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International Clinical Trials

Forward Thinking

Estimating the cost of grants to investigator sites, which represent about 20 per cent of overall R&D costs, is one of the most difficult aspects of planning a clinical trial. How can sponsor companies accurately budget for these grants when engaging new sites, studying a new therapeutic area, or working in a new geography? The results of such contract negotiations can dramatically alter the budget for a study.

Yet it is important to get the numbers right. Aim too low and negotiations with sought-after sites become protracted, additional funding must be approved and trial start-ups are inevitably delayed. Aim too high and resources are tied up that could be allocated elsewhere. With an average grant cost per patient of $14,000 in 2012, variances in either direction amount to substantial sums. And as site costs increase, the need for forecasting accuracy only intensifies.

The solution lies in ‘standing on the shoulders’ of others, using historical performance benchmarks to more accurately forecast investigator costs. Understanding where, and to what degree, budgets are diverging from companies’ actual negotiated cost of contracts with investigators is a good place to begin in improving forecasting accuracy.

Benchmark Analysis

An IMS analysis of the variances between clinical grant forecasts and actual expenses over a four-year period, from 2009 to 2012, sheds further light. The results of this study, presented here, are based on budget and cost data collected from sponsor companies that together undertake more than 75 per cent of the world’s clinical trials.

The information was leveraged from a global database of clinical grant costs. These benchmarks incorporate the forecasted and actual negotiated costs for more than 150,000 grants, as reported by sponsor companies, and the data span clinical trials in 60 countries across 16 therapeutic areas. Per-Patient Costs Not surprisingly, the cost of contracting with sites is generally increasing across all countries, although not at a uniform rate. India remains the country with the lowest grant costs per patient and the US the highest. Indeed, the average grant cost per patient in India is about one-third of that in the US and UK. It is possible that with time, due to inexperience in sites in, for example, Eastern Europe and Asia, the trial planners can bring these new countries and sites up to speed in running future clinical trials. Only Germany saw a reduction in grant costs per patient between 2011 and 2012, whereas those in all other countries have increased. These differences commonly stem from a higher concentration of studies in certain therapeutic categories or of Phase 1 or 3 trials in particular countries.

Key drivers of the cost of clinical trial grants may include the drug class, target indication, geographical location, local regulations and trial set-up. Equally important factors for trials include study centre/investigator fees, site visits, travel costs and patient recruitment. Together, all of these costs account for about 20 per cent of R&D spend. (Although there are additional outlier costs, such as drug importation/labelling and project management, the database on which the analysis is based does not track fees that are not directly involved with clinical trials.)

Regional Variation

There are wide regional differences in the degree to which grant forecasts vary from actual contract costs. While companies were slightly (two per cent) under budget in studies run in Western Europe, they were considerably over budget in Asia and Eastern Europe – 19 and 24 per cent respectively. Forecasts for sites in Latin America and North America track fairly closely to actual costs.

Running clinical trials is a newer practice in Asia and Eastern Europe, with companies having started to outsource to these regions in the mid-1990s and increasing the number of international subjects to this day. Eastern Europe and Asia are particularly attractive locations for active clinical trials due to the abundance of treatment-naïve populations. Companies have less information on which to base their estimates for trials in these countries, and it is not surprising that the variance between the budget and reality is markedly higher than in other markets.

Geographies and Time

Indeed, looking at how forecasting accuracy has changed over time by country shows that it is improving in a few markets, most notably China followed by India and Brazil. The large fluctuations of forecast variance for these three countries can be explained by the fact that sponsors are starting more types of trials in newer therapeutic areas and expanding from simple trials to more complex trials (where the staff may need more training and time than anticipated).

Interestingly, from one timeframe to the next, budgets can swing dramatically between being under and over budget. This suggests that companies are trying to learn from past results via benchmarks, but may be overcompensating in their adjustments when forecasting for future trials.

Therapeutic Categories

While, as would be expected, the average cost of grants is different in each therapeutic category, the difficulty in forecasting those costs also varies by therapeutic area. The delta between the forecast and the negotiated contract costs has been less than five per cent since 2009 in a number of areas: respiratory, digestive, dermatology, blood disorders, cardio, endocrine and metabolic, and central nervous system diseases.

The variance is higher for oncology – 15 per cent over budget – and infectious diseases. These differences can be explained by the fact that companies have accumulated more experience in some therapeutic categories based on the number of trials that have been conducted over time, but also due to the potential complications and complexities of certain trials in diffi cult therapeutic areas.

In oncology, for instance, the analysis found that budget variances are often higher due to unscheduled procedures, or because the more expensive procedures are allocated into invoiced costs. These costs are not included in the forecasted budgets, but are included in the final negotiated budgets. In studies on infectious disease, higher budgets could relate to the fact that there have been newer indications in the past two years that are not understood well. Protocol budgets may not be capturing the full extent of the work needed to budget precisely.

Data-Driven Approach

For the budget to reflect the grant costs that a sponsor can realistically expect, it must – and can – be rooted in costs derived from experience, even when the therapeutic area or geographic region is new to the sponsor. Companies can leverage recent real-world benchmark data collected from their peers to estimate their own costs. Even if the indication within a therapeutic area is completely new or a new country is established for suitable clinical trial sites, suitable analogs may be found to help achieve the desired outcomes.

Overall, benchmarking based on historical, real-world data can help sponsors:
  • Drive studies’ geographic location and/or investigator sites
  • Validate cost forecasts for single or multiple trials
  • Save costs and time, and prevent delays with accurate forecasting
  • Manage the elements that run up costs, including patient recruitment and required patient visits, based on the protocol
  • Understand their cost benchmarks against the industry to identify opportunities for efficiency
No such forecasting system will be perfect as each trial and situation is different, but studying related costs from the experience of others will help considerably. To make best use of benchmark data, the clinical budgeting team must have a good understanding of the protocol specifics. They must have confi dence that they are using the correct cost scales and budgeting sufficiently for imaging, hourly vitals, staff time and facility fees, for example. Budgeting in certain therapeutic areas will be especially difficult, but having a process in place that involves the entire team in identifying cost drivers will tighten the forecast.

Future Forecasts

Sponsors that take advantage of benchmark data on investigator grant costs will have a sound basis on which to build their own cost estimates. In addition, improving the accuracy of grant forecasts will allow them to manage their financial expectations more effectively, minimise recasts of the budget, improve negotiating efficiency and speed trial start-up.

Note: The data in this analysis was gathered from IMS Health GrantPlan

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Linda Drumright is General Manager, Clinical Trial Optimisation Solutions for IMS, and is responsible for delivering optimisation products, services and data to clinical trial sponsors and contract research organisations worldwide. Linda joined IMS in 2012 with the acquisition of DecisionView, where she has served as President and CEO since 2010. Prior to this, she consulted to several venturefunded enterprises. Linda holds a BA in Computer Science from the University of California, Berkeley, and completed the Haas School of Business Executive Program.
Linda Drumright
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