Kristin Brooks06.01.10
CRO Industry Update
Riding the R&D recession wave
The pharma and biopharma industry is under pressure to produce. With continued R&D cuts, both in the workforce and financially, and compound attrition at all stages, productivity is less than adequate. Eliminating drugs that don’t show promise early on has become essential to drug development and new approaches to R&D and outsourcing models, including alliances and partnerships, may prove the best way to brings new products to market.
CROs are not strangers to the peeks and valleys of R&D cycles. In the past, CROs have managed to mitigate the valleys and exploit the peaks by anticipating trends, through strategic business models, and a growing portfolio of global services. Although the economic downturn has added a certain level of financial stress, it seems that, according to many of the CROs I spoke with, when the going gets tough, sponsors tend to outsource more.
Additional areas currently influencing the industry are globalization and increased regulatory oversight, which has created an uptick in regulatory services, and consolidation, which has led to increased outsourcing and the development of new sponsor/CRO partnership models. Companies also continue to leverage the latest electronic data capture (EDC) technologies to help streamline the drug development process with real-time data, as well as lower overall development costs.
Outsourcing Trends in a Down Economy
Despite the economic downturn and diminished R&D resources, CROs continue to play a major role providing sponsors with various outsourcing and drug development solutions aimed at optimizing pipelines and achieving greater efficiency and productivity. What has been essential to CRO survival, however, is a balanced portfolio of pharma and biopharma clients to help offset the hard-hit biotech sector. One of the reasons CROs are able to respond to and survive the down economy has been greater clarity with pharma pipelines, which has helped CROs to create efficiencies and plan capacity.
Simon Higginbotham, senior vice president and chief marketing officer of Kendle, noted that the downturn in the economy has ultimately strengthened his company’s ability to serve as better, more strategic partners to its customers. “The need to reduce costs has driven efficiency and pushed us to develop more innovative solutions. In recent years the CRO sector has made an increasing contribution to the global drug development enterprise, working more closely and collaboratively with biopharma customers in all markets around the world. Today, CROs constitute approximately half of the research workforce involved in drug and medical product development,” said Mr. Higginbotham. He also mentioned that a greater reliance on CRO/sponsor partnerships has led to earlier visibility and resource planning, enabling CROs to better anticipate periods of highs and lows and fluctuating pipelines.
Success in the pharma/biopharma industry will ultimately depend on moving a larger number of compounds through the discovery and clinical development gates into the market. According to Josef von Rickenbach, chairman and chief executive officer of PAREXEL International, “It takes a different kind of R&D strategy to make that work. Despite the past economic environment and continued pressure on the pipeline, the emerging and ongoing trends will be favorable for the biopharmaceutical services industry. Industry challenges should further drive innovation and enhance the performance of R&D investments. Service providers have an important role to play, in partnership with sponsors, to fulfill that promise.”
The greatest value of a CRO, according to Harshad Sodha, head of clinical data management at Quanticate, is to handle the highs and lows and fluctuating pipelines. “Certainly many full-service CROs experienced delays or cancellations this past year, but the fact that a CRO provides services to a wide range of sponsors means that the risk of fluctuating pipelines is somewhat mitigated,” Mr. Sodha said. For CROs with unbalanced client portfolios, this value can be lost.
“Most companies — with the exception of biotechs — are not outsourcing all, or even the majority, of their development work. This gives CROs a bit of a buffer. Also, there’s greater visibility now in the supplier-host relationship and sponsor pipelines are more visible, so CROs can plan for fluctuation. The down economy has hit biotech companies hard, and they outsource a much greater percentage, if not all, of their work, so CROs that had predominantly worked with biotechs have had it the worst,” remarked Jeff Thomis, president of Quintiles Core Clinical. “There will be bumps in the road, but clearly the overall direction is toward greater clinical outsourcing and the increased use of strategic alliances.”
Globalization Ups Regulatory Services
A growing volume of global drug development and commercialization activity during the past decade has dramatically increased the workload for regulatory affairs professionals at pharma and biopharma companies, according to a study recently completed by the Tufts Center for the Study of Drug Development. This comes at a time when a growing number of those companies are outsourcing more of their clinical trial work to CROs, which are now stepping up their consulting businesses and delving into regulatory support services.
“Greater regulatory scrutiny has increased sponsor interest for regulatory services, which has benefited CROs with expertise in this area,” said Mike Wilkinson, executive vice president of clinical development at PPD, Inc. “PPD is working more closely with our clients now in regulatory oversight and affairs than we did five years ago. Higher expectations from regulatory inspectors in reporting and resolving problems with clinical trials means clients are expecting CROs to provide performance and quality metrics on a wide range of activities.”
