True story. An unidentified large pharmaceutical company calls up its contract research organization (CRO) with a question: "How many patients are enrolled in our trial?" After a few days of meditative silence, the CRO replied: "Let's have a meeting."

A few days later, five well-dressed CRO executives appear at the sponsor's office. None of them utter the number. Two weeks pass. At last the number is triumphantly announced. By then, no doubt, the actual figure had changed since the first request. And in the meantime, the sponsor had quietly guessed the number by monitoring its own mail room.

No Need To Call

The CRO industry is at a crossroads. Regardless of size or degree of specialization, there are two main strategies. The most popular is the hourly cost-and-materials model. Proponents believe it can survive indefinitely. For such CROs, meeting the needs of exacting clients in clinical development will always be more mission-critical than haggling over which bit of software is used. Being flexible on the project details, in essence, means that CROs have to be flexible on costs, too.

Then there are perhaps a few dozen boutique CROs like Clinipace, which are explicitly touting technological prowess and linking it to a) sharply lower or nearly fixed prices and b) greater visibility into the operational aspects of a trial. This is something new under the sun.

"We are trying to be the opposite of what everybody else has already done," says David Levin, Clinipace's VP of marketing. "We have turned things upside down. Technology is at the bottom. The people are integrated into the technology versus the other way around. We can do it differently."

"The notion we would evolve into a CRO of a different sort was there from the beginning," adds Jeff Williams, CEO of Clinipace. As far as this correspondent knows, the first company to articulate the electronic CRO, or eCRO, strategy was Target Health, in New York City. But there are others, especially in the biometrics arena.

Frozen Out

In Clinipace's case, it has not always been a CRO. The 32-employee firm in Morrisville, North Carolina, started out as a technology vendor supplying electronic data capture (EDC). Says Williams: "We spent the first few years establishing our brand and market presence and our credibility in being able to run and manage trials from a technology perspective."


Clinipace's Jeff Williams

Customers asked Clinipace to provide services outside data management, such as monitoring and biostatistics. In the past, Clinipace might ask another firm to join its bid on those aspects of the project—with occasionally unfortunate results. "We found that we would bring a partner in, they would bid on the whole trial, and we would lose," says Williams.

It's hardly the first report that CROs may elbow EDC vendors out of the loop, of course. Not that Williams is bitter. He's still working with CROs on projects, and understands that the CRO industry was built around charging by the hour. For some firms, it can be controversial or unknown whether a trial running with technology has a lower or higher price tag than a trial recorded on 500,000 sheets of dried tree cellulose.

Targeting Bloat

"They're huge companies," Williams says of the CROs. "They've been very successful. There is a lot of credibility that these firms have built up over time. They do absolutely bring value to their clients. But that doesn't mean there isn't a market segment that doesn't want something different."

The manner in which CROs use technology is perplexing to Williams (and to someone else we know). In most industries, the adoption of software typically lowers costs. In the clinical trial industry, the opposite can occur. "Prices weren't going down," Williams says. "They were going up."

In talking with customers, especially small and mid-sized sponsors and medical device firms, Williams learned that there is simmering emotion, in some quarters, about the business model of the traditional CRO. "There is a lot of bloat in the way deals are priced and invoices are constructed," he says of some competing CROs. "If you talk about bloat, sponsors are in immediate agreement with you. They know exactly what we mean when we talk about getting out the bloat."

Clinical Dashboard

Clinipace has experienced staff, but not the multiple layers of assistant project managers and senior project managers and senior managers of project management. The firm's marketing slogan includes language about using the "right" sized team to handle the trial, but without extra costs.

Says Williams: "That's a difference about living in the technology. It still takes people. But those people are far fewer and used more efficiently." Clinipace tries to use EDC and data management tools so that sponsors can log into a project website to learn a few basic facts about their trials quickly.

In short, Clinipace customers don't have to schedule a meeting or a conference call or restage the Normandy invasion to learn the current patient count or how much of the data is cleaned. "They would have a dashboard they can see at any time," says Williams. "The client may want to review the latest trip reports, may want to review what the monitoring trip visit schedule is. You know what? You don't need to call me to get any of that."

Prix Fix

Greater visibility and higher comfort with technology, in turn, allow Clinipace to offer fixed-price contracts that are appreciated by customers in an era of corset-like budgets. If your trial adds a few sites or changes a few case report forms, you're not going to get a bill from Williams for $50,000. The company only uses its own EDC system. So minor trial amendments are not a financial emergency; they're included in the quoted price on the project.

Basically, Clinipace's small and mid-sized pharma and medical device customers appear to be more sophisticated about containing costs than sponsors in big pharma. "They need to make their dollars last," Williams says of his clients. "They need to do it efficiently. What the client is getting is some certainty around what it is going to cost them. They don't want to be nickled and dimed. If we deliver, we'll get the next study."

Registry Work

In the present economy, Williams concedes the climate for winning business is difficult. "Nobody has been immune from the impact of the market," he says. "We have seen some delays. We have not had any cancellations."

Going forward, he's especially optimistic about the demand for registries, and feels that some technology and service competitors may not appreciate the differences between preregistration trials and post-marketing projects.

"With the REMS legislation and the increased need to understand products in the real world, registries and Phase IV studies are going to be a big area," Williams says. "You don't need the same SOPs. There are lots of things to do differently. We understand the difference and try to leverage that in those conversations."

Here's a previous ClinPage article on the firm.