A mammoth global pharmaceutical company. Multiple therapeutic areas. The company discovered something curious in one of its Excel spreadsheets.
The spreadsheet had been developed, at considerable expense, by a big accounting firm. The spreadsheet's purpose: to budget and plan a clinical trial. The spreadsheet was emailed around from one colleague to another as the budget was refined. Each colleague added a little data, saved the document, and forwarded it to someone else.
Except a few cells in the spreadsheet became corrupted. Oops. As the decaying spreadsheet was analyzed more closely, it turned out that some of the promised dependencies between different activities and cells had never actually been linked.
It turned out to be impossible to recreate all the different contributions to the spreadsheet by different individuals over time. Then the person who was most familiar with the spreadsheet left the company.
Kelly Larrabee, director of clinical services at ClearTrial, tells that Excel parable. ClearTrial sells web-based software and consulting that allow a more granular, detailed assessment of a clinical trial's cost. "There is an opportunity to improve efficiency," says Larrabee. "That is where we have to go."
She formerly worked at a sponsor company, and at a major contract research organization (CRO). (Here is her LinkedIn profile.) Larrabee understands that some people in the industry may have doubts about whether "efficiency" and "clinical trial" should be used in the same sentence with a straight face. "I can relate to people's frustration," she says.
But there are also companies doing things differently. Larrabee is based in San Diego, and recounts the experience of a large biotech firm in California. When it was acquired by an even bigger European entity, the California folks were some of the biggest proponents of the ClearTrial software.
For Larrabee, one of the key attributes of the company's software is an ability to redistribute power among the diverse members of a clinical trial team. With the ClearTrial system, the cost of a particular aspect of the trial can be so readily seen, so easily seen, that what-if conversations about alternatives become natural and collegial.
The result is that silos and hierarchies that were once sacrosanct are a bit more fluid. Assumptions that are worrisome to one department can be exhaustively reviewed prior to the entire trial running off track. Says Larrabee: "Those risks, of not communicating what the expectations are, can set you up for challenges. You have to operate from the same play book."
The ClearTrial software allows clinical managers, financial managers and operational people to see the key drivers of a trial and talk about them in detail. Scenarios and simulations of alternative approaches take just seconds or minutes to run.
If the screen failure rate in ClearTrial's database seems ill matched with your project, you can override that or any other important variable. "The complexities of the trials we are having makes it a challenge to predict costs," Larrabee says, especially in an industry that is looking for patients in so many countries simultaneously.
The limits of spreadsheets are also of interest to Ken Getz, a senior research fellow at the Tufts Center for the Study of Drug Development. Getz reports that a few sponsors are starting to chip away at the silos that have ensured a certain amount of inefficiency. "We're very impressed with companies like BMS and Pfizer and Shire," says Getz. He says those firms are moving toward a more centralized, coordinated approach to manage their research capacity.
But he also sounds a note of caution. His own research and that of a Tufts colleague, Joseph DiMasi, has shown rising numbers of procedures per trial and general, industry-wide increases in trial complexity. Those forces have been building for years, and had big effects on trial costs, time lines, and investigator frustration.
"The procedural complexity and work burden has continued to rise," says Getz. The sponsor community "is still discussing and trying to understand the problem, and not acting on it," he says.d9A2t49mkex
The good news, Getz says, is that most companies do formally recognize the heterogeneity of their clinical trial teams. It's probably a mixture that is much more complex than that found in other industries. A typical trial may combine a sponsor firm's full time employees, steady contractors, sub-contractors, university scientists and traditional temporary workers, all with varying degrees of general or highly specialized knowledge.
How those disparate types of people should be used and accounted for is becoming a strategic focus at some sponsor firms, Getz says.
What's also changing is a diminished appetite for budget overruns. Getz has been surveying the industry on the question. A clamp down on budget excesses has begun. "Some of them were remarkably aggressive," says Getz. "We saw a few companies that said that they will not tolerate any budget or forecast that is more than eleven percentage points above plan."
Getz says there isn't any consensus about when a research budget variance is deemed excessive. But there does seem to be awareness or discomfort at the most eye-popping situations. "We've heard time and time again of horror stories that came in at twice the budget or 50 percent more than the budget," says Getz. "You hear about these when CROs are involved and there is a lot of out-of-scope activity."
What seems to work best in capacity planning, Getz suggests, is a more comprehensive, company-wide approach. Confining that exercise just to clinical operations or data management may be easy, but bypass key stakeholders who can cause the budget or time line to balloon.
Some companies may not even know what their variances are, Getz suggests, thanks to the scope and complexity of the projects and the numerous ways in which the budgets are tracked. He predicts that will change. Says Getz: "You're going to see more investment and resources thrown at it to make it more sophisticated. We're not at the point where that has happened yet. It's starting."
The sophistication is probably less than what Boeing, say, might bring to its network of suppliers supporting a new jet. "There are wide and inconsistent ways these algorithms are being used, even within the same company," Getz notes. Sponsors can struggle to analyze their own fully loaded internal costs for a project, he says. No spreadsheet can compare those numbers to a bid from a CROs with different (perhaps unspecified) methods for tallying up overhead and indirect expenses.
Getz adds that there are politically delicate dynamics to any exercise in capacity planning. "The centralized group comes out with a report showing a given function is operating below capacity, and the function pushes back," he explains.
One hallmark of the most efficient organizations, he says, is an elevation of the profile of operational data. In the past, the scientific data took precedence over the information about the project. "We've got to marry the scientific objectives to our operational goals," he says. "There's got to be a balance. It doesn't sound like rocket science. But it's a profound shift in the way companies are thinking."
No Change Orders?
Another shift: Getz is also hearing of isolated cases of functional service providers being given solid budgets but no latitude for change orders. The sponsor's message to the CRO can be summarized as: This is what we will pay. You go figure it out.
Getz says that could be a whole new world for the services side of clinical research. Sponsors, he says, "are taking away the whole out-of-scope piece. The CRO has to get smarter about how they structure the contract so that there is still room for variance." Some people call that "unit-based" outsourcing, but the terminology remains in flux.
In some cases, Getz worries, strict policies against change orders could be a recipe for frustration. In other industries, of course, the company paying the bill understands that an outsourcing firm must pick its own processes to achieve necessary efficiencies.
In the drug industry, practices are unfolding differently. The sponsor community wants its cake and wants to eat it, too. It wants low prices and control over standard operating procedures (SOPs).
CROs may attempt to deliver on all of that, but it's not clear if they can attain any efficiencies if strictly adhering to a hundred different customer approaches to monitoring, data management, medical writing and other tasks. Says Getz: "What sponsor companies are really doing is saying, 'We want you to follow our standard operating procedures and the way we tell you, but you've got to do it faster and at a lower cost than we do it ourselves.' "
This is the sixth article in a series. The first article examined sponsor-CRO relationships. The second article covered budgeting at Abbott. The third article reviewed how budgets and schedules can veer off track. The fourth article discussed clinical budgeting at Lundbeck. The fifth story explored the oddities of budgeting from a sponsor perspective.d9A2t49mkex