Les Rose appreciates the complexity of calculating costs in clinical trials. Principal of PharmaVision Consulting, a small consulting firm, he has been helping to run trials for a few decades, both independently and at his own small contract research organization (CRO). Rose says sponsors have learned to be tolerant of delay, indulgent of budget overruns.

"Lateness is considered normal," he says. Bids from CROs are thought to offer only a hint of the project's final cost. "The sponsors never believe the estimates. In their experience, when they have done this before, there is a cost overrun. It can be 50 percent."

In financial terms, Rose notes, lateness can be good for CROs billing on time and materials. "If things run late, it's good for them," says Rose. "They get paid more. The CRO will bid as low as they can to get the work. Most of the time it is unrealistically low. They have to do better out of change orders than the baseline contract. The change orders are more profitable. Change is good for the CRO. It's not good for the sponsor."

As a result of such frequent variances to budget, he says, even good personal relationships between clinical trial sponsors and CROs can be marred by inter-organizational suspicion. "A lot of the basis of these contracts is in suspicion rather than trust," he says. "That's unfortunate."

No Gain, Much Pain

The complexity of sorting out the change orders can be good for Rose personally. He is hired to run trials and to scrutinize invoices to make sure the sponsor should pay the bill from the CRO. "I spend much of my time simply checking costs," he notes. But Rose doesn't think it's the best way to run research projects.

Citing proprietary data from CMR International, Rose notes a paradox: trials currently run no faster in the 21st century despite a host of sparkling technologies and diligent people using those tools.

Rose understands the increasing complexity of trials, with more locations around the globe, and he is currently supervising a large Phase III project. It is curious, he says, that technology has not helped time lines. "There is no improvement in efficiency," he says bluntly. "Overall, the time is no better. Electronic data capture has made almost no difference."

He's not anti-technology. Yet the interconnections between multiple technologies may be causing delays. Rose is based in the United Kingdom, and says the global economic downturn has not affected much research there.

Still, he expects the health care reform legislation in the U.S., once it takes effect, to squeeze profits of the drug industry around the world. Additional efficiencies will be required, he predicts, both inside and outside the R&D budget. "There is going to be a shift," Rose says. "We're going to have to be more efficient."

Peter Principle

He says one issue is that many clinical trials are run by people with extensive scientific and medical training, but limited project management expertise. "They are not always good managers," he says. "The more you ascend the hierarchy, the less people understand the requirements of clinical trials."

He is heartened, though, about shifts that are already occurring. He notes that an engagement with PPD left him impressed that that big CRO appeared to understand how important project management (PM) is.

PPD, he says, has an internal system that uses some of the principles of critical change project management (CCPM), an advanced PM discipline. Another positive development: A major European sponsor firm that Rose says has made public statements about a transition away from so-called "line" managers and toward bonafide PMs.

Onesies, Twosies

Rose also likes outcomes-based pricing models, a method in which some nitty-gritty details of a project may be left to the discretion of a CRO, but major deliverable items are the focus of the cost discussion. In such arrangements, outsourcing firms have more input into the design of the trial. In one recent case, Rose says the scope of a project changed significantly in midstream, but it still finished on time. With the sponsor, Rose and his team worked to define the key operational aspects of the trial in ways that would not consume additional resources if changes were needed in the middle of the project.

That story points to a central problem in any discussion of clinical efficiency. If most trials are conceived, planned and executed as one-time, never-to-be-repeated assemblages of science, software and organizations, how can anything in the pharmaceutical R&D world be done with genuine efficiency? In some unfortunate ways, clinical trials can resemble avant garde works of performance art, never meant to be repeated.

The key change to make trials efficient, for Rose, involves not just bestowing rhetorical kisses on PM, but elevating it to a respected discipline. There is progress at some companies in the life sciences, he says. They are placing more emphasis on PM.

On the whole, however, Rose believes the pharmaceutical industry has not taken PM seriously as a business discipline, and elevated its practitioners to powerful roles in the organization. "The pharmaceutical industry has been slow to build up the formality that is the norm in other industries," says Rose. "I've yet to work with a company that really exercised the management formality that takes place in other industries."

Power Shift?

Part of the problem is that scientists in white coats, with important educational degrees and professional stature, are in charge. Those individuals may lack the necessary operational skills to bring projects in on time and under budget. Says Rose: "You really need to make the project manager dominant. It is usually the other way round." Which is not to say the industry is standing still. "It's much better than it used to be," he says.

And while some CROs are more astute than sponsors about project management, according to Rose, other CROs may have cultural issues and computer systems that block their ability to see problems arise and resolve them: "They tend to be very inefficient because of enormous bureaucracy. You end up entering data into multiple systems. They have loads and loads of overlapping systems."

Because some sponsors simply don't know what good project management is, Rose notes they may hire supervisory CROs—consultants, essentially—to make sure a particular task is completed. "They call someone else in and duplicate the management that the contractor is already doing," Rose says. "It can be laughable if it were not so tragic."

This is the fifth 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. The fourth article discussed clinical budgeting at Lundbeck. The sixth story covered how contract research organizations and sponsors are trying to work together.