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i3 Takes on PRO Measurement with QualityMetric Deal

Wednesday, April 7, 2010

Ingenix, the parent company of pharmaceutical services company i3, added patient-reported outcomes (PRO) services to its portfolio with the recent acquisition of QualityMetric for an undisclosed amount.

Rhode Island-based QualityMetric develops and maintains PRO surveys to help sponsors assess patients’ health. Founded in 1997, the company’s surveys have been used in thousands of clinical trials and cited in more than 14,000 peer-reviewed articles. Patient-centered outcomes research has become increasingly important to the clinical trial industry. The American Recovery and Reinvestment Act (i.e., the stimulus package signed by President Obama last year) provides $1.1 billion for comparative effectiveness research—research that looks closely at PROs.

i3 had been looking to expand into the PRO space, said i3 group president Brian Kelly, and an acquisition was a quick way to get there.

“When we looked at our service offerings back in the third quarter, there was a gap. We have a fairly well-known position in health economics where we do retrospective studies that look at our existing databases and help pharma companies answer questions. But, as PROs have emerged and have gotten acceptance by the FDA and providers and healthcare payers, the evidence from patients themselves has gained more and more weight as a truer measure of the real-world outcome. We thought in order to remain competitive we needed to address that,” Kelly said.

Under the terms of the deal, QualityMetric’s president and chief operating officer Gus Gardner will lead i3’s PRO division out of QualityMetric’s existing Lincoln, R.I., headquarters. QualityMetric’s 80 employees have joined the new division, named i3 Quality Research, which is a part of i3 Innovus—one of six business units within i3.

Prior to the acquisition, i3 had a working relationship with QualityMetric and was very familiar with the company’s work, Kelly said.

“They are the de facto standard. They have been cited tens of thousands of times in clinical trials. The importance there is not the number, if you will; it’s the cumulative information that’s been collected,” he said. “If you want to measure your drug or your device’s improvement in physical functioning using the [PRO survey] instruments, there’s now a normative database that QualityMetric has that allows you to understand how your cohort performed versus the normal population or different sub-populations. Having this normative database gave the advantage of not just being a PRO company but having an amazing data asset as well.”

The QualityMetric deal is the second acquisition i3 has made this year. In January, the company acquired Canada-based regulatory services company CanReg. That company became a part of i3’s regulatory services group within i3 Research. Although CanReg is part of a different unit, there is a common thread for these two acquisitions, Kelly said.

“I think they fit with what is our stated strategy and that is ‘the company of specialists.’ There are others out there who are going to constantly build a bigger footprint. They want to continue to build mass. We respect our competitors, but we’ve chosen a different strategy. We want to pick out those areas that add substantial value to the development process versus just continuing to scale the traditional clinicaI,” Kelly said.”I think you’ll find that we’ll continue to pursue that strategy of specialization, and the types of firms we’re going to look at are likely to be different than the types of firms that big CROs who have big numbers and big footprint are likely to look at,” Kelly said.

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