Mr. Thomis of Quintiles also noted that sponsor interest for regulatory services has increased across the board. “In particular, we’ve seen a definite uptick in the demand for remediation services provided by the Regulatory and Quality Practice within Quintiles Consulting — especially since the FDA more than doubled the number of drug GMP warning letters issued in fiscal year 2009 vs. the previous year. In addition, an increase in the FDA 2009 budget has enabled the agency to hire additional inspectors and they conduct more inspections. There was a similar increase for the 2010 budget and the same is expected for 2011.”
PAREXEL has seen a steady increase in regulatory affairs outsourcing for entire product classes and geographies. According to Mr. von Rickenbach, “We have worked with regulatory authorities throughout the world, and have a global team of experts including former regulatory officials and biopharmaceutical industry professionals. Our consultants help companies define and execute the most efficient paths to approval, manage successful interactions with regulatory agencies, and deliver submissions for regional and international markets, including simultaneous multi-country filings.”
Smaller and emerging pharma/biopharma companies depend on advice from experienced CROs and consultants to form their regulatory strategy, but this is shifting to include larger pharma companies. According to Dr. Fred Pritchard, vice president of drug development at Celerion, “The regulatory business — in terms of preparing and filing new INDs, preparing summaries and sections of NDAs and managing interactions with regulatory agencies — has remained steady despite the global recession and is now increasing. While historically much of this business came from smaller companies, large pharma clients are now beginning to outsource more of this work. For a CRO this usually means adapting to much more rigid publication requirements to match the assembly and publishing systems that have evolved within large pharmaceutical organizations to manage their global submissions.” Dr. Pritchard also noted that there is more openness from large pharma to get opinions from CROs regarding their regulatory strategies.
Mr. Wilkinson of PPD added another perspective, “Over the course of the past 23 years, the FDA approved the fewest number of drugs just last year and has been clear that it expects to see more data with regulatory submissions. This scrutiny has created increased pressure for biopharmaceutical companies because larger trials mean more sites, patients, and oversight in managing and reporting large data sets. As a result, CROs are playing a more active role in developing risk management strategies during the drug development process to gain a better understanding of the safety of products. By conducting more studies that investigate potential safety concerns prior to submitting marketing applications, we are able to work closely with our clients to develop coordinated risk management plans that satisfy regulatory agency requirements.”
“In response to increased safety concerns in the U.S. regulatory market and the adoption of REMS regulations, customers also are demanding more strategies around post-approval and commercialization, with a strong focus on patient safety and pharmacovigilance. This is evidenced by an annual growth rate of approximately 20% in the post-approval market with a current industry investment of more than $10 billion,” remarked Mr. Higginbotham of Kendle.
The key message, according to Alain Stricker-Krongrad, Ph.D. chief scientific officer at Charles River, is that innovation takes place in a mandated and regulated environment and as a consequence the need for regulatory services has been increasing and will continue to increase. He remarked, “In our opinion, this is where a CRO with regulatory expertise, balanced with experience in innovative scientific solutions, can play a major role in providing a compliant, rational drug development approach.”
With increased demand, some service providers are considering adding regulatory services to their portfolio. Quanticate, a provider of clinical data management, statistical programming and analysis, medical writing, pharmacovigilance and consultancy services, is one such company. Mr. Sodha of Quanticate noted, “We currently outsource our regulatory needs but we are certainly considering adding regulatory services to our portfolio. With varying regulations, particularly across European countries, there is a continued demand for these services.”
Consolidation and New Partnerships
Industry consolidation this past year has inevitably had an impact on CROs as well as their partnerships with sponsors. Now that several of the big pharma mega-mergers are winding down, sponsors are starting to pick up where they left off. CROs are beginning to see more focused partnerships that go beyond simply creating efficiencies to examining risk-sharing. “There have been a lot of trial delays as pharma sorted through this consolidation and prioritized the programs they planned to move forward,” said Mr. Wilkinson of PPD. “We’re now seeing a stronger sense of urgency from our clients in moving these programs forward. Rising development costs and greater regulatory scrutiny to ensure drug safety have led to more strategic partnerships between pharma companies and CROs as a way to harness the scientific and operational knowledge of both organizations.”
