Companies Outsourcing a Lower Percentage of Their Total Clinical Budgets, Says Cutting Edge Information

RESEARCH TRIANGLE PARK, NC--(Marketwire - August 6, 2009) - Outsourcing represents a smaller portion of clinical trial budgets today than it did three years ago, according to a recent study by Cutting Edge Information.

Streamlining Clinical Trials examines pharmaceutical companies' clinical operations and finds that surveyed companies now outsource an average of 46% of their Phase 3 clinical trial budgets. This shows a shift from the company's 2006 study, in which companies reported outsourcing an average of 59% of their Phase 3 budgets.

Clinical operations executives revealed to Cutting Edge Information that a few factors have sparked the trend in outsourcing spending in the current market. For one, many experts assert that outsourcing does not present the cost savings that were once promised. They have taken their argument to conferences and publications.

Although conducting the work in-house is more expensive, according to clinical development executives, many companies simply cannot accept the loss of control when outsourcing certain aspects of trials. Internal groups, such as data management teams, are not satisfied with the risk that their companies take when outsourcing. If poorly managed, trials could derail and cost much more to restart. For example, the average cost to amend a trial protocol even once approaches $500,000, according to Cutting Edge Information's data.

"Companies are making an effort to outsource less -- or, at the very least, to control outsourcing costs -- but pharmaceutical companies still outsource a tremendous amount to CROs and other vendors for trials at all development stages," said Jason Richardson, president and CEO of Cutting Edge Information. "Each therapeutic area presents different challenges and needs. As such, the percentage of clinical development budgets outsourced varies depending on the disease area."

No company is equipped to manage and execute every aspect of clinical trials. Outsourcing is a cost-effective answer to managing many clinical trial operations and maintaining a conservative number of staff to manage vendor relationships. However, companies are now realizing that outsourcing does not automatically make things easier, cheaper, or remove a burden from their plate.

"Companies are being more frugal," said David Richardson, research team leader at Cutting Edge Information. "Keeping things in-house grants easier oversight because of institutional proximity. Instead of spending the time to manage a CRO, companies can focus on ensuring efficient and competent work."

Contact Information: MEDIA CONTACT: Stephanie Swanson Marketing Team Leader 919-433-0212