There is one small, nettlesome wrinkle in the way most clinical trials are budgeted. Studies in the same program, therapeutic area or company may not be as similar in cost as senior managers expect. Can one trial's budget be xeroxed and become the starting point for another? "That doesn't always turn out to be the case," sighs Tim Viohl, manager of drug development at Lundbeck.

Viohl is based in Deerfield, Illinois, near Chicago. Lundbeck's headquarters are in Copenhagen, Denmark. With 5,900 employees (430 in the U.S.), it boasts a $600 million annual research budget.

Viohl joined the company as part of the acquisition of Ovation Pharmaceuticals in early 2009. ClinicalTrials.gov shows that Lundbeck has listed 15 actively recruiting Phase III trials, with an average of 342 patients in each. The company is working in Alzheimer's, stroke and other central nervous system (CNS) conditions. This 718-patient alcohol dependence study is being run at 48 European sites and is Lundbeck's largest ongoing Phase III project.

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With many trials, Viohl says, it's nice to have both a detailed grasp of the aspects of the project at hand, as well as a comprehensive knowledge base of quasi-similar trials. Lundbeck is using software from ClearTrial to refine its budgets, and Viohl likes its ability to highlight and adjust the core assumptions in each one.

"We're able to come up with a baseline set of assumptions that may have been guesses in the past," he says. "We can compare those assumptions much more easily now."

Buffer Zones

In the absence of such data, he says, the standard practice is to build in financial and chronological wiggle room. That protects against unforeseen events. Says Viohl: "Without a firm grasp on assumptions, a lot of studies would find themselves artificially buffering both the time line and the overall budget." But with use of the software, the buffering is happening less and less at Lundbeck, he says.

As a philosophical matter, Viohl does not see clinical development costs as inherently unpredictable or unmanageable. Rather, he is incorrigibly optimistic. Despite some uncertainty, he says, the research process is something that can be continuously refined. "Whether or not the areas of efficiency are based on regulatory requirements or internal corporate policies, there is always going to be an area of improvement," Viohl says. "That's not necessarily a bad thing."

Clinical Pivots

Some companies in the industry, he believes, are unable to take action if new resources are needed, or not needed, for a clinical project. The question for senior managers is: How quickly, how intelligently can resources be redirected to the most important areas?

The challenge could well be more complex for pharma and medical device manufacturers than many other complex, capital-intensive industries. In addition to bleeding-edge scientific developments, the life sciences must grapple with specialized outsourcing needs; country-by-country regulatory nuances; changes to formularies and the general standard of medical care; and the go-to market strategies of competing products.

With all that in the picture, Viohl sounds relieved at the ability of the ClearTrial software to aggregate considerable trial- and program-level activity into a few calendar dates and Danish Krone budget numbers that he can examine. "You have the ability to avoid unnecessary, excess allocation," says Viohl. "The more accurate we can get on the front end, the better we are as a company."

While working at Ovation, Viohl especially appreciated the power of the software to build accurate time lines and budgets for pediatric trials—studies in which patient recruitment is notoriously unpredictable.

Lundbeck often simulates slightly different ways of running the same trial, and uses the different scenarios as both tactical and strategic exercises. Says Viohl: "What [the software] allows us to do is run four or five plans right along side each other and say, 'What if we change these options. How will it look?' Those types of analyses are very helpful to management."

Similar Assumptions

Lundbeck has a complex matrix of relationships with outsourcing firms, and the ClearTrial software has been helpful in keeping the sponsor firm and its contract research organizations (CROs) on the same page. Lundbeck sets some of the parameters, and allows CROs to populate other parts of the request for proposal (RFP) forms.

In the future, Lundbeck may explore additional CRO-specific costing features in the software. At that point, once Lundbeck and a CRO had an agreement on standard costs for discrete clinical trial elements, the budgeting for future trials could become much faster, less entangled in contracting hurdles. The dollar-per-task negotiating discussions would have been already settled.

"The tool allows you to build that in so that all proposals with that CRO will be modeled within their agreed rates," Viohl notes. Planning discussions could proceed much more rapidly and efficiently to consider the subtle differences in approach between the CRO and sponsor, or between several CROs.

Deal Checker

In a global industry, the ClearTrial software is helping Lundbeck evaluate which countries to use and which to avoid if the time lines in that country cannot dovetail with the larger schedule of a program as a whole. Says Viohl: "You find yourself looking at it and saying, 'Wow, that is just not doable. We don't have the extra 3-4 months to wait."d9A2t49mkex

The software is so fast and easy to use that it's being deployed in Lundbeck outside pure clinical development, as part of the company's attempt to assess partnering or investing opportunities. Since those opportunities can involve clinical development programs of considerable complexity, the software gives Lundbeck another level of comfort. Those deals can be evaluated in an apples-to-apples manner against existing research programs inside Lundbeck.

Lundbeck has not yet been able to quantify the overall accuracy of the ClearTrial software. But on an anecdotal basis, it appears to be highly predictive of what happens in the real world. That's raising the level of confidence Viohl and his colleagues have in discussing their R&D spend numbers with others at Lundbeck. "More and more confidence is being generated," he says.

This is the fourth installment 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.

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