“Big Pharma consolidation has lead to intense competition between CROs to win work from fewer, but larger, biopharma customers. It’s also increased competition among CROs to find resources to undertake that work,” said Mr. Thomis of Quintiles. “Customers are much more focused on outcomes-based pricing and, therefore, delivery.We’re seeing much greater demand for large-scale functional resourcing in which a CRO, or a couple of CROs, take responsibility for providing services, like data management, on a global basis for customers.”
Accountability has also shifted, according to Mr. Thomis: “Biopharma companies want CROs to take greater risk and responsibility for outcomes-based agreements, but are reluctant to accept the fact that with greater risk there also has to be greater reward. This is a sharp learning curve for both biopharma companies and CROs. As a result, there is a prediction that some CROs, in order to win this type of business, will enter into contracts they might regret later. There has to be a proper balance of risks and rewards for outsourcing companies in order for them to take on these types of contracts on a large scale. We think that customers focused on increasing value and sharing risks and rewards will be the ones that succeed in the new health landscape. With about $128 billion of branded revenues losing patent protection between 2009 through 2014, traditional cost-cutting measures aren’t enough. Forward-thinking companies are using outsourcing to transform their business model to increase productivity and accelerate outcomes.” He cited Quintiles’ strategic development alliance with Solvay Pharmaceuticals, which reduced the total cycle time for its clinical studies by 40%, created tremendous cost savings and faster go/no-go decisions. “The trend is definitely toward large strategic alliances as companies recognize the benefits of sharing risks and rewards with an ally they can trust,” added Mr. Thomis.
In addition to more strategic approaches to partnering, sponsors continue to reevaluate outsourcing strategies. Mr. Higginbotham of Kendle commented, “While there continues to be variety in partnership models across the industry, several customers are trying to innovate. One example is the fully integrated network model, where CROs and other vendors play an increased role in delivery of core functions across the development cycle. We are seeing an increasing trend toward more focused and strategic outsourcing, with customers re-evaluating all of their outsourcing strategies and to some extent consolidating the number of providers.” He noted that sponsors are not consolidating down to two or three providers, but rather two to three providers within segments of their clinical development needs.
As sponsors and CROs alike begin to embrace models where both partners assume increased responsibility for delivery, contractual relationships themselves have also changed. According to Kendle’s Mr. Higginbotham, “Risk-sharing models, in which specific goals and milestones are outlined and compensation is tied to delivery against those goals, are becoming more common. There is also increased interest in asset transfer models following several high-profile agreements of this type in the industry. Finally, we are seeing a return to outcomes-based contracting occurring around patient access and delivery and site selection as opposed to areas such as data management. Regardless of model, the goal remains the same: drive innovation and value into the process, reduce costs and speed time to market for new medications.”
“Overall, now that big merger deals have been closed, we are seeing a more decisive environment and renewed commitment to R&D programs,” Mr. von Rickenbach of PAREXEL noted. “There continues to be a growing focus in the industry on strategic partnerships between sponsors and service providers to develop new approaches to help drive efficiency, accelerate time to market, reduce costs, and expand reach into markets around the world. These new approaches rely on integrated, long-term relationships with a small number of key partners to create a strategic, cost-effective blend of internal and external resources.”
EDC Evolution
EDC is becoming more and more comprehensive as new tools are created to provide greater interoperability among various clinical data. Additionally, EDC is being used earlier in the clinical development process, breaking into Phase I and II trials. EDC alliances with CROs are also on the rise. And, in an effort to streamline and enhance real-time data, EDC vendors are even partnering with each other.
In addition to updating and enhancing EDC tools, EDC providers have been developing suites of products that integrate with EDC to provide added capabilities. The latest trends have focused on leveraging the benefits from the integration of EDC systems and other electronic clinical trial technologies, such as interactive voice/web response (IVR/IWR), clinical trial management, central laboratory, pharmacovigilance, electronic investigator payment systems, and electronic patient reported outcomes (ePRO) systems. “In addition to EDC, there are options for integrated applications such as SAE tools, central data repositories, CTMS, and even protocol authoring tools,” said Ross Rothmeier, senior director of Global EDC Solutions at Covance. “Two key areas of emphasis from a process standpoint include the use of standard libraries, especially CDISC (in particular SDTM and ODM with BRIDG and/or CDASH), and remote site management or monitoring. EDC figures prominently in both of these.”
