Time and Cost Reduction in Clinical Trials- Outsourcing and IT to Optimize Patient Recruitment, Logistics, Data and Site Management

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1 Time and Cost Reduction in Clinical Trials- Outsourcing and IT to Optimize Patient Recruitment, Logistics, Data and Site Reference Code: GBIHC088MR Publication Date: June 2011 Biopharmaceutical companies are trying to find ways which can improve the efficiency of clinical trials The Clinical Research Process Clinical Development is one of the most time consuming stages so time efficient methods need to be incorporated Clinical research is critical to the success of biopharmaceutical companies. Within it, the clinical trial is the most time consuming stage of drug development. Therefore, biopharmaceutical companies are focusing on ways to improve their efficiency of the clinical research process in order to maximize gains. This requires considerable investment from biopharmaceutical companies for the conduction of quality clinical trials. Time and Cost Reduction in Clinical Trials, Clinical Research Process, 2010 Drug Discovery Pre-Clinical Development Clinical Development Phase I-III Review & Approval from the Regulatory Agencies Post- Marketing Studies Target Identification Target Validation Lead Identification Lead Optimization Formulation Toxicology Bioanalysis Pharmacology Pharmacokinetics Analytical Testing Preclinical Assessment Pharmacodynamics Pharmacokinetics Safety Clinical Trial and Design Biostatistics Clinical Assessment Clinical Trial Data Patient Recruitment Clinical Laboratory Services Regulatory Guidance and Submission Safety Surveillance Adverse Event Reporting Data Medical Writing Post-Marketing Safety and Surveillance Data Biostatistics 2-10 Years 1-5 Years 5-7 Years 1-2 Years 1-2 Years Source: GBI Research The above figure shows the step-by-step process for a drug to be developed along with the timeline to pass through all the phases of clinical research to reach the patient population. Clinical research is conducted in humans to verify if a new drug or therapy is safe and effective for treating a disease or condition. Clinical trials are conducted in different phases and on average it takes XX to XX years to discover and market one new drug. Pharmaceutical and biotechnology companies spend approximately $900m in bringing each new drug into the market. Page 1

2 1 Table of Contents 1 Table of Contents List of Tables List of Figures Time and Cost Reduction in Clinical Trials- Introduction GBI Research Report Guidance Time and Cost Reduction in Clinical Trials- Clinical Trial Process Introduction The Clinical Research Process Clinical Trial Process and Types of Clinical Trial Outcomes Biomarkers and Surrogate End-points Help in Reducing Time and Cost of Clinical Trials Site Selection and - Facilitates Cost and Time Efficient Clinical Trial Timely Site Initiation is Mandatory for Completion of Clinical Trials on time Site Initiation Process Key Factors for Minimizing Site Initiation Delays Site Organizations (SMOs) - Reduces Study Timeline Effective and Efficient Supply Chain Reduces Time Lag Key Factors for Efficient Supply Chain in Clinical Trials Planning Issues Manufacturing Issues Distribution Issues Visibility Issues e-clinical Trial Solutions in Operational Planning Clinical Trial Supply System (CTSM) Radio Frequency Identification (RFID) Tag Architectures RFID IT Architecture Information Technology Helps in Improving Clinical Trial Introduction Electronic Data Capture (EDC) Cost Saving Scenario in EDC Software as a Service (SaaS) based EDC Case Studies Interactive Voice Response System (IVRS) The IVRS Provides the Real Time Clinical Trials Data Tracking for The Following Case Study epro (Electronic Patient Reported Outcomes) EHR (Electronic Health Record) Clinical Trial System (CTMS) Cost Saving By Predictive Modeling Tool ROI of Predictive Modeling Tools Implementation of Clinical Data Interchange Standards Consortium (CDISC) Standards Reduces Cost of Clinical Trials Various Standards in CDISC Adoption of Various Standards Cost Saving for a Single Study Revenue Gained for a Single Product Outsourcing- Contract Research Organizations (CROs) are Re-defining the Conduct of Clinical Trials Introduction Contract Research Organizations (CROs) Clinical Research Outsourcing is seen as a Solution to Problems such as Rising Costs or Low Productivity Strategic Outsourcing Delivers Greater Value by Understanding the Core Competencies of the Vendor and Outsourcing Companies Key Reasons for Outsourcing to Contract Research Organizations...52 Page 4

