Today's Mission Critical: Making Sense of Spending on Clinical Trials - Pharmaceutical Executive


Today's Mission Critical: Making Sense of Spending on Clinical Trials

Pharmaceutical Executive

Andrew Grygiel, ClearTrial: One factor that may contribute to the confusion is the failure to incorporate budgetary issues into the development of the trial protocol. What tends to happen is the science drives the drafting, and only after that is completed do we turn to discussing how to budget the work. Clearly, the two need to be connected from the very start.

Getz: Our research showed that while most companies acknowledge budgeting should be an integrated, forward-looking activity, few—less than one out of five—have any capability to track budgeting at each stage of the trial. We are talking to companies about this in more detail and a preliminary conclusion is that the emphasis is figuring how to upgrade and improve the process overall—right now there is no baseline to monitor budget performance. This also shows up in our findings on how companies determine a budget variance threshold for each trial, and whether this figure—usually it's 10 percent—is applicable in terms of adherence. We found the variance is subject to constant adjustment, which leads us to conclude, again, that if the system itself lacks sophistication, then the metrics around it are likely to be less than meaningful. Yet the need for accurate budget numbers is more vital than ever.

Looney: What does the study say about why it is so hard to accurately account for expenditures, beyond these basic organizational factors?

Getz: Two things come up here. One is the failure to build the right assumptions into the protocol design; requirements change and the protocol has to be redrawn or adjusted. The other relates to outsourcing activities and decision-making powers to CROs, who tend to get blamed for missed signals around the initial objectives, over-confidence that they can deliver what the trial sponsor wants, or deliberate underbidding to obtain the contract. Regardless of who is to blame, modifications to protocol are proliferating, raising the expense of trials, and ratcheting up the pressure from management to get more control over what is being spent. The growing regulatory requirement for Phase IV post-marketing studies poses a huge burden on companies because of their length, detailed safety profiles, and population size. Such studies have to be done right, from the start.

Looney: Looking beyond the Tufts study, what do those of you representing companies confront in managing your own trial protocols? Are the study conclusions consistent with reality as you see it day-to-day?

Amy Guzman, Biogen Idec: We are grappling with many of the issues highlighted in the research, particularly with managing changes to study budgets. My group is part of clinical operations while much of the budgeting for the company is handled through finance. Their perspective is relatively short term, whereas we often have to plan way forward; some clinical development plans have costs forecasted out to 2025. Our planning process is working toward a more centralized approach, with a better baseline built around hard, quantifiable assumptions. In addition, we are now part of the same unit responsible for the design and execution of study protocols, and the lead for each protocol also has accountability for the budget. This means in practice we will no longer encounter situations where our people worked with the trial physicians and agreed to actions without any idea of what the costs would be. In the latest planning cycle, we made significant strides by being able to present to senior management total program costs and a total budget for each study, from start-up to close out.

The changes are very important due to the fact that Biogen Idec currently has multiple Phase III programs in progress, with only two major drugs presently on the market. The financial pressures on completing this trial work on time, and at an appropriate cost in line with regulatory requirements, are considerable. Our new CEO has instituted a change in which each therapeutic program lead reports directly to him and has P&L responsibility for that program. If there is a need to adjust the program budget against the operating plan, then an offset has to be found or it won't go through. Significantly, however, the trial budget itself remains a line responsibility. So to some degree we are still devolving accountability for trial costs.


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