This integration of add-on capabilities has the potential to cut the cost and development time of clinical research, but obtaining standards remains an impediment. Graham Bunn, vice president of partnerships and alliances at Medidata, said, “One of the key recent developments within the EDC space has been the adoption of interoperability standards to ensure that EDC systems do not operate within a silo from other electronic systems used to support a clinical trial. The implementation of stand-alone EDC has already powered many new process and time efficiencies across the clinical trial process. However, it is becoming clear that the scale of these improvements is just the tip of the iceberg of improvements available to the industry through the integration of one or more electronic trial systems. To enable such interoperability, EDC vendors have needed to ensure they can support standard formats of data exchange, particularly CDISC ODM, and also provide programmatic ways of exchanging this standardized data with different applications using web-based services through an application programming interface.”
Despite upfront costs, CROs are leveraging EDC technology as part of an effort to lower overall drug development costs. Data derived from the latest technologies can have a positive impact during the clinical development process. According to Dr. Pritchard of Celerion, “Rapid retrieval and ability to recall quality data can greatly enhance the decision process of whether or not to progress a drug at key stages or decision gates in early clinical drug development. Knowledge about a drug is what determines its value and the sooner the key information is available, the sooner the product may acquire real value. Only those products that reach a threshold of value will be progressed into later stages of drug development.”
EDC has proven to be particularly beneficial for late-phase (Phase III-IV) studies and pharmacovigilance and post-market safety studies, but this changing to include earlier stages of development. Several factors have previously impeded the use of EDC in earlier studies, according to Mr. Bunn, “Phase I and IIa typically have small budgets and short timelines, they also require very rapid startup and often need to integrate data from lab systems and other eClinical solutions. The key to making EDC work within Phase I and IIa trials centers on getting the costs right, choosing a system that facilitates a short and efficient build process and rapid integrations. EDC capabilities like global libraries, rapid point-and-click eCRF development and test processes, and support for CDASH forms and CDISC ODM APIs, are essential.”
According to Mr. Rothmeier of Covance, “EDC in Phase I is a natural fit due to the standardized nature of the trials and the need to see the data as soon as possible. By reusing standard forms, setting up an EDC trial in Phase I can be done quickly. Because the data is entered into a database at the site, monitors can see the data as soon as it is entered, rather than waiting for data to get entered into a back-office system somewhere.”
Dr. Pritchard added, “Unlike late-phase studies where EDC facilitates the capture of data from a large number of dispersed patients, the driver for EDC in early clinical research is capturing data-dense information quickly from a relatively small number of subjects so decisions on dose, safety, and early signs of efficacy, can be made as soon as possible. Employing all available tools that help manage risk is the key to survival in the drug development business. While such data enrichment adds some cost to the early studies, the ability to make better decisions faster ultimately lowers the cost of drug development.”
EDC Alliances
Partnerships with CROs aren’t limited to the sponsor variety. The industry is beginning to see numerous EDC/CRO partnerships using the same key principals leveraged in sponsor/CRO models, including strategic, tactical and preferred provider.
PPD for example has EDC preferred provider relationships in place with Oracle, Phase Forward (now part of Oracle) and Medidata, in addition to working with more than 60 vendors depending on client need. Mr. Wilkinson of PPD noted, “In addition, CROs are working closely with EDC vendors to provide feedback and input into their system design. PPD was one of Oracle’s group of customer advisors, working closely with the company to develop new functionality for Oracle Remote Data Capture Onsite 4.5.3 an on the new 4.6 release. We focused particularly on increasing investigator site performance, simplifying the user interface and eliminating site software installation through a fully Web-based EDC system.”
Additionally, as EDC vendors attempt to make clinical research more real-time, they partner with other vendors. Paula Brown Stafford, executive vice president, Integrated Clinical Services at Quintiles, commented, “I am beginning to see EDC providers ally with safety, IVR and analytics businesses in order to streamline integration and facilitate rapid data sharing. These partnerships will continue to grow as the industry strives to make clinical research more real-time.”
According to Kendle’s Mr. Higginbotham, “We expect to see growth in the number of strategic partnerships and alliances, growth in the number and quality of solutions offered by CROs, and growth in the talent base, thereby catapulting the industry to the next generation of strategic partnering, delivering higher value and efficiencies than ever before.”
Jefferies and Company recently estimated that the overall CRO market will reach $21.7 billion in 2010, increasing to $29.7 billion by 2015. Although the pharma/biopharma industry continues to face many challenges, CROs continue to adapt and evolve in the changing environment. Consolidation, regulatory hurdles, and the down economy have certainly kept CROs on their toes. Looking to the future and anticipating change with the flexibility and adaptability CROs are known for, should prove sufficient for continued growth.
Kristin Brooks is associate editor at Contract Pharma. She can be reached at kbrooks@rodpub.com.