3 9.3.1 Desire to Reduce Costs is a Prime Reason for Contract Research Outsourcing CROs are Engaged to Reduce Time to Market in order to Achieve Competitive Edge Outsourcing Resource and Time Intensive Functions such as Data Allows Biopharmaceutical Companies to Focus on Core Competencies Evolving Risk Sharing Agreements Attract Biopharmaceutical Companies to Increase Contract Research Outsourcing CROs are Helping to Improve the Clinical Research Quality through Better Regulatory Understanding and Keeping Pace with Technological Advances Small and Medium Biopharmaceutical Companies can Leverage on the Resources of CROs Biopharmaceutical Companies Benefit from New Technologies that a CRO Has Access to Cost of Clinical Trial is reduced by Outsourcing by a Significant Amount Cost of Conducting Clinical Trials in India is Approximately 55% of the Cost of Conducting a Clinical Trial in the US Contract Research Outsourcing Service Models Contract Research Outsourcing Service Model Criteria for Selecting a CRO Early Stage Drug Development Outsourcing Clinical Stage Drug Development Outsourcing Late Stage Development Outsourcing Profile of Key Companies Dealing in Clinical Trial Processes Paragon Biomedical Overview Exodon Overview D. Anderson & Co Overview KIKA Medical Overview Omnicomm Systems Overview eresearch Technology Overview Prelude Dynamics Overview Clinipace Overview Phase Forward Overview Key M&A Deals and Alliances Perceptive Informatics Overview Key M&A Deals and Alliances DZS/ Clinplus Overview Quintiles Overview Key M&A Deals and Alliances Covance Overview Key M&A Deals and Alliances Pharmaceutical Product Development (PPD) Overview Key M&A Deals and Alliances...72 Page 5

4 10.15 Charles River Laboratories Overview Key M&A Deals and Alliances PAREXEL International Overview Key M&A Deals and Alliances Appendix Market Definitions Abbreviations Research Methodology Coverage Secondary Research Primary Research Expert Panel Validation Contact Us Disclaimer Sources...78 Page 6

5 1.1 List of Tables Table 1: Time and Cost Reduction in Clinical Trials, Factors for Minimizing Time Delays in Site Initiation, Table 2: Time and Cost Reduction in Clinical Trials, Cost of Query Resolution- Comparison of Paper based and EDC based Query Resolution Cost, Table 3: Time and Cost Reduction in Clinical Trials, Cost of Monitoring- Comparison of Paper Based and EDC Based Trial Monitoring, Table 4: Time and Cost Reduction in Clinical Trials, Role of EHR in Clinical Trial Process, Table 5: Time and Cost Reduction in Clinical Trials, Cost Comparison, The US vs. India, ($ 000), Table 6: Time and Cost Reduction in Clinical Trials, Outsourcing Models for Drug Development, Page 7

