Clinical Research Organizations; Does Size Matter?
When it comes to Clinical Research Organizations (CRO), size can indeed make a difference! For example, IVD CRO’s tend to be smaller than their pharma counterparts. Does this make them less effective? Simply, no. It is just a function of market size, and lower R&D costs within the laboratory industry.
Smaller, focused, CROs dedicated to laboratory test development understand their field more intimately, move more quickly, and their adaptability allows them to function more effectively in the IVD space than larger CROs. Communication and transparency are also improved with a smaller CRO over that of a larger one.
Smaller, thus more focused, CROs understand that the lab industry has tight profit margins and therefore price accordingly and maintain relationships with the appropriate clinical research sites. Trying to adapt the pharma approach to lab testing will cost more and slow your project’s time to market. Don’t focus on size, focus on skill, flexibility, adaptability, transparency, and ease of collaboration.
Biotech R&D costs are up from approximately $45 billion in 2016 for the development of biomedical products to more than $85 billion dollars in 2022. Even with increased sales though, biotechnology profits have fallen 44%. (1) Why? Covid obviously raised the price of everything. But what else could be happening?
The top 10 CROs last year accounted for roughly $32 billion of that R&D cost. As larger CROs take larger and larger portions of the clinical research market, timelines become longer, products hit the market more slowly, and patient satisfaction and participation in clinical trials decreases. And the cost to develop new biomedical products has skyrocketed. This may not be a direct correlation; however, it is worth exploring. Big business comes with certain safeguards, and guarantees, and there is a common belief that size brings skill, and stability, which has validity. If you can become a $10 billion a year company, clearly that business is doing something right. And if your total revenue was a tenth of that, can that company support a client’s needs?
Large CROs were created to support pharmaceutical development, not laboratory test development. They are required to meet a higher regulatory bar to develop new therapies than sponsors developing IVDs. Their processes slow laboratory test development projects substantially and are unnecessary. And they are expensive. And don’t increase quality of delivery.
Laboratory test development, regulatory document requirements are less, protocols are shorter, patient contact time is less, and follow-up is limited. Potential adverse events are almost nonexistent. But large CROs don’t create their processes with this knowledge. Not to mention they charge per patient fees that are unreasonable. In developing novel laboratory tests, do not assume a big CRO is the right choice. As was stated above, the lab industry is smaller than the pharma industry. Therefore, CROs supporting IVD and CDx development are smaller, with smaller revenues and fewer employees. As a result, these specialized CROs move more quickly and efficiently, cost less, and come with far greater experience. The number of lab test developers is small, and the number of people who can truly bring a new test from bench to lab is limited. Firms dedicated to laboratory testing also maintain critical relationships with Principal Investigators interested in these clinical trials.
When choosing a CRO make sure you are choosing for the right skill sets, not total revenue, as size can and does make a difference!
1. Gibney, M. (2022, July 19). Biotech R&D spending has skyrocketed, and so have opportunities for savings. PharmaVoice. Retrieved January 12, 2023, from https://www.pharmavoice.com/news/biotech-research-development-spending-data-clinical-trials-EY/627513/