New Drug Now $5 Billion, Pushing Big Pharma To Change,” Forbes, August 2013, available at: http://www.forbes.com/sites/matthewherper/2013/08/11/how-the-staggering-cost-of-inventing-new-drugs-is-shaping-the-future-of-medicine/
2. “Strategic Partnerships 2014: Driving Biopharmaceutical Outsourcing Effectiveness,” PARXEL, March 2014, available at: http://www.parexel.com/company/news-events/press-releases/2014/strategic-partnerships-perceived-most-effective-biopharmaceutical-outsourcing-model-meeting-key-sponsor-needs