6 1.2 List of Figures Figure 1: Time and Cost Reduction in Clinical Trials, Clinical Research Process, Figure 2: Time and Cost Reduction in Clinical Trials, Clinical Trial Process, Figure 3: Time and Cost Reduction in Clinical Trials, Types of Clinical Trial Outcome, Figure 4: Time and Cost Reduction in Clinical Trials, Surrogate Endpoint Not Causal Pathway of Disease Process, Figure 5: Time and Cost Reduction in Clinical Trials, Surrogate-Affected by Intervention, Figure 6: Time and Cost Reduction in Clinical Trials, Surrogate - Not in the Pathway of Intervention, Figure 7: Time and Cost Reduction in Clinical Trials, Mode of Action (MoA) of Intervention is Independent of Disease Process, Figure 8: Time and Cost Reduction in Clinical Trials, Site Initiation Process, Figure 9: Time and Cost Reduction in Clinical Trials, Key Factors Responsible for Study Timeline Reduction by SMOs, Figure 10: Time and Cost Reduction in Clinical Trials, Supply Chain in Clinical Trials, Figure 11: Time and Cost Reduction in Clinical Trials, Clinical Trial Supply System, Figure 12: Time and Cost Reduction in Clinical Trials, RFID Technologies in Clinical Trials, Figure 13: Time and Cost Reduction in Clinical Trials, Clinical Trial Data by IT, Figure 14: Time and Cost Reduction in Clinical Trials, Paper CRF Method of Data Capturing, Figure 15: Time and Cost Reduction in Clinical Trials, Electronic Data Capture through e-crf, Figure 16: Time and Cost Reduction in Clinical Trials, EDC System- Cost Saving Scenario, Figure 17: Time and Cost Reduction in Clinical Trials, Data Quality Gap Between Electronic and Paper Based Data Capturing, Figure 18: Time and Cost Reduction in Clinical Trials, SaaS based EDC System, Figure 19: Time and Cost Reduction in Clinical Trials, Use of IVRS in Shipment Request Process for Inventory, Figure 20: Time and Cost Reduction in Clinical Trials, Cost Saved by Using IVRS Reduction in Overages, Figure 21: Time and Cost Reduction in Clinical Trials, Cost of Over-Recruitment by 10% in Different Study Samples, Figure 22: Time and Cost Reduction in Clinical Trials, Cost Saving Scenario of epro Solutions, Figure 23: Time and Cost Reduction in Clinical Trials, Case Study of epro Solutions, Figure 24: Time and Cost Reduction in Clinical Trials, Support of EHR in Clinical Trials, Figure 25: Time and Cost Reduction in Clinical Trials, A Typical Clinical Trial System, Figure 26: Time and Cost Reduction in Clinical Trials, Cost Saving Scenario of a Predictive Modeling Solution, Figure 27: Time and Cost Reduction in Clinical Trials, Adoption % of CDISC Standards, 2004/2005 and Figure 28: Time and Cost Reduction in Clinical Trials, Cost Saving for a Single Study Using CDISC, Figure 29: Time and Cost Reduction in Clinical Trials, Revenue Gained for a Single Product Using CDISC, Figure 30: Time and Cost Reduction in Clinical Trials, Contract Research Outsourcing Reasons for Outsourcing, Figure 31: Time and Cost Reduction in Clinical Trials, Contract Research Outsourcing- Fully Integrated Service Model, Figure 32: Time and Cost Reduction in Clinical Trials, Contract Research Outsourcing- Functional Service Model, Figure 33: Time and Cost Reduction in Clinical Trials, Strategic or Tactical Advantages in Early Stage Drug Development Outsourcing, Figure 34: Time and Cost Reduction in Clinical Trials, Strategic or Tactical Advantages of Outsourcing in Clinical Stage of the Drug Development Process, Figure 35: Time and Cost Reduction in Clinical Trials, Strategic or Tactical Advantages of Outsourcing in Late Stage of the Drug Development Process, Page 8