Riding the R&D recession wave
The pharma and biopharma industry is under pressure to produce. With continued R&D cuts, both in the workforce and financially, and compound attrition at all stages, productivity is less than adequate. Eliminating drugs that don’t show promise early on has become essential to drug development and new approaches to R&D and outsourcing models, including alliances and partnerships, may prove the best way to brings new products to market.
CROs are not strangers to the peeks and valleys of R&D cycles. In the past, CROs have managed to mitigate the valleys and exploit the peaks by anticipating trends, through strategic business models, and a growing portfolio of global services. Although the economic downturn has added a certain level of financial stress, it seems that, according to many of the CROs I spoke with, when the going gets tough, sponsors tend to outsource more.
Additional areas currently influencing the industry are globalization and increased regulatory oversight, which has created an uptick in regulatory services, and consolidation, which has led to increased outsourcing and the development of new sponsor/CRO partnership models. Companies also continue to leverage the latest electronic data capture (EDC) technologies to help streamline the drug development process with real-time data, as well as lower overall development costs.
Outsourcing Trends in a Down Economy
Despite the economic downturn and diminished R&D resources, CROs continue to play a major role providing sponsors with various outsourcing and drug development solutions aimed at optimizing pipelines and achieving greater efficiency and productivity. What has been essential to CRO survival, however, is a balanced portfolio of pharma and biopharma clients to help offset the hard-hit biotech sector. One of the reasons CROs are able to respond to and survive the down economy has been greater clarity with pharma pipelines, which has helped CROs to create efficiencies and plan capacity.
Simon Higginbotham, senior vice president and chief marketing officer of Kendle, noted that the downturn in the economy has ultimately strengthened his company’s ability to serve as better, more strategic partners to its customers. “The need to reduce costs has driven efficiency and pushed us to develop more innovative solutions. In recent years the CRO sector has made an increasing contribution to the global drug development enterprise, working more closely and collaboratively with biopharma customers in all markets around the world. Today, CROs constitute approximately half of the research workforce involved in drug and medical product development,” said Mr. Higginbotham. He also mentioned that a greater reliance on CRO/sponsor partnerships has led to earlier visibility and resource planning, enabling CROs to better anticipate periods of highs and lows and fluctuating pipelines.
Success in the pharma/biopharma industry will ultimately depend on moving a larger number of compounds through the discovery and clinical development gates into the market. According to Josef von Rickenbach, chairman and chief executive officer of PAREXEL International, “It takes a different kind of R&D strategy to make that work. Despite the past economic environment and continued pressure on the pipeline, the emerging and ongoing trends will be favorable for the biopharmaceutical services industry. Industry challenges should further drive innovation and enhance the performance of R&D investments. Service providers have an important role to play, in partnership with sponsors, to fulfill that promise.”
The greatest value of a CRO, according to Harshad Sodha, head of clinical data management at Quanticate, is to handle the highs and lows and fluctuating pipelines. “Certainly many full-service CROs experienced delays or cancellations this past year, but the fact that a CRO provides services to a wide range of sponsors means that the risk of fluctuating pipelines is somewhat mitigated,” Mr. Sodha said. For CROs with unbalanced client portfolios, this value can be lost.
“Most companies — with the exception of biotechs — are not outsourcing all, or even the majority, of their development work. This gives CROs a bit of a buffer. Also, there’s greater visibility now in the supplier-host relationship and sponsor pipelines are more visible, so CROs can plan for fluctuation. The down economy has hit biotech companies hard, and they outsource a much greater percentage, if not all, of their work, so CROs that had predominantly worked with biotechs have had it the worst,” remarked Jeff Thomis, president of Quintiles Core Clinical. “There will be bumps in the road, but clearly the overall direction is toward greater clinical outsourcing and the increased use of strategic alliances.”
Globalization Ups Regulatory Services
A growing volume of global drug development and commercialization activity during the past decade has dramatically increased the workload for regulatory affairs professionals at pharma and biopharma companies, according to a study recently completed by the Tufts Center for the Study of Drug Development. This comes at a time when a growing number of those companies are outsourcing more of their clinical trial work to CROs, which are now stepping up their consulting businesses and delving into regulatory support services.
“Greater regulatory scrutiny has increased sponsor interest for regulatory services, which has benefited CROs with expertise in this area,” said Mike Wilkinson, executive vice president of clinical development at PPD, Inc. “PPD is working more closely with our clients now in regulatory oversight and affairs than we did five years ago. Higher expectations from regulatory inspectors in reporting and resolving problems with clinical trials means clients are expecting CROs to provide performance and quality metrics on a wide range of activities.”
