Recent high inflation rates, rising wages, and other costs are pushing the price tag of bringing a drug to market upward; meanwhile, return on investment (ROI) has decreased in recent years, dropping sharply between 2021 and 2022.
For clinical trial teams, managing costs without sacrificing quality or efficiency is more important than ever. The right digital tools can assist clinical trial teams in managing processes and costs.
How Much Will a Clinical Trial Cost? Forecasts for 2024
Projected returns on investment in pharmaceutical innovation are the lowest they’ve been in 13 years, according to Colin Terry and Neil Lesser at Deloitte. Projected returns in 2022 fell to 1.2 percent, a trend that continued through 2023 and is expected to continue into 2024.
The estimated average cost of developing a drug reached $2.284 million in 2022, according to Terry and Lesser — up from $1.986 million in the previous year. At the same time, ROI decreased by 5.6 percent.
“We anticipated a decline in 2022 but this steep drop is greater than what many in the industry expected,” says Pete Lyons, U.S. Life Sciences Sector Leader and Principal at Deloitte.
Several factors indicate these trends will continue into 2024, write Thom Bales, Principal, Health Services Sector Leader at PwC, and fellow authors. PwC’s Health Research Institute predicts a 7.0 percent rise in healthcare costs in 2024, driven by several factors:
- Inflation. Although inflation rates have begun falling, they remain high, and inflation in healthcare is outpacing inflation in other sectors of the economy.
- Staffing shortages. Lack of qualified professionals to fill roles in clinical trials and throughout the healthcare sector places upward pressure on wages, further raising costs — and imperiling clinical trials that cannot hire staff with essential skills.
- Decentralization challenges. The shift to virtual or outpatient care has reduced costs in some areas of healthcare. For clinical trials, however, the need to monitor patients closely even in decentralized settings has reduced the cost-saving impact of these technologies relative to other healthcare settings.
- Delayed trials and utilization resulting from COVID-19. Even four years after the pandemic began, clinical trial teams are still catching up on the work missed during that time.
“For much of the health services sector, 2024 will be a year of sustained economic compression – ‘the big squeeze’,” write Bales and Laura Robinette, Global Engagement Partner, Health Industries Trust Solutions Leader at PwC US.
What Are the Top Costs of Clinical Trials?
Currently, cost estimates for a clinical trial range from $48 million to $225 million, writes Basia Coulter, a Healthcare and Life Sciences Partner at Globant. In a study published in Pharmacology and Therapeutics, Thomas J. Moore and fellow authors estimated the average patient cost in a clinical trial at $41,413.
Several studies point to four areas that offer significant opportunities to reduce clinical trial spending: protocol design, patient recruitment, patient retention, and data management.
Protocol Design
Protocol design offers opportunities to avoid costly future protocol amendments. A study by Kenneth A. Getz et al. found that 57 percent of clinical trial protocols have at least one substantial amendment and about 45 percent of these amendments are avoidable. The median direct costs to implement substantial amendments reached $535,000 for a phase III protocol. Attention to protocol design from the start can help prevent avoidable amendments.
Patient Recruitment and Retention
Patient recruitment and retention can also impose significant costs. Approximately 80 percent of clinical trials fail to meet initial recruitment timelines or retention rates, resulting in lost revenue of up to $8 million per day, write Mette Brøgger-Mikkelsen and fellow authors in a meta-analysis of information on online patient recruitment in clinical trials.
Data Management
Finally, data management imposes significant costs for clinical trial teams. As much as 25 percent of the total clinical trial budget may go to on-site monitoring intended to provide source data verification, write Jeppe Ragnar Andersen et al. in the British Journal of Clinical Pharmacology. The need to deal with data silos and other hurdles can force clinical trial data scientists to spend considerable time assembling and harmonizing data instead of gleaning actionable insights from it.
Choosing the Right Tools to Streamline Clinical Trial Work
Choosing the right digital tools can help clinical trial teams streamline their work and reduce avoidable delays and costs.
In a study of clinical trial challenges and delays, Christine Zahren, Sonia Harvey, and fellow researchers identified four key areas that pose cost challenges for clinical trials:
- Obtaining accurate results from feasibility studies.
- Planning proactively during early phases.
- Selecting optimal recruitment methods.
- Encouraging and maintaining patient involvement.
All four of these challenges can benefit from high-quality data management. Accurate data management during feasibility studies, for example, can help clinical trial teams make more informed choices about which trials to pursue. Insights gleaned from data at this stage can also indicate where challenges may arise during a clinical trial, allowing for more thoughtful, proactive planning and development of trial protocols — reducing the risk of an avoidable protocol change imposing additional costs.
Accurate data management during feasibility studies, for example, can help clinical trial teams make more informed choices about which trials to pursue. Insights gleaned from data at this stage can also indicate where challenges may arise during a clinical trial, allowing for more thoughtful, proactive planning and development of trial protocols — reducing the risk of an avoidable protocol change imposing additional costs.
Choosing optimal recruitment methods and engaging patients has benefits beyond saving money during the trial itself. “A proper recruitment and retention plan incorporating adequate communication between all stakeholders will eventually avoid the delays in drug development and make treatments available to the consumer at an earlier date and at a more affordable price,” write Nayan Chaudhari and fellow authors in a study of clinical trial patient recruitment and retention. When clinical trial teams incorporate effective technologies into recruitment and retention, they provide a solid foundation that can benefit the launch process as well.
Cost management begins with careful attention to feasibility studies, early planning, and proactive recruitment — pivotal phases wherein significant expenses may accrue. A study of the estimated costs of developing new medical devices determined that 85 percent of the average $522 million cost per device accrued during the nonclinical development stage, according to authors Aylin Sertkaya et al.
Anju’s eClinical suite of solutions, including TA Scan, play integral roles in optimizing clinical trial operations and mitigating expenditure.
Anju’s eClinical suite facilitates seamless clinical data management, offering tailored solutions to accommodate your specific trial requirements. By inputting your specific trial data, their solutions within the suite can be used to automate the management process, ensuring efficiency and accuracy.
For comprehensive clinical and commercial data analytics and insights, TA Scan serves as an indispensable tool. Through its capability to gather, aggregate, and analyze data sourced from diverse registries and online repositories, TA Scan provides a wealth of pre-existing data for feasibility assessments, enrollment benchmarking, competitive analysis, and more.
The financial landscape surrounding clinical trials continues to pose challenges. Factors such as inflation, staffing shortages, and logistical delays can all drive up the costs of a clinical trial. However, by leveraging effective tools in collaboration with a technology solution partner like Anju, organizations can streamline clinical trial operations and uphold cost containment measures effectively.
Images used under license by Shutterstock.com.
Authored by Elke Ydens, Associate Director of Business Solutions at Anju’s Data Division
Elke Ydens, Associate Director of Business Solutions at Anju’s Data Division, brings over a decade of life sciences experience and a PhD in Biochemistry and Biotechnology from the University of Antwerp. As a Subject Matter Expert in Data Science, she adeptly addresses customer needs, leveraging her background in neuro-immunology and biochemistry. Elke remains dedicated to professional growth, contributing to industry publications, and staying updated on industry trends, while also finding success in extracurricular pursuits Bee Keeping and coaching. Connect with Elke on LinkedIn to explore her achievements further: https://www.linkedin.com/in/elkeydens