How Are Companies Trying To Manage Clinical Costs?

In August 2019 Clinical Leader Live was proud to feature Bari Kowal, Jonathan Cohen, and Reb Tayyabkhan of Regeneron Pharmaceuticals to discuss Developing a Benchmark Pricing Model for CROs. During the presentation, the team covered several topics, including implementing the model, the effects of company size, why the sudden interest in these models, and the feedback from CROs. In this video, the three executives discuss how companies are attempting to manage the rising costs of conducting a clinical trial.

Click here to see the complete interview.


Ed Miseta: Clinical operations managers face enormous pressure today to keep down development costs. I know you're aware of that and I think everybody listening today is dealing with that as well. What are companies doing to better manage those costs and try to control them?

Bari Kowal: Obviously, benchmarking was the highlight and something we're going to talk a lot about today. But in a more general sense, I think we are looking at our protocol designs with more scrutiny. We are looking at our country footprint and where we operationalize trials. We're looking at conducting aspects of virtual trials. We're also working with site networks, trying to manage site performance and really utilize data more now than ever in technology to really help us conduct the trial.

So, there's a whole host of things going on in the industry that are helping us to evaluate how we go about managing our trials and reducing costs. But ultimately, I think there are a few things that we're doing at Regeneron that Jon and Reb can talk about related to developing our budgets, managing them, sourcing and benchmarking, so I'll turn it over to Jon to make a few comments and Reb, as well.

Jonathan Cohen: We've spent a lot of time over the past two to three years thinking about budget development and how we develop our clinical trial budgets in general. That includes not just costs like investigator grants and CRO fees, but ancillary services as well.

We've put in a whole new process and framework in order to do that, which starts very early in the process, as early as we can, to come up with some cost estimates on what it would take to execute a study in the nascent stages of the planning and try to then work with the teams to ensure that they understand the implications of what they're asking for and think about scenarios and adjustments to the plans and the impact that those would have.

At a very high level, we go through that process and then, once we get near the final protocol or just past the final protocol, depending on the study, we actually have a review meeting with some senior folks, including Reb, Bari and myself and some others, that meet with the teams to actually go through how we're going to operationally execute this study design.

Then, once the study is executed, we actually have just implemented a new budget management approach to ensure that we're managing our budgets properly as well. I don't want to get into budget management because it is a little bit different than the topic today, but one aspect of that is around changes in scope and that is, in essence, just a continuation of budget development.

When you have a change in scope, what is it? What will it take? What's the impact of those changes? How do you determine the cost? How do you develop some scenarios? A big aspect of that, of course, throughout this whole process, is working with our CROs and understanding of the cost of executing those studies at the CROs and at other vendors.

I'll turn it over to Reb a little bit because we've focused on that a great deal. How do we go about conducting the appropriate review and using things like benchmarks to review the costs that come in from the CRO?

Reb Tayyabkhan: From an sourcing perspective, at a macro level, we are also looking at what are the services we're looking to contract for on a regular basis? We are actually always evaluating our models and seeing what we actually need to outsource, either through a functional service provider or a full service CRO versus activities that we want to do internally. There is that activity that we go through to ensure that we really are sourcing for the things we need as opposed to possibly doing things we'd done in league with our external partners.

The other thing that we're doing is we're always looking at what are we actually paying for the services, both from a perspective of the rates for those services as well as the work effort associated the services?  We go through MSA refreshes on a regular basis and, by doing that, we're creating the environment where we're working with our partners to make sure we're paying the right rate and defining the units of work appropriately.

On a regular basis, just because we're looking at functional service providers as an option or full service CROs as options, we're always testing the market. As part of testing the market, we're actually collecting a lot of valuable information that feeds into our benchmarking exercise that we will get into a little bit later today.