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Time to Rethink the Business Model, Exec Warns After ‘Disheartening’ R&D Report

January 7, 2019

A new analysis that finds the soaring costs of clinical trials are eating away at return on R&D investments should serve as a wakeup call to the entire industry, a top executive says.

Clinical trial professionals need to rethink the way they do business, says Jill Johnston, president for site activation solutions at WCG Clinical.

Johnston was reacting to “disheartening” findings from a new Deloitte study that drug companies’ returns on R&D investments have shrunk to 1.9 percent, the lowest since the consulting firm began monitoring research economics in 2010.

“Individual initiatives are not going to do it — it needs to be a series of initiatives closely linked together that build upon each other so that the sum of the parts is greater than the whole concept — creating more value in speed and reduction in costs,” Johnston says.

“Focusing on initiatives across the whole clinical trial lifecycle is not going to do it either — the initiatives need to be focused in one area to start and then built upon in other areas,” she adds.

The Deloitte report cites rising clinical trial costs as the cause of shrinking returns. All in, every successful treatment to reach market costs nearly $2.1 billion — nearly double the costs of a decade ago. Johnston, who worked with Deloitte in a previous analysis, says that clinical trials have become too fragmented to work together properly.

“I think the challenge in the clinical research space is mostly about the lack of appropriate communication between the different specialized areas or across the clinical trial team,” she tells CenterWatch. “Either people think someone else is doing it and they are not, or they simply did not know they needed to do something when they should have — which results in confusion, time delays, and in many cases, re-work.”

It makes sense, then, that smaller drug companies are doing better at getting their R&D investments to pay. Deloitte says that smaller firms attained a 9.3 percent return on their investments in part because they’ve focused on “high-value” assets.

Johnston says that smaller companies have an advantage because they can communicate — sometimes even over-communicating — through the lifecycle of a drug. The silo effect that she sees in bigger drug companies applies to trials professionals, as well, though.

Early in her clinical trials career, she says, “I did many things, from study startup, negotiating contracts and indemnification language, managing SAEs, writing safety narratives and sections for the clinical study report, managing data entry and query process, TFL reviews, forecasting clinical supplies and managing the third-party laboratories.”

That breadth of experience, however, is a thing of the past. “Today, people who start their careers in clinical research are often much more narrowly focused on one small piece of the overall clinical study process [and] often don’t have an appreciation for how it all comes together.”

Read the Deloitte analysis here: https://bit.ly/2QX9BLi. 

 

-By Bill Myers