Life Science Leader, March 2013

The practice of using contract research organizations to conduct clinical trials is continuing to grow in popularity, especially as trials become more complex. Analysts estimate clinical research outsourced to CROs will grow from $31.8B in 2009 to a projected $60.8B by 2016.

Beyond reducing sponsors fixed costs, CROs have proven their ability to add value through expertise — from patient recruitment to navigating an increasingly tricky regulatory environment. And at the same time as drug makers have been focusing efforts on reducing the time and expense associated with bringing a new medicine to market, ironically it seems the FDA has been catching some blame for drug development costs increasing.

According to Avik Roy, author of “Stifling New Cures: The True Cost of Lengthy Clinical Drug Trials,” the primary source of rising costs over the past fifteen years has been the regulatory process governing Phase III trials. He uses data from Tufts (from 1999 to 2005) to support his theory, reiterating that the length of a clinical trial has increased by 70% and the average number of routine procedures per trial has increased by 65%, while enrollment criteria and trial protocols resulted in 21% fewer volunteers being admitted to trials, and 30% of qualified participants dropping out before the study was completed. In order to keep up with these changes, it makes sense to engage the help of an external expert.

And at the same time as drug makers have been focusing efforts on reducing the time and expense associated with bringing a new medicine to market, ironically it seems the FDA has been catching some blame for drug development costs increasing.

Fraught with a multitude of FDA regulations and an average duration of eight years, it’s no surprise that clinical research is one of the most frequently outsourced elements of the drug development process. According to Nice Insight’s most recent outsourcing survey, nearly half of Big Pharma respondents (46%) stated they would engage a CRO for clinical research during the next twelve months. Specialty Pharma companies and Emerging Biotechs were just as likely to outsource clinical research, with 45% and 42% respectively. Emerging Pharma and Big Biotech were slightly behind, with roughly one-third stating it is a service they will outsource in the coming year.

Not only do drug innovators from every buying category plan to engage a CRO for clinical research, they tend to have drug candidates in more than one therapeutic area for which they are looking for a CRO. Not surprisingly, Big Pharma companies had drug candidates in more therapeutic areas than the others. On average, Big Pharma companies are looking for CROs to provide clinical research for drug candidates in three therapeutic categories. Oncology (55%), cardiovascular (47%), CNS disorders (43%) and infectious diseases (43%) were the most common therapeutic categories among Big Pharma respondents.

Biotechs (1.8) and Specialty Pharma (1.7) companies intend to outsource drug candidates in approximately two therapeutic categories to CROs during the next 12 months. Oncology (39%), infectious diseases (36%) and metabolic disorders (24%) were the most popular therapeutic categories among Biotechs. Specialty Pharma companies showed similarities to Big Pharma, outsourcing clinical research for drug candidates in infectious diseases (27%), oncology (26%) and cardiovascular diseases (20%). Emerging Pharma (1.5) and Emerging Biotech (1.4) had slightly fewer therapeutic areas of focus for upcoming clinical research. Both emerging segments had cardiovascular therapeutics in development. However, Emerging Biotechs were much more likely to have infectious diseases candidates in development, whereas Emerging Pharma indicated oncology and respiratory diseases as additional therapeutic areas of focus.

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If Avik Roy is correct in identifying the significant increase in costs occurring in Phase III trials, the question in the trend towards the use of CROs is whether their expertise can mitigate these rising process expenses. This will be fundamental to controlling overall development costs and getting therapies to market faster.