By Jeffrey S. Handen, Ph.D., and Daniel W. Patrick, TayganPoint Consulting Group
The number of clinical trials worldwide is increasing around 10 to 12 percent per year.1 R&D spending (of which direct clinical development spend generally accounts for about two-thirds) has been increasing at a compounded annual growth rate of 1.76 percent over the past decade.2
While many new innovations continue to be brought to market, the overall productivity of the biopharmaceutical industry has remained relatively stagnant. From 2007 to 2016, new molecule entity (NME) and biologic license application (BLA) approvals have had some outstanding years but show little upward trend.3 The disconnect between increased investment/activity and output points to continuing significant challenges in the global clinical trials market. Here we examine three of the leading issues facing the biopharmaceutical industry today.
Outsourcing And Externalization
One of the trends driving both opportunities and challenges is the increased use of outsourcing. By 2020 it is estimated almost 75 percent of all clinical trials will be run by CROs.4 While preferred providers are commonplace in both full-service and functional service provider (FSP) outsourcing models, the sponsor-CRO relationship remains a transactional one. True risk and reward sharing has eluded the sponsor-CRO relationship in biopharma. Best practices leveraged from other industries can be brought to bear to create win-win relationships for both the sponsor and the CRO. These include:
A corollary to outsourcing is the increase in partnering (i.e., the externalization of research). Licensing activities among the top 15 pharma companies comprised approximately 37 deals per company in 2016 alone, across all stages of development, with a mean total deal value of $250 million.5 Long gone are the days of value created within the four walls of a pharma company. Conversely, many biotech companies are looking to pharma to commercialize their products and wholly pick up clinical development, particularly post-Phase 2b. The idea of Big Pharma becoming clinical development, manufacturing, and sales organizations is rapidly becoming a reality as the “R” in R&D is increasingly being sourced outside the four walls of pharma. This brings the need for new core competencies on both sides of the fence.
Depending on the size of a company, available cash, and size/scope of the global trial, there are many potential routes to finance a trial. The first step is ensuring, from an overall project portfolio perspective, that the trial is indeed worth pursuing. Conducting an R&D portfolio review with in-depth discussions between senior management, the project team, and key opinion leaders, will vet the value drivers of the study and affirm the necessity of conducting the trial at this time.
Options include funding the study internally, partnering with a third party to reduce cost and/or gain access to expertise, and raising capital to fund the trial. Below are the pros and cons of each approach.
Phase 3 industry-sponsored trials completing enrollment between 2013 and 2017, n=3,723, had an average Phase 3 enrollment of 622 subjects per trial.6 It is not uncommon for studies across a wide range of therapeutic areas to have thousands of subjects, and increasingly we are seeing mega-trials with tens of thousands of subjects. In this cohort alone, 124 studies had enrollments above 2,000, and 28 studies had enrollments of more than 10,000.
The need and challenge to recruit and retain these numbers of patients is not new to the industry. Forty-eight percent of sites miss their enrollment targets7 and 80 percent of trials are delayed due to recruitment.8 Additionally, while the dropout rate of clinical trials has historically hovered around 30 percent, the effects of noncompliance are, by nature, impossible to quantify, and they add a potentially significant confounding factor. Clinical trial adherence rates have been reported to average from 43 to 78 percent among trials addressing chronic conditions.9
But there are new opportunities to achieve recruitment goals while also minimizing dropout. These tools allow for better focus on patient experience and, ultimately, better trials.
While the need for growth in global clinical trials continues, and many unmet medical needs remain, these challenges (along with others, such as how to integrate new technologies, increasing regulatory burdens, adapting to new trial complexities, need for better decision making, and increasing probabilities of success) provide opportunities to implement operational innovations that can bring medicines, i.e., scientific and clinical innovation, to patients who need them, more efficiently and effectively.
About The Authors:
Jeffrey S. Handen, Ph.D., is a senior management consultant at TayganPoint Consulting Group and a leader in the firm's Life Sciences R&D Practice. He has published in multiple peer-reviewed and business journals, presented at numerous industry conferences and scientific meetings as an invited speaker, served as past editor in chief of the Industrialization of Drug Discovery compendium, and currently serves as the editor in chief of Re-inventing Clinical Development. Handen has over 20 years’ experience in pharmaceutical and biotechnology R&D, process re-engineering, and systems and process implementation. He is responsible for overseeing business process improvement and solution architecting for optimizing both clinical development and discovery.
Daniel Patrick is a principal consultant at TayganPoint Consulting Group and has more than 25 years of experience in the life sciences and financial services industries. His areas of expertise include program and project management, merger and acquisition planning and integration, business process re-engineering, R&D, and strategy development and implementation. He spent over 20 years of his career at Merck, holding positions in Financial Evaluation and Analysis, Divisional Financial Services, Treasury, Johnson and Johnson/Merck Joint Venture, Corporate Operational Excellence, and R&D. Patrick led the Strategy Realization Office for Merck's R&D division and the division’s integration team for the Merck/Schering-Plough merger. He later served as executive director of Global Financial Planning and Analysis at Celgene.