Life Science Leader, May 2014

Figures reported by the Tufts Center for the Study of Drug Development state the average capitalized cost of bringing a new drug to market is about $1.3B. Compare that to the 1991 cost of $318M, and after adjusting the amount for general inflation, it shows a 260% increase over the course of two decades in the cost of developing a drug.

Industry data relays that the bulk of drug development costs are incurred during clinical trials, oftentimes, phase 3 trials.  Increased costs make sense when viewed alongside the increase in the average length of a clinical trial (up 70 percent) and the average number of routine procedures per trial (up 65 percent) and the average clinical trial staff work burden (up 67 percent). Despite costs sharply rising, it is highly unlikely we will see a decline in clinical research. 

In fact, in the past three years of Nice Insight research, the data has shown an increase in outsourcing clinical trials from 28 percent of respondents in 2012 to 41 percent in 2014. Big Pharma has the highest rate of outsourcing clinical trials, at 46 percent and emerging pharma showed the lowest incidence at 36 percent.  This increase coincides with a sharp uptick in the number of registered studies on clinicaltrials.gov — 139,004 in 2012 and 164,703 as of April 8, 2014.  As more biopharmaceutical companies emerge with the goal of developing new medicines, and each potential drug requires extensive clinical testing, it is a number that will continue to grow rapidly. 

Partnering with a discovery-phase CRO with high scores in productivity and innovation can add value and reduce costs in early development. 

Considering the majority of these clinical trials will be outsourced to CROs, are there ways CROs can help reduce the cost of bringing a new medicine to market? Definitely. In the early stages of drug development, a good CRO can help to improve preclinical throughput. As hypothesized in Approaches to Assessing Drug Safety in the Discovery Phasean estimated 10 percent improvement in predicting failure before the initiation of clinical trials could save upwards of $100M in the costs associated with drug development. Partnering with a discovery-phase CRO with high scores in productivity and innovation can add value and reduce costs in early development. 

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A Discovery-Phase CRO Can Add Value and Reduce Costs in Early Development

A key area in clinical trial monitoring that has been encouraged by regulatory authorities, but has yet to be widely adopted, is risk based monitoring (RBM). Partnering with a CRO that specializes in RBM can ensure a strategy where the efficiencies over traditional monitoring provide a financial break. An experienced CRO will be able to assist in identifying and defining the risks associated with the study and be able to implement the appropriate risk-management strategy. A clinical phase CRO with therapeutic experience relevant to the study and solid scores in quality will help to ensure a smooth transition to risk-based monitoring where resources can be effectively prioritized without compromising the integrity of the study.
 
Technology plays an important role in risk-based monitoring in terms of remote data capture and clinical trial monitoring systems that help to monitor specific sets of data for source-document verification.  Technology can also present an opportunity for reducing errors and expediting results through electronic data collection.  Electronic data collection can also reduce costs by decreasing set up time for new studies because the standards will have been established during the initial software setup.  Nice Insight research has shown CROs that offer data management services score above the benchmark for regulatory and productivity in addition to being perceived as more affordable.  These are just some of the ways forming strategic partnerships with innovative CROs can add value beyond reducing internal fixed costs — the right CRO can help decrease the cost of bringing a new drug to market.