Mr. Thomis of Quintiles also noted that sponsor interest for regulatory services has increased across the board. “In particular, we’ve seen a definite uptick in the demand for remediation services provided by the Regulatory and Quality Practice within Quintiles Consulting — especially since the FDA more than doubled the number of drug GMP warning letters issued in fiscal year 2009 vs. the previous year. In addition, an increase in the FDA 2009 budget has enabled the agency to hire additional inspectors and they conduct more inspections. There was a similar increase for the 2010 budget and the same is expected for 2011.”
PAREXEL has seen a steady increase in regulatory affairs outsourcing for entire product classes and geographies. According to Mr. von Rickenbach, “We have worked with regulatory authorities throughout the world, and have a global team of experts including former regulatory officials and biopharmaceutical industry professionals. Our consultants help companies define and execute the most efficient paths to approval, manage successful interactions with regulatory agencies, and deliver submissions for regional and international markets, including simultaneous multi-country filings.”
Smaller and emerging pharma/biopharma companies depend on advice from experienced CROs and consultants to form their regulatory strategy, but this is shifting to include larger pharma companies. According to Dr. Fred Pritchard, vice president of drug development at Celerion, “The regulatory business — in terms of preparing and filing new INDs, preparing summaries and sections of NDAs and managing interactions with regulatory agencies — has remained steady despite the global recession and is now increasing. While historically much of this business came from smaller companies, large pharma clients are now beginning to outsource more of this work. For a CRO this usually means adapting to much more rigid publication requirements to match the assembly and publishing systems that have evolved within large pharmaceutical organizations to manage their global submissions.” Dr. Pritchard also noted that there is more openness from large pharma to get opinions from CROs regarding their regulatory strategies.
Mr. Wilkinson of PPD added another perspective, “Over the course of the past 23 years, the FDA approved the fewest number of drugs just last year and has been clear that it expects to see more data with regulatory submissions. This scrutiny has created increased pressure for biopharmaceutical companies because larger trials mean more sites, patients, and oversight in managing and reporting large data sets. As a result, CROs are playing a more active role in developing risk management strategies during the drug development process to gain a better understanding of the safety of products. By conducting more studies that investigate potential safety concerns prior to submitting marketing applications, we are able to work closely with our clients to develop coordinated risk management plans that satisfy regulatory agency requirements.”
“In response to increased safety concerns in the U.S. regulatory market and the adoption of REMS regulations, customers also are demanding more strategies around post-approval and commercialization, with a strong focus on patient safety and pharmacovigilance. This is evidenced by an annual growth rate of approximately 20% in the post-approval market with a current industry investment of more than $10 billion,” remarked Mr. Higginbotham of Kendle.
The key message, according to Alain Stricker-Krongrad, Ph.D. chief scientific officer at Charles River, is that innovation takes place in a mandated and regulated environment and as a consequence the need for regulatory services has been increasing and will continue to increase. He remarked, “In our opinion, this is where a CRO with regulatory expertise, balanced with experience in innovative scientific solutions, can play a major role in providing a compliant, rational drug development approach.”
With increased demand, some service providers are considering adding regulatory services to their portfolio. Quanticate, a provider of clinical data management, statistical programming and analysis, medical writing, pharmacovigilance and consultancy services, is one such company. Mr. Sodha of Quanticate noted, “We currently outsource our regulatory needs but we are certainly considering adding regulatory services to our portfolio. With varying regulations, particularly across European countries, there is a continued demand for these services.”
Consolidation and New Partnerships
Industry consolidation this past year has inevitably had an impact on CROs as well as their partnerships with sponsors. Now that several of the big pharma mega-mergers are winding down, sponsors are starting to pick up where they left off. CROs are beginning to see more focused partnerships that go beyond simply creating efficiencies to examining risk-sharing. “There have been a lot of trial delays as pharma sorted through this consolidation and prioritized the programs they planned to move forward,” said Mr. Wilkinson of PPD. “We’re now seeing a stronger sense of urgency from our clients in moving these programs forward. Rising development costs and greater regulatory scrutiny to ensure drug safety have led to more strategic partnerships between pharma companies and CROs as a way to harness the scientific and operational knowledge of both organizations.”
