16 Journal for Clinical Studies Volume 5 Issue 1

upon the protocol’s site work effort, which is an objective, repeatable third-party’s measure, gives this sponsor secure footing for answering any questions that may arise as to why this study of the same phase, indication and geography will be reimbursed more than typical. There are many other benefits for sponsors, empowered by this information, to anticipate which studies require more or less budget than typical. With access to the study’s site work effort metric, there’s no need to start out with an inappropriate starting point for negotiations and wait for the end result to come to light through multiple rounds of negotiations on the study budget with investigator sites. Rather, sponsors can use the site work effort to refine early estimates up or down as appropriate. When the site work effort is comparatively low or high, sponsors can free up clinical funds for other important research or alert sponsors to request more funding earlier respectively.

If the industry can lower study complexity by including only the procedures absolutely needed and clinically warranted to meet protocol research and safety objectives, this will ultimately reduce clinical study costs. Also for consideration is the impact that reducing unnecessary procedures would have on downstream clinical costs. By reimbursing the sites for the extra and possibly unnecessary procedures, sponsors will pay more for data collection and processing that may not contribute to primary or secondary objectives of the study protocol and will increase the overall cost of the study.

GeographyGeography is another key variable that impacts study budgets and there are certain patterns to be aware of that clearly impact clinical study costs. First, studies conducted in western nations and urban areas are more expensive than in developing nations and rural areas due to the cost of living. As shown in Chart 2, from 2006-2008 to 2009-2011, mean cost per subject in Phase II and III clinical trials decreased by 14% in Asia Pacific.1 In contrast, per subject costs in the United States rose by 23% over the same time period. China has seen the highest increase, 32%. Over half the

There is a direct correlation between a small number of key variables and actual clinical study costs. To control overall study costs, which due to the current economic environment have come under increased scrutiny across the life sciences industry, we must first understand the key drivers and their impact on total study cost. By understanding these variables, sponsors can better budget for and control the costs, reduce overall study risk and increase performance predictability. In our experience working with sponsors across the globe to improve their budgeting processes and in analyzing study designs against final negotiated budgets, the key variables are protocol complexity, geography, phase and indication of the study.

Protocol ComplexityComplexity, also known as the site work effort (SWE), measures the effort required by the site staff to implement the procedures and other tasks that are included in the clinical study protocol. The value provides a quantifiable, repeatable measure of effort required to conduct a study. The complexity or SWE metric measurement was developed by Medidata Solutions with input from Kenneth Getz at the Tufts Center for the Study of Drug Development and the many investigative sites in the Tufts network. The calculation takes the quantity of each trial procedure and clinical research activity conducted per completed patient and multiplies each by a site work effort unit, which is a proprietary mathematical expression of the level of effort and expertise required by site personnel to conduct each procedure and clinical research activity. Analysis of Medidata’s PICAS® database of industry protocols and benchmark clinical costs shows that there is a strong correlation between study complexity and study budget. The case study below illustrates the impact of a highly complex protocol on understanding and determining site budget costs, compared with actual values from studies of the same phase, indication, and geography. Refer to Chart 1, where the oncology breast cancer Phase III study has a site work effort metric of 96.5. The industry benchmark site work effort for oncology breast cancer Phase III is 29.8. The industry benchmark cost levels for the procedures and other costs for this study at the 25th, 50th and 75th quartile levels are $29,332 - $38,402 - $51,833 on a cost per patient (CPP) basis respectively. This translates into a total CPP range of $22M to $39M in this greater than 750 patient study at the industry low to high cost benchmarks. Looking at the range, the amount a sponsor should reimburse depends on the protocol’s complexity compared to the rest of the industry. If the sponsor’s protocol is more complex, meaning higher site work effort, then it is justified and defensible why the reimbursement will also be higher than the 50th percentile. From a compliance perspective in this case, basing this decision to offer a higher budget amount

Benchmark cost data and site work Effort metric data - Oncology, Breast Cancer, Phase III Source: Medidata PICAS® database