7 Biopharmaceutical companies need to find ways to reduce time required for drug development so that adequate revenue generation is done 2 Time and Cost Reduction in Clinical Trials- Introduction The biopharmaceutical industry is a research based industry. Drug development is a time consuming and expensive process. There is a need for time and cost reduction in clinical trials. There is increased competition amongst pharmaceutical companies to launch innovative compounds into the market at the earliest opportunity. The sponsors of clinical trials want effective and efficient conduct of clinical trials. There has been an increased regulatory demand for patient safety which needs increased monitoring of clinical trials by the sponsors. This has led to the need for technology in the overall conduct of clinical trials. With the help of web-enabled technology there is improvement in the monitoring of patients and site activity. This helps in quick decision making due to access to the required information. Easy and early access to study data helps sponsors to adjust and plan future studies more accurately. Clinical trials are one of the most critical parts of the drug development process. The various aspects involved in clinical trials such as implementation of technology, efficient supply chain management, proper site selection, patient recruitment, database management and others are important. At present, the rate of new drug approvals is declining by every passing year. Biopharmaceutical companies are under intense pressure to reduce the time required for drug development. It is equally important to cut the costs of drug development so that adequate revenue generation can be maintained by pharmaceutical companies. The patent expiration of major drugs is leading to a reduction in revenue generated by pharmaceutical companies. So these companies need to consider new approaches which will lead to time and cost reduction in clinical trials without affecting their quality. 2.1 GBI Research Report Guidance GBI Research s report, Time and Cost Reduction in Clinical Trials, provides an in-depth analysis of the various strategies adopted for reducing the time and cost involved in clinical trials. The report analyzes the key factors which should be considered in an efficient clinical trial process. It gives a robust view about how the application of technology can lead to time and cost efficient clinical trials. Furthermore, the report provides profiles of the leading companies and analyzes their key deals. This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Research s team of industry experts. The report consists of an executive summary that captures the key takeaways from the report. Chapter 3 provides an understanding of the clinical trial process and its various phases. Chapter 4 provides an overview of site selection and management. Key factors which can lead to reduction in site initiation delays are analyzed. Chapter 5 gives detailed accounts of the use of surrogate endpoints and biomarkers for faster completion of clinical trials. Chapter 6 provides in depth analysis of supply chain management which leads to reduction in time lags in clinical trials. Chapter 7 highlights the impact of the implementation of IT on clinical trial processes. This chapter analyzes the qualitative and quantitative effect of IT on the conduction of clinical trials. epro, EDC, IVRS, CTMS and others facilitate clinical trial conduction. Chapter 8 gives detailed analysis about the reduction in cost of clinical trials by the implementation of CDISC standards. Chapter 9 provides the advantages of outsourcing clinical trials. This chapter also gives insight into the fully integrated and functional service models. In addition,it critically examines the selection criteria for CROs. Chapter 10 gives details about the profiles and important deals of key companies dealing in electronic clinical trials and companies to which clinical trials are outsourced Page 9

8 7.3.2 Case Study Use of IVRS Leads to Reduction in Medication Overage Cost The average cost of clinical supplies to a subject is $XX. This value may vary depending upon the therapeutic segment and duration of the clinical trial. It has been observed that use of IVRS reduces the overage from XX% to XX%. This means that the extra amount of drug in the inventory is reduced and this leads to significant cost reduction. If a sample size of XX subjects is taken into consideration then a cost saving of $XX can be made. Apart from the cost saving due to implementation of IVRS, there are benefits such as automated generation of consignment requests and increased efficiency of logistics system. Figure 20: Time and Cost Reduction in Clinical Trials, Cost Saved by Using IVRS Reduction in Overages, 2010 Cost Savings ($) $XX are Saved in a Sample of XX subjects Sample Size Source: GBI Research, Pharmaceutical Visions Page 37

9 8.1.3 Revenue Gained for a Single Product Figure 29: Time and Cost Reduction in Clinical Trials, Revenue Gained for a Single Product Using CDISC, 2010 Average New Prescription Revenue Gained /Product/Day ($m) Study Startup Study Conduct Analysis Reporting Source: GBI Research, CDISC The study does not include patient population time. The study assumed $XXm average daily prescription sales for a typical drug. The figures are benchmarked based on aggregated data; study-specific costs and time metrics will vary. In the study start-up stage, a company will potentially save $XXm, in the study conduct stage it will save $XXm and in the analysis/reporting stage will save $XXm Page 49

10 11 Appendix 11.1 Market Definitions Clinical Trial: A biomedical or behavioral research study of human subjects designed to answer specific questions about biomedical or behavioral interventions such as drugs, treatments, devices, and new ways of using known drugs, treatments or devices. Biomarker: A biomarker is a characteristic which is measured and evaluated as an indicator of normal biological and pathogenic processes and pharmacological responses to a therapeutic intervention. CRO: Contract research organizations are defined as companies that undertake drug discovery, pre clinical or clinical research related activities on behalf of other pharmaceutical and biotechnology companies for a fee Abbreviations AA - Accelerated Approval ANDA Abbreviated New Drug Application ARRA Recovery and Reinvestment Act CAGR Compounded Annual Growth Rate CDISC Clinical Data Interchange Standard Consortium CDM Clinical Data CDMS Clinical Data System CNS Central Nervous System CRM Customer Relationship CSDD - Center for the Study of Drug Development CSR - Clinical Study Report CTSM Clinical Trial Supply System CVS Cardiovascular System EDC Electronic Data Capture epro Electronic Patient Record Outcomes EU European Union FDA Food and Drug Administration IP Investigation Product IRB Institutional or Independent Review Board IVRS Interactive Voice Response System J&J Johnson & Johnson M&A Mergers & Acquisitions NDA New Drug Application NME New Molecular Entity PDA- Personal Digital Assistant PI Principal Investigator R&D Research and Development RFID Radio Frequency Identification Technology RFP - Request for Proposals Page 75