“Big Pharma consolidation has lead to intense competition between CROs to win work from fewer, but larger, biopharma customers. It’s also increased competition among CROs to find resources to undertake that work,” said Mr. Thomis of Quintiles. “Customers are much more focused on outcomes-based pricing and, therefore, delivery.We’re seeing much greater demand for large-scale functional resourcing in which a CRO, or a couple of CROs, take responsibility for providing services, like data management, on a global basis for customers.”
Accountability has also shifted, according to Mr. Thomis: “Biopharma companies want CROs to take greater risk and responsibility for outcomes-based agreements, but are reluctant to accept the fact that with greater risk there also has to be greater reward. This is a sharp learning curve for both biopharma companies and CROs. As a result, there is a prediction that some CROs, in order to win this type of business, will enter into contracts they might regret later. There has to be a proper balance of risks and rewards for outsourcing companies in order for them to take on these types of contracts on a large scale. We think that customers focused on increasing value and sharing risks and rewards will be the ones that succeed in the new health landscape. With about $128 billion of branded revenues losing patent protection between 2009 through 2014, traditional cost-cutting measures aren’t enough. Forward-thinking companies are using outsourcing to transform their business model to increase productivity and accelerate outcomes.” He cited Quintiles’ strategic development alliance with Solvay Pharmaceuticals, which reduced the total cycle time for its clinical studies by 40%, created tremendous cost savings and faster go/no-go decisions. “The trend is definitely toward large strategic alliances as companies recognize the benefits of sharing risks and rewards with an ally they can trust,” added Mr. Thomis.
In addition to more strategic approaches to partnering, sponsors continue to reevaluate outsourcing strategies. Mr. Higginbotham of Kendle commented, “While there continues to be variety in partnership models across the industry, several customers are trying to innovate. One example is the fully integrated network model, where CROs and other vendors play an increased role in delivery of core functions across the development cycle. We are seeing an increasing trend toward more focused and strategic outsourcing, with customers re-evaluating all of their outsourcing strategies and to some extent consolidating the number of providers.” He noted that sponsors are not consolidating down to two or three providers, but rather two to three providers within segments of their clinical development needs.
As sponsors and CROs alike begin to embrace models where both partners assume increased responsibility for delivery, contractual relationships themselves have also changed. According to Kendle’s Mr. Higginbotham, “Risk-sharing models, in which specific goals and milestones are outlined and compensation is tied to delivery against those goals, are becoming more common. There is also increased interest in asset transfer models following several high-profile agreements of this type in the industry. Finally, we are seeing a return to outcomes-based contracting occurring around patient access and delivery and site selection as opposed to areas such as data management. Regardless of model, the goal remains the same: drive innovation and value into the process, reduce costs and speed time to market for new medications.”
“Overall, now that big merger deals have been closed, we are seeing a more decisive environment and renewed commitment to R&D programs,” Mr. von Rickenbach of PAREXEL noted. “There continues to be a growing focus in the industry on strategic partnerships between sponsors and service providers to develop new approaches to help drive efficiency, accelerate time to market, reduce costs, and expand reach into markets around the world. These new approaches rely on integrated, long-term relationships with a small number of key partners to create a strategic, cost-effective blend of internal and external resources.”
EDC Evolution
EDC is becoming more and more comprehensive as new tools are created to provide greater interoperability among various clinical data. Additionally, EDC is being used earlier in the clinical development process, breaking into Phase I and II trials. EDC alliances with CROs are also on the rise. And, in an effort to streamline and enhance real-time data, EDC vendors are even partnering with each other.
In addition to updating and enhancing EDC tools, EDC providers have been developing suites of products that integrate with EDC to provide added capabilities. The latest trends have focused on leveraging the benefits from the integration of EDC systems and other electronic clinical trial technologies, such as interactive voice/web response (IVR/IWR), clinical trial management, central laboratory, pharmacovigilance, electronic investigator payment systems, and electronic patient reported outcomes (ePRO) systems. “In addition to EDC, there are options for integrated applications such as SAE tools, central data repositories, CTMS, and even protocol authoring tools,” said Ross Rothmeier, senior director of Global EDC Solutions at Covance. “Two key areas of emphasis from a process standpoint include the use of standard libraries, especially CDISC (in particular SDTM and ODM with BRIDG and/or CDASH), and remote site management or monitoring. EDC figures prominently in both of these.”
