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International Clinical Trials

Pay Attention

Running a clinical study has become more complex and costly than ever before. The average cost of taking a new drug to market is astronomical, with figures ranging from $350 million for a single drug, to over $5 billion for large pharmaceutical companies that work on dozens of projects at once (1). The expense of carrying out trials is a significant contributor to these costs – in fact, Phase 3 now represents about 40% of pharma's total R&D spend, and up to 90% of the costs of developing an individual drug (2).

One factor is that clinical trials themselves have become more elaborate and, consequently, more difficult to manage. Between 2001 and 2011, protocol complexity and the related administrative burden grew considerably. The average number of unique procedures per protocol increased from 20.5 to 30.4, and the number of total procedures per protocol rose from a median of 105.9 to 166.6. Estimates suggest this has upped the workload on investigative sites by over 60% (3).

Global studies have added to the challenges of managing investigators by introducing issues such as language barriers, different regulatory environments and currency exchange – significantly impacting on costs. According to one report, investigator costs account for an average of 48% of the total cost of clinical trials (4), while completing a study on time is also an issue, with 72% running over schedule by more than a month (5).

Cost Control

Although this picture may appear grim, it is also clear that there are opportunities to manage and reduce expenditure. Adjustments to a number of study factors – including site management and selection, as well as the automation of data capture – all hold the potential to reduce costs without compromising scientific validity.

As investigator payments represent a large proportion of costs, evaluating site selection and performance is important in budgeting. Analyses conducted by Pfizer and Lilly in 2011 found that sites that have performed well on one trial are 70% more likely to do so on subsequent studies (6). Therefore, centralising, aggregating and analysing investigator data is vital.

Despite this, payment data that could be used to evaluate cost and performance remains a largely untapped resource. Since many organisations have not yet centralised investigator payments across studies, using this data for evaluation is near impossible. However, if investigator payments are centralised in a single system, they can be aggregated into a source of analytics to help proactively manage and reduce costs throughout a trial.

Central Analytics

To gain insight into the complexity of trial payments, Greenphire worked with a sponsor to determine how many payments it made to investigators during a typical Phase 3 study. Each of the 1,200 patients involved made an average of 14 visits. In this instance, these visits took place at 200 different investigative sites across multiple countries; each site had up to three separate contracts that govern payment milestones. In total, the study included 50,000 payment milestones across 600 contracts. Not only is this number of payments difficult to manage and track, but if this data could be mined, the sponsor could derive important information related to cost drivers and site performance in order to optimise cash flow management and enrolment planning.

Centralising data creates a strategic tool for use throughout the lifecycle of a trial; however, the complexity and volume of data can be overwhelming. Clinical financial analytics are simply a way of collecting and analysing the vast amount of payment data into metrics, reports and usable information to render it actionable and enable better decision-making and proactive management. Accessing this data has many advantages, including predictive cost modelling and the ability to understand the cost impact of country-, study- and site-level contract decisions, as well as forecasting the impact of enrolment activities on costs. Cash flow can be more effectively managed through the ability to project costs and payment exposures, while being able to identify patterns in country- and site-specific performance can inform future planning.

Scenario Planning

When planning a trial, sponsors often use benchmarking tools to establish a budget for investigator- and patient-related costs. By the end of the study, significant variance between budgeted and actual costs are often observed. This can be due to changes in enrolment, contracted rates with individual investigators that differ from what was originally benchmarked, investigator performance, patient retention rates and currency fluctuations. Predicting and managing these issues can ensure a study is completed on time and on budget, and that cost expectations are set appropriately.

The potential for variance presents an opportunity. As the planning and contract negotiation phase of the trial progresses, managers can use scenario-testing tools to understand relevant cost drivers. Scenarios help visualise the dramatic effect of patient enrolment and contract negotiation performance on costs. Scenario A may depict a cost example in which enrolment and negotiation with clinical sites are not carefully managed. As a result, enrolment numbers are slightly above the needs of the study, and site costs are relatively high. In Scenario B, however, enrolment is maximised at the lowest-cost sites, while maintaining distribution across all six locations. In addition, each contract is negotiated and slightly lower rates are obtained for site overhead costs.

Patient-related costs remain constant between the two scenarios. Scenario B is 20% less costly than Scenario A. Assuming that this 20% saving was extended across a trial that includes 200 sites globally and had similar costs, this would save almost $2 million over the study.

Although this example is a simplification of the many potential scenarios, it does show the importance of scenario planning and assumption testing in projecting and managing actual costs. By entering and testing assumptions, trial managers can determine which factors are important, and where to focus oversight efforts.

Linking Budget Data

As contract negotiations begin and site agreements are ultimately executed, there is scope to create better projections of actual costs as the trial unfolds. Linking budget data is therefore necessary to accurately project variances and to set appropriate cost expectations.

An example shows the initial budget accounted for 20 patients in the US for a total of $20,000 in patient costs. During the contract negotiation phase, sites were contracted to enrol 26 subjects, raising the related cost by 34% to $26,800. This increase should raise a red flag that careful oversight of the enrolment process is needed.

