SOURCE: Cutting Edge Information

Cutting Edge Information

August 31, 2009 09:37 ET

Clinical Outsourcing Costs Challenge Drug Companies, Says Cutting Edge Information

RESEARCH TRIANGLE PARK, NC--(Marketwire - August 31, 2009) - In the drug industry, clinical trials carry price tags that run well into the tens of millions of dollars. Managing such costs demands a sure hand, and trial sponsors go to great lengths to monitor and manage funds allocated to vendors.

Outsourcing is a key part of drug development. The Association of Clinical Research Organizations (ACRO) reports that industry analysts expect biopharmaceutical companies to outsource 35% of their trials over the next five years -- up from a quarter of trials today. Demand for vendor services will grow, they predict, at a rate of 15% annually.

Trial monitors and managers are the most commonly outsourced positions, according to Cutting Edge Information, publishers of "Strategic Clinical Sourcing: Managing Costs and CROs." Depending on need, trial sponsors will outsource other roles, such as biostatistics analysis, medical writing, and even senior-level management of clinical tasks.

Outsourcing offers sponsors an opportunity to define and manage clinical costs very closely. Thanks to clinical research organizations (CROs), sponsors may pursue drug development without maintaining expensive infrastructure or in-house specializations. On the other hand, poor planning or execution can lead to cost overruns that strip outsourcing of its financial benefits.

"Clinical planners determine what can be done in-house and what should be outsourced," said Jason Richardson, president of Cutting Edge Information. "Then the challenge becomes managing trial progress and associated costs."

Outsourcing budgets accommodate fees for different study roles and tasks. According to survey data, trial managers and monitors average $154 and $113 per hour, respectively. Other positions fall between $100 and $200 per unit hour, with some specialized roles reaching higher levels.

Outsourcing contracts can be straightforward or complicated, depending on sponsor needs.

"Clinical outsourcing means different things to different companies," Richardson said. "Some companies use outsourcing as a last resort, others as a major cog in the gears of development."

No matter what, managing clinical costs remains an issue for all of them.

The report, "Strategic Clinical Sourcing: Managing Costs and CROs," ( discusses the benefits and drawbacks of clinical outsourcing. It examines costs and trends while providing strategies for addressing common obstacles in CRO selection and management. It also shows trial sponsors how to formulate a proactive outsourcing strategy, establish criteria for selecting a vendor, and manage day-to-day CRO relationships.

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