11 ROI Return on Investment SaaS Software as a Service SMO - Site Organization US United States UK United Kingdom WHO World Health Organization 11.3 Research Methodology GBI Research dedicated Research and Analysis Teams consist of experienced professionals with a pedigree in marketing, market research, consulting background in the medical devices industry and advanced statistical expertise. GBI Research adheres to the Codes of Practice of the Market Research Society ( and the Society of Competitive Intelligence Professionals ( All GBI Research databases are continuously updated and revised. The following research methodology is followed for all databases and reports Coverage The objective of updating GBI Research coverage is to ensure that it represents the most up to date vision of the industry possible. Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources. Company coverage is based on three key factors: Leadership in the key therapeutic areas, leadership in biotech industry, leadership in generic Industry and pure biopharmaceutical players. GBI Research aims to cover all major news events and deals in the pharmaceutical industry, updated on a daily basis. The coverage is further streamlined and strengthened with additional inputs from GBI Research s Expert Panel (see below) Secondary Research Secondary research was carried out on internal and external sources to source qualitative and quantitative information in the report. The secondary research sources that are referred in this report include, but are not limited to: Company Websites, annual reports, financial reports, investor presentations and SEC Filings for the twenty companies covered in this report; Industry trade journals, scientific journals and other technical literature; Relevant patent and regulatory databases; National government documents, statistical databases and market reports; and News articles, press releases and web-casts specific to the companies operating in the market. Page 76

12 Primary Research GBI Research conducts hundreds of primary interviews a year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions: It provides first-hand information on the market size, market trends, growth trends, competitive landscape, future outlook etc; Helps in validating and strengthening the secondary research findings; and Further develops the Analysis Team s expertise and market understanding. Primary research involves correspondence, telephone interviews as well as face-to-face interviews for each market, category, segment and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to: Industry participants: CEOs, VPs, marketing/product managers, market intelligence managers and national sales managers; Hospital stores, laboratories, pharmacies, distributors and Para-medics; Outside experts: investment bankers, valuation experts, research analysts specializing in specific medical equipment markets; and Key opinion leaders: physicians and surgeons specializing in different therapeutic areas corresponding to different kinds of pharmaceutical drugs Expert Panel Validation GBI Research uses a panel of experts to cross verify its databases and forecasts. GBI Research s expert panel comprises marketing managers, product specialists, international sales managers from medical device companies; academics from research universities, KOLs from hospitals, consultants from venture capital funds and distributors/suppliers of medical equipment and supplies. Historic data and forecasts are relayed to GBI Research s Expert Panel for feedback and adjusted in accordance with their feedback Contact Us If you have any queries approximately this report or would like further information, please contact at the below given telephone numbers or address. North America: Europe: and Asia Pacific: info@gbiresearch.com 11.5 Disclaimer All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GBI Research. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that GBI Research delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such GBI Research can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect. Page 77

13 11.6 Sources The following sources were referred to in addition to company reports and websites: Company Websites Product Websites Company Annual Reports Food and Drug Administration World Health Organization Department of Health and Human Services The Pharmaceutical Research and Manufacturers of America European Federation of Pharmaceutical Industries and Associations Prescription Medicines Code of Practice Authority Association of the British Pharmaceutical Industry Royal Pharmaceutical Society of Great Britain Fierce Pharma Financial Times Pharma Marketing News Pharma Times Globocan OECD Page 78