Trial managers could use dynamic clinical financial analytics to evaluate when enrolment should be capped. With access to real-time analytics, they can understand when enrolment requirements have been reached in order to contain patient-related costs. Beyond this, the constant refinement of cost projections based on real-time information on the status of enrolment at each site helps to provide continually revised cost estimates that are significantly more accurate than previous budgeted numbers.

Cash Flow Projections

Once the enrolment phase is completed, analytics begin to play a different role. Since contracted rates and patient numbers are likely to remain relatively static, managers are more likely to be looking at cost issues from an operational perspective. This means evaluating whether the trial is on target in terms of costs, and keeping track of cash outflow needs, current liabilities and payments to CROs.

At the outset of a study, a first step in predicting cash outflows involves protocol analysis. By combining financial information with contract logic and protocol information (for example, timing of visits), projections can be made on when cash outflows will be expected. The protocol analysis can then be combined with enrolment projections or actuals, expected drop-out rates and operational visits to generate a full cash flow projection for a study.

When payments are under way, sponsors or CROs can also monitor the amount of payments owed, or the amount of payments paid versus the amount contracted to be paid. This can easily be compared to the current activities completed, so current exposures and potential future liabilities can be identified. Access to this information is also useful for highlighting sites that are slow to create invoices and proactively addressing the problem – ensuring all contracted obligations are met and successful close-down of the study from a financial point of view.

Tracking Performance

Using financial analytics, managers can track performance in terms of speed and accuracy of payments to sites. It is possible to keep careful tabs on how long it takes the typical site to progress between specific milestones. For instance, tracking the average number of business days from the date an invoice is generated to the date the payment is confi rmed gives financial managers insight into the average cycle time for payments to investigators.

This number is particularly relevant because sites continually report cycle time as a business challenge for them in managing clinical trials. In fact, 37% of investigators say that the typical reimbursement from a sponsor takes more than 90 days (7), and 40% of sites see slow payments as a primary operating concern (8). Sponsors and CROs that can improve operational performance when it comes to paying sites are likely to keep them more satisfied.

At trial completion, clinical financial analytics should be used to assess how and why costs ultimately differed from budgets. Because this information can be obtained at the site- and country-specific level on a study-by-study basis, it is invaluable in planning future trials.

Questions relating to enrolment analysis (for example, which sites enrolled the most patients?), site financial performance analysis (how much did each site cost relative to budget?), country performance analysis (were certain countries unexpectedly cost-effective/expensive?) and financial management performance analysis (how well were cash flow needs predicted?) should all be asked at this point. With a full debrief of the issues, sponsors can ensure they understand the cost drivers related to investigator payments in their trials and plan future studies accordingly.

Strategic Direction

Clinical financial analytics are a powerful tool for cost management and performance evaluation in a trial – but to benefit, an organisation needs to take certain steps. The first is to centralise payments; when payment information remains disbursed in various silos, tracking and analysing remains impossible. A single, web-based platform to centralise and automate clinical payments to investigators can overcome these issues. This type of solution allows data to be pulled together from a range of sources. Combining payment data with contextual data like contracted terms, requirements, enrolment data and completed activities and milestones, creates the opportunity for analysis that can inform strategic direction.

The use of these analytics are valuable at different points during a trial, and it is important to gather stakeholders together to evaluate the metrics at various stages – particularly during contract negotiations, patient enrolment and study completion. In addition, analytics show trends and particular cost issues, but it is vital that managers are proactive in addressing any concerns that arise and to handle expectations when cost projections change dramatically.

Incorporating these practices into trial design will help transform the payment management process into a method of aggregating strategic data that optimises trial forecasting, planning, tracking and quantitative assessment. This enhanced analytics functionality offers unique insight into the financial health of clinical studies, and enables sponsors to leverage payment data as a strategic tool – making more effective business decisions, in real-time, that ensure a study is completed on time and on budget.

1. Herper M, The cost of creating a new drug now $5 billion, Pushing big pharma to change, Forbes, 11 August 2013
2. Roy A, Stifling new cures: The true cost of lengthy clinical drug trials, Manhattan Institute for Policy Research, 5 April 2012
3. Getz K et al, Variability in protocol design complexity by phase and therapeutic area, Drug Information Journal 45(4): pp413-420, 2011
4. Klein J, Benchmarking investigator payments, Applied Clinical Trials, December 2012
5. Rosenthal G, Innovative approaches for conducting efficient lower cost pragmatic clinical trials, Institute for Clinical and Translational Science, 31 May 2012
6. Getz K, Predicting successful site performance, Applied Clinical Trials, November 2011
7. CenterWatch survey of global investigative sites, N=257, 2012
8. CenterWatch survey of global investigative sites, N=1,205, 2011

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Kyle Cunningham is Vice President of Product at clinical payment technology provider, Greenphire. With more than 15 years of experience spanning product strategy, development and operations management, Kyle is responsible for ensuring the company remains both innovative and client-focused, responding rapidly to market needs by identifying and understanding clients’ unique business challenges and building state-of-the-art solutions.
Kyle Cunningham
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