Three Key Drivers of Clinical Study Costs

Market Report

Chart 1: Oncology, Breast Cancer, Phase III

Frank J. Cattie, Vice President of Trial Planning Solutions at Medidata Solutions.In this role he interacts with clinical trial sponsors and CROs in the United States, Europe and Japan, helping them optimise their clinical spending and related processes through implementation of

Medidata’s Grants Manager and CRO Contractor industry cost benchmark solutions. Prior to its acquisition by Medidata in 2008, Frank spent six years at Fast Track Systems in Strategic Accounts and, as Vice President of Sales and Marketing, was responsible for global business development and was a member of the executive management team. He began his career with the dental and pediatric pharmaceutical division of Colgate Palmolive and later joined SmithKline Beecham holding positions in product marketing and corporate accounts.Email: fcattie@mdsol.com

selected countries have seen a decrease. Malaysia has seen the sharpest decrease in cost per subject, 33%, and is now the lowest. Hong Kong, Australia, Singapore and India have shown modest decreases: 15%, 14%, 13% and 11% respectively.

Second, major fluctuations in the currency exchange rates can also have direct impact on study costs if the cost is eventually rolled up to a different currency. Third, be mindful of patient population and level of expertise when selecting the regions where the study will be placed. There are a few thousand types of rare diseases, most of which have been identified as having genetic origins. Hence certain countries have patient populations with specific indications and have the expertise in treating these diseases. The key is to find sites in regions where study subjects are available allowing sponsors to reduce per patient cost and meet subject enrollment targets. Assuming study subject and quality investigator site availability, industry budgeting best practices among global clinical sponsors is to select geographic regions where the overall cost of research is lower and the currency is stable.

Phase and IndicationWhen evaluating individual, line item costs, the impact of phase and indication are usually minimal and reflective of time or other study conduct variances. A study’s phase rarely impacts individual, line-item procedure or clinical research activity costs, except where phase or indication is a proxy for increasing or decreasing complexity or time. For example, a blood draw will usually cost the same across different phases. A blood draw does not necessarily increase in time or cost as

process. In earlier phase studies, more is unknown and clinicians often spend more time with interested subjects ensuring proper consent and understanding of risk. As clinical phases progress and more becomes understood about the investigational product and the associated risks, clinicians are able to properly consent potential subjects slightly faster overall. As shown in Chart 3, informed consent is noticeably higher for Phase II compared to Phase III across most regions, reflecting the increased time needed in phase II. At a cost per subject and cost for all subjects at the trial total, the compounded impact of phase and indication are significant. In the aggregate, phase almost always has an impact on total budget cost, taking into consideration the size of the total subject population and overall level of work, which is different across different phases and therapeutic areas. Though a cost per subject in a phase I study may be higher, a large phase III study with a large subject population will still cost more overall. Indication has similar impact on aggregate costs by driving key components of study design. Very ill patient populations or diseases with a longer time required to measure outcomes will inherently require more visits and procedures. Oncology trials usually have higher numbers of procedures and run over longer periods, significantly driving up the study cost compared to other therapeutic areas. Some therapeutic areas and indications warrant more expensive procedures and inpatient treatment, which also drive up the costs significantly. Third party clinical cost and protocol complexity benchmark data is widely used by sponsors to make informed decisions on their clinical site costs in an effort to develop true Fair Market Value site budgets. Not considering these data exposes a clinical study sponsor to risks of generating inaccurate budgets, impeding site agreement negotiations and start-up and potential regulatory investigation. In summary, analysis of benchmark cost and protocol complexity data across ˜30,000 industry protocols from over 100 global sponsors proves that certain key variables have direct and considerable impact on study costs. By understanding and proactively controlling these variables, sponsors can manage the risk and increase predictability of study costs.

the clinical phase of a study changes; the venipuncture procedure itself is largely the same. However, some clinical research activities actually vary in conduct time across phases. A good example is the informed consent

Chart 3: Informed Consent Trends by Phase and Country Regions

Chart 2: Cost per Subject in Asia Pacific

Cost per Subject in Asia Pacific - Mean, Selected Asia Pacific Countries, Phases II & III, All Therapeutic Areas, Industry-Sponsored Pharmaceutical and Biotechnology Studies, 2006-2011 Source: Medidata PICAS® database

Market Report

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