Why the CRO Model is Failing

Blog

July 2018

Why the CRO Model is Failing

The clinical trial industry has undergone rapid transformation over the past few years, and many CROs are struggling to keep up. With more than 250,000 trials currently registered on clinicaltrials.gov, the number of clinical trials throughout the U.S. and across the globe has continued to grow exponentially, creating an oversaturated market that has taken a toll on CROs of all sizes.

As the market grows more competitive and the pressure from sponsors to deliver results mounts, it is clear that research organizations must rethink their business model to survive in this dynamic industry. As the clinical trial field continues to evolve, research organizations must look out for these three issues plaguing the current CRO model:

  • Competitive Landscape – Competition among CROs has become increasingly stiff, making it difficult for these organizations to secure high-performing sites, find qualified patients for trials and keep their market share. It is not unusual for multiple (five to seven) or more CROs to be bidding on the same clinical trial opportunity. This creates a situation where price becomes the overriding factor in the CRO selection. This puts the smaller CROs in a vulnerable situation. As a result, research organizations are often forced to either find an untapped niche to specialize in or get acquired by a larger CRO.
  • Inclusion/Exclusion Criteria Dilemma – Finding eligible patients isn’t the only challenge CROs face when recruiting patients – retaining those patients for future studies can be incredibly difficult, as well. Once a patient is excluded from a study, he or she will be less likely to participate in future trials – the result of the “exclusion ripple effect” – reducing the already limited number of qualified patients. Not to mention, there are reports of an increasing trend for patients to send their medications to independent labs to confirm whether they are on drug or placebo. This can result in an abnormal drop-out rate.
  • IRB Issues – Due to the increase in clinical trials, many IRBs wrestle with backlog issues, taking nearly two – three months to complete a thorough review. Additionally, several pharmaceutical companies and CROs have taken to paying independent IRBs to review their products for multiple sites. How will the FDA respond?

While these issues have hindered the CRO industry, there are several approaches CROs can take to differentiate themselves from their competitors and stay one step ahead:

  • Pre-clinical Evaluation Capabilities – A successful CRO’s role in the approval process should start before trials begin. Having a team of chemists, engineers and researchers who can review a new drug or device and compile a thorough market analysis will help companies come up with a comprehensive plan to guide them through trial designs, as well as planning for the product’s entire life cycle.
  • Reimbursement Strategy – When going through the clinical trial planning process, many organizations make the mistake of not taking into account the strategy around reimbursement and the price they are going to seek for their product. Clinical trials need to provide the justification and product advantages to ensure the best possible pricing scenario. These studies need to be directed towards those who ultimately are going to pay for the drug. Therefore, careful consideration must be placed on not just the efficacy and safety, but the economic features of the drug being studied.
  • Team of Regulatory Experts – It is crucial for a CRO to establish itself as a trusted strategic partner for the study sponsors. A good CRO has the ability to build a team of easily accessible experts with first-hand FDA experience, to help the sponsoring organization deal with the complexities of a global regulatory approval strategy.

Finally, it is critical that the entire CRO industry find a way to shift away from this trend of being a commodity service, to one where their sponsoring clients view them as key partners in their clinical trial and regulatory strategies. This development of a partnership mentality can only improve long term results for our entire industry.