Life sciences companies and CROs are adopting cloud-based solutions at an increasingly rapid pace, particularly in the area of clinical and regulated content management solutions, according to data and analysis released by NextDocs.

Over the last five years, deployment of applications via the cloud has rapidly accelerated across most industries. Analysts estimate that companies will spend one-third of their IT budgets on cloud applications and solutions by 2014. However, adoption of strategic solutions delivered via the cloud has, comparatively and historically, lagged in the life sciences industry. According to NextDocs, that is beginning to change.

"We're beginning to see a rapid change in the business and IT strategies of life sciences companies, a notable shift towards adoption of cloud-based clinical solutions," said Matt Walz, chief strategy officer at NextDocs. "Trial Master File (TMF) management is a perfect business example of where sponsors and CROs find it highly beneficial to utilize a common platform in the cloud. This solution ensures greater collaboration and compliance, and it can be more cost-effectively and rapidly delivered via the cloud."

One of the primary drivers of the adoption of cloud-based solutions by life sciences companies is the increasing reliance on outsourcing and CROs in the drug development process. The escalating cost of drug development combined with increasing regulation and patent expirations is slowing the growth of the industry and driving increased outsourcing to CROs. According to a report by NextDocs, The Life Sciences Technology Landscape Report 2014, up to 50% of discovery and development now is occurring "outside the firewall."

Although such outsourcing helps manage drug development costs and can shorten time to market, the sponsor still has an essential interest in ensuring collaboration with the CRO and compliance with FDA regulations. Even minor errors in meeting compliance and audit requirements can be costly and delay drug approval. For example, the cost of a one-day delay in a phase III clinical trial is estimated at between $600,000 up to $8 million.

"Cloud-based clinical document management solutions free life sciences companies from managing paperwork and processes, and enable them to focus on managing trials," said Walz.  "When CROs and life sciences companies operate on the same platform, it greatly enhances collaboration and eases the management and compliance burden."

NextDocs surveys revealed more than half of the life sciences and pharmaceutical industry is still largely managing clinical documents manually or in hybrid systems, but that reality is rapidly changing. A quarter of life sciences companies have adopted clinical document management or electronic Trial Master Files (eTMF) over the past three years.

And companies are increasingly choosing to implement these systems via the cloud. More than 30% of NextDocs' 100+ life sciences customers are deployed via the cloud, and that number is expected to increase to more than 50% within the next year. In fact, more than 50% of the new customers the company signed in 2013 are being deployed in the cloud.

According to IT analysts and business consultants, the benefits of deploying solutions via the cloud include reduced costs, economies of scale, rapid deployment, flexibility and scalability.  From an IT perspective, security and privacy are commonly cited as top concerns, with regulatory compliance being an added concern in the life sciences industry. More than half of IT decision makers labeled security and compliance as their top concern in a VMware study.

"The primary concern for life sciences companies is trusting their cloud services are secure and meet applicable privacy and compliance requirements. Ironically, only about one in five life sciences companies have IT security programs in place that are formally managed, audited and enforced, whereas, solution providers like NextDocs have these programs in place by default, including SSAE 16 and ISO compliance certifications," said Walz.

Adoption of cloud solutions also is increasingly being driven by business need, as opposed to IT priorities. More than half of currently deployed cloud solutions are designed to "advance business priorities" as compared to 36% that address IT priorities, according to the research firm GigaOM. In life sciences, this translates as a focus on solutions to improve quality, reduce clinical trial costs and improve collaboration with partners.