Is a Clinical Trial a Product or a Service?

September 27, 2016
Michael J. Howley
Applied Clinical Trials

Most people in our poll said it was a service, but others disagreed. Find out more in this follow-up from Michael Howley PA-C, PhD and Associate Clinical Professor, Department of Marketing at the LeBow School of Business at Drexel University.

In a recent ACT ‘What do you think?’ survey, we asked readers if a clinical trial was a product or a service. Only 53% of respondents identified a clinical trial as a service. Other responses included product (7%), neither (20%), or other (20%) with the most common response in the other category being ‘research.’
 
These responses are typical to what I hear at industry discussions and conference. There is a lot of ambivalence within the industry about what the value created by clinical trials – even to the point of knowing whether a clinical trial is a product or service. This ambivalence degrades value creation, productivity, and confusion about how to measure & manage quality.
 
A clinical trial is a service, defined as the application of knowledge and skills to benefit another entity. The value created in a clinical trial is the knowledge about a compound that will advance medicine and the commercialization of that compound. The key characteristic of services are that they are intangible and involve delivery processes. Products are tangible goods manufactured typically in a manufacturing setting. It is much easier to measure and manage the manufacturing process of products. Service processes are much more difficult to measure and manage.
 
This confusion about whether a clinical trial is a service or product also leads to lower-quality clinical trials and billions of dollars wasted on ineffectual quality improvement investments. You must take a different approach to measuring quality in a service as opposed to a product. Yet, the industry often measure trial quality as if it is a product – leading to mismanagement and low-quality trials. The industry has spent billions of dollars trying to improve the quality of trials in the past 15 years without any improvement to show for their effort. The fundamental reason is that the industry still hasn’t figured out if a clinical trial is a service or a product.