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Some thoughts around the industry continuing to grapple with the high price tag associated with drug development costs.
$375 million. If you were tired of hearing that it costs, on average, $2.6 billion to develop one drug through clinical trials to approval for marketing, then here is your new best statistic from our friends at Tufts Center for the Study of Drug Development (Tufts CSDD). Tufts CSDD and The Avoca Group recently released the results of its
Benchmarks for the Vendor Qualification Process
and Ken Getz, professor and deputy director of Tufts CSDD, shared at the Clinical Trials Europe event in Barcelona last month that $375 million is how much sponsors spend yearly on the request for information (RFI), new vendor qualification, and vendor requalification process for outsourced activities.
$375 million. The Tufts CSDD and Avoca study aims were to “To demonstrate and quantify the volume and types of assessments conducted annually; the time and resource burden that they require; and areas of opportunity to optimize the process.” Predictably, across respondents, the smaller the company, the lower the percentage of resources allocated to the operating approach. For example, the survey found that 43% of small sponsors, those with less than $200 million in annual revenue, had a dedicated team of 3.6 full-time equivalents (FTEs) managing the assessment process. Compare that to the 78% of large pharma, those with at least $2 billion in annual revenue, which had 35.5 FTEs per dedicated team. Also, 100% of large sponsors maintained preferred vendor lists vs. 59% of small sponsors.
Getz shared more results with the attendees, and will be authoring articles on the topic to be published in Applied Clinical Trials in 2020, but one finding really stood out from the rest: when comparing the new vendor assessments to requalification assessments, cycle time differences between those were not significant. Getz noted that requalification is an area for further study, because the hypothesis would be that vendor requalifications should be faster and use fewer resources, which is not the case.
According to Getz, the functional silos of pharma, as well as their fragmentation, contributes to vendor qualification complexity. For example, lab operations may qualify on the breadth of lab assay experience, geographic presence and cross-lab validation, equipment and storage facilities, and scientific experts and leadership. Compare that to IT, which evaluates on computer systems security and disaster recovery, 21 CFR Part 11 compliance, programming validation, and GxP systems management. Then factor in finance procurement, quality assurance, clinops, and clinical pharmacology, and therein lies the complexity. Of the top areas where providers were assessed, the top three were data privacy and protection, quality management systems, and facilities management. The last? Surprisingly, anti-corruption and due diligence.
But $375 million? Getz shared that there are approximately 3,800 active contract service providers. Doing the math, that means each sponsor, large to small, on average, is spending $100,000 per provider, per year to qualify and requalify outsourced providers. Across the board, the report found that 77% of all sponsors assessments conclude with a qualification, 16% require a remediation before qualification, and 6% fail to qualify.
All food for thought as the industry continues to grapple with the high price tag associated with drug development costs.