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Use of state-of-the-art software, combined with benchmarking and active oversight, fills this gap
In an earlier era, when pharma companies mostly managed trials themselves, the ongoing costs of the trial could be tracked, just as manufacturing or marketing costs could be. But in recent years, with more and more of the clinical operations activity managed by contract research organizations (CROs) and other vendors, the priority at the innovator company is to keep to a timetable, get meaningful results, and fulfill FDA approval requirements. Costs, even in an era when pharma companies are paring expenses wherever they can, remain relatively out of control—and it doesn’t have to be that way, says Dyana Boutwell, principal consultant at Halloran Consulting Group (Boston).
The company uses industry-leading clinical trial forecasting and tracking tools, including Oracle's ClearTrial and Halloran's own accrual model, and is offering a combination of leveraging such tools and Halloran’s expertise in clinical trials budgeting, to clients. “Larger sponsor companies, to a greater or lesser degree, have budget analyst resources to manage the financial forecasts and create robust estimates for clinical trial and program costs,” she notes, “but many organizations are mostly dependent on what their vendors (the CROs, generally) tell them” she asserts. “Typically, clinical project managers have to focus on the intense demands of trial external operations to keep things on track; workloads are high and tracking of financials at the necessary level of detail is difficult or even impossible to maintain”. It’s a “big pain point” for many pharma companies.
According to Boutwell, use of cost-management tools helps companies scope out the initial costs of a trial, even at an early stage. Later, as the trial moves from a placeholder in the plan to having a protocol concept in place, —a trial’s budget can be estimated with 3-5% accuracy based on detailed assumptions. And it’s not that CROs are out to rip off their clients; it’s having an internal pulse on trial costs and budget swings is lacking. “One of the key questions is, at what point should a pharma company begin to build an internal staff of clinical-trial financial analysts?” she says. “Some feel the answer will depend on the complexity of the trials that the company is engaged in and the volume of trials being contemplated. When leaders move from bigger companies where these roles were in place to leaner organizations, it's one of the new roles they push for early on - they see the value”. But most companies are in a constant state of catch-up with their trials’ financials, and how well their financial oversight is staffed.
Halloran, which has tripled in size in the past four years (it has a staff of about 50 now), styles itself as a provider of “on-demand expertise to complement development teams and fills gaps in clinical, regulatory, quality, and program management capabilities.” Another recent extension of its services is to act as an integrator of Veeva’s Vault trial-documentation services for clients.