Why Are Benchmark Pricing Models Gaining In Popularity?

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 why this type of pricing model is gaining in popularity.

Click here to see the complete interview.


Ed Miseta: The concept of benchmarking, while it probably seems like it's very new to a lot of people, in reality is not. Bari, you mentioned to me that, ten years ago when you were working with a large CRO, you had clients coming to you and asking about it. But it certainly seems like it is being talked a lot more about now than maybe it was back then. Do you have insight into why you think this is now a more popular concept?

Bari Kowal: I think the industry is evolving and our protocols are actually getting a little more complex. The therapeutic areas we're working in and rare diseases are becoming more popular. Country footprint is expanding and all of that. We do multiple analyses on an ongoing basis to look at what's generating the cost and what are the major drivers of cost.

All those things I mentioned are part and parcel of where our cost drivers are. It's really where we're conducting the studies, the level of complexity of the types of trials we're doing, and even the numbers of patients at sites. In these rare diseases or even in the field of oncology, which many companies are working in, you find that there are less patients per site that are enrolling, the prevalence is lower and/or the ability to find the patients who can finish your trials is lower. All of this drives cost in trials.

I think, as such, many companies are looking at ways to ensure we know what we're asking for, so we know what the assumption should be and how we're going to operationalize and then we know what we're getting. So, I think benchmarking, has been around for ten or 15 years, and back then I was at a CRO and speaking to vendors about unit price trials.

Before, it was more of a dedicated model that you then had to look at, do you benchmark? Are there particular benchmarks? I think it's just evolved over time. It's not something that is new. It's just coming more into popularity because of the need to really look at more efficient ways to conduct trials.

I think, today, a program to get a drug to market is over two billion dollars and, with those costs, there's always a need and discussions, especially here at Regeneron, as to how do we keep costs down, run trials with quality and efficiency and then increase the number of trials we can run?

Reb, do you have any thinking from your side? I worked with you years ago when we were actually working on the potential to benchmark when you were at BMS.

Reb Tayyabkhan: I think all the points you made are really valid and spot on. The one thing I would probably add to this is that keeping the benchmark data current is really important because the overall clinical ecosystem has changed a lot over time. The markets that we used to think were naive aren't naive anymore. There's a lot of new technology out there and a lot of new methodologies, such as RBM for instance.

With all of these things that are evolving, you have to keep it fresh and you need to have more current data. If you're able to have that information, then you can engage with your CRO partners in an objective manner, as opposed to relying on subjective information. That's the one thing I just wanted to add to that.