This integration of add-on capabilities has the potential to cut the cost and development time of clinical research, but obtaining standards remains an impediment. Graham Bunn, vice president of partnerships and alliances at Medidata, said, “One of the key recent developments within the EDC space has been the adoption of interoperability standards to ensure that EDC systems do not operate within a silo from other electronic systems used to support a clinical trial. The implementation of stand-alone EDC has already powered many new process and time efficiencies across the clinical trial process. However, it is becoming clear that the scale of these improvements is just the tip of the iceberg of improvements available to the industry through the integration of one or more electronic trial systems. To enable such interoperability, EDC vendors have needed to ensure they can support standard formats of data exchange, particularly CDISC ODM, and also provide programmatic ways of exchanging this standardized data with different applications using web-based services through an application programming interface.”
Despite upfront costs, CROs are leveraging EDC technology as part of an effort to lower overall drug development costs. Data derived from the latest technologies can have a positive impact during the clinical development process. According to Dr. Pritchard of Celerion, “Rapid retrieval and ability to recall quality data can greatly enhance the decision process of whether or not to progress a drug at key stages or decision gates in early clinical drug development. Knowledge about a drug is what determines its value and the sooner the key information is available, the sooner the product may acquire real value. Only those products that reach a threshold of value will be progressed into later stages of drug development.”
EDC has proven to be particularly beneficial for late-phase (Phase III-IV) studies and pharmacovigilance and post-market safety studies, but this changing to include earlier stages of development. Several factors have previously impeded the use of EDC in earlier studies, according to Mr. Bunn, “Phase I and IIa typically have small budgets and short timelines, they also require very rapid startup and often need to integrate data from lab systems and other eClinical solutions. The key to making EDC work within Phase I and IIa trials centers on getting the costs right, choosing a system that facilitates a short and efficient build process and rapid integrations. EDC capabilities like global libraries, rapid point-and-click eCRF development and test processes, and support for CDASH forms and CDISC ODM APIs, are essential.”
According to Mr. Rothmeier of Covance, “EDC in Phase I is a natural fit due to the standardized nature of the trials and the need to see the data as soon as possible. By reusing standard forms, setting up an EDC trial in Phase I can be done quickly. Because the data is entered into a database at the site, monitors can see the data as soon as it is entered, rather than waiting for data to get entered into a back-office system somewhere.”
Dr. Pritchard added, “Unlike late-phase studies where EDC facilitates the capture of data from a large number of dispersed patients, the driver for EDC in early clinical research is capturing data-dense information quickly from a relatively small number of subjects so decisions on dose, safety, and early signs of efficacy, can be made as soon as possible. Employing all available tools that help manage risk is the key to survival in the drug development business. While such data enrichment adds some cost to the early studies, the ability to make better decisions faster ultimately lowers the cost of drug development.”
EDC Alliances
Partnerships with CROs aren’t limited to the sponsor variety. The industry is beginning to see numerous EDC/CRO partnerships using the same key principals leveraged in sponsor/CRO models, including strategic, tactical and preferred provider.
PPD for example has EDC preferred provider relationships in place with Oracle, Phase Forward (now part of Oracle) and Medidata, in addition to working with more than 60 vendors depending on client need. Mr. Wilkinson of PPD noted, “In addition, CROs are working closely with EDC vendors to provide feedback and input into their system design. PPD was one of Oracle’s group of customer advisors, working closely with the company to develop new functionality for Oracle Remote Data Capture Onsite 4.5.3 an on the new 4.6 release. We focused particularly on increasing investigator site performance, simplifying the user interface and eliminating site software installation through a fully Web-based EDC system.”
Additionally, as EDC vendors attempt to make clinical research more real-time, they partner with other vendors. Paula Brown Stafford, executive vice president, Integrated Clinical Services at Quintiles, commented, “I am beginning to see EDC providers ally with safety, IVR and analytics businesses in order to streamline integration and facilitate rapid data sharing. These partnerships will continue to grow as the industry strives to make clinical research more real-time.”
According to Kendle’s Mr. Higginbotham, “We expect to see growth in the number of strategic partnerships and alliances, growth in the number and quality of solutions offered by CROs, and growth in the talent base, thereby catapulting the industry to the next generation of strategic partnering, delivering higher value and efficiencies than ever before.”
Jefferies and Company recently estimated that the overall CRO market will reach $21.7 billion in 2010, increasing to $29.7 billion by 2015. Although the pharma/biopharma industry continues to face many challenges, CROs continue to adapt and evolve in the changing environment. Consolidation, regulatory hurdles, and the down economy have certainly kept CROs on their toes. Looking to the future and anticipating change with the flexibility and adaptability CROs are known for, should prove sufficient for continued growth.
Kristin Brooks is associate editor at Contract Pharma. She can be reached at kbrooks@rodpub.com.