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27 Apr 2016 White Paper

The Power Of Strategic Sourcing: It’s All About Striking The Right Balance

By Steve Glass, Group Managing Director at Clinigen

Clinigen Clinical Trial Services (CTS) continues with the publication of a series of white papers covering key issues and challenges in the clinical trial services and supplies sector. As trial design and execution become ever-more complex and initiatives to improve efficiency, control costs and maintain quality become paramount Clinigen CTS are perfectly-placed to share our expertise and provide an insiders commentary on trends and challenges.

In this second paper Steve Glass, Group Managing Director, Clinigen CTS, explains how strategic sourcing can lead the way in driving efficiencies in this specialist service, without compromising quality.

Why strategic sourcing is needed

The drug development process is a lengthy, complex and costly one. The research based bio-pharma industry has for some time been focused on improving the efficiency of R&D and improving speed to market of new drugs. Clinical research, is a one of the costliest elements within the drug development pathway, so perhaps not surprisingly has been subject to intense scrutiny (including a focus on improving procurement of expensive comparator drugs). Here we explore initiatives that can be put in place to increase efficiency and control costs in trial supplies without compromising quality or security of supply.
Many aspects of study management are subject to inflationary and competitive cost pressures and these are, to some degree, unavoidable. However, sourcing and distribution of comparator drugs (and associated non-investigational medicinal products or NIMPs) improves when it is strategically managed so needn’t necessarily add to this inflationary trend. Such planned, professional strategic sourcing can deliver significant savings and improve overall trial efficiency.
Cost of comparator agents alone has escalated to regularly exceed $100m per year for top companies, and is predicted to grow further (partly due to the increased use of biologics in comparative effectiveness research - CER). Figure 1, which shows how the number of studies involving biologics has grown in the past 10 years, provides evidence for this trend.

Figure 1 Number of biosimilars trial started each year from 2005-14 (Source Citeline Trialtrove)

Escalating costs are not the only factor leading to a renewed focus on study efficiencies however (see figure 2). All stakeholders involved in trial management are grappling with these push and pull drivers.

Figure 2 Factors which are driving the need for improved efficiency in comparator trail supply

The initial acquisition cost of the drugs used in a study is only half of the equation because large volumes of trial materials are wasted. Furthermore, issues and challenges in the trial supply chain can introduce delay leading to extra resourcing costs and oftentimes longer term negative consequences. For example, our DM research estimated the cost of re-supply (due to issues such as temperature excursions, expiries due to regulatory delay or counterfeiting) at up to $3.2m per study! Better management of the supply process as a whole reduces waste and also accrues savings – in both time and resources, through reduced direct costs plus improved distribution and issue management.

The knock-on negative financial impact that delays can have further along the development pathway (e.g. potential product launch delays) is highlighted in our recent analysis and further explored below. Such ‘opportunity costs’ and secondary impacts are often poorly considered during the development of supply strategies which may, in the current climate, gravitate towards the lowest price of product. In our experience well-planned out strategic sourcing of trial supply reduces both the cost of acquisition and the overall resources required.
Other factors that are driving change in the arena of trial supplies and related services include:

  • Maintenance of environment for supplying material all the way through to geographically dispersed trial sites
  • Growth of Randomisation and Trial Supply Management (RTSM) and Interactive Response Technology (IRT) systems
  • Adaptive trial designs and pre-randomisation allocation
  • The rise of companion diagnostics and biomarker measurement
  • Increasingly sophisticated and more demanding study investigators and centers
  • Shifting patient expectations

As a specialist comparator supplier with global reach and creative vision, Clinigen CTS has worked hard to develop new solutions which serve to mitigate or eliminate the contemporary challenge of study complexity. Working in strategic harmony with our clients we are devising new service offerings, investing in state-of-the-art facilities and nurturing innovative partnerships to realise significant resource, time and financial savings.

These novel and creative solutions have been designed to ensure IMP and NIMP sourcing and supply is integral to driving new efficiencies, reducing wastage and maintaining quality, rather than potentially holding back the advances in trial management demanded in our new reality. Clinigen CTS has been focusing on both sides of the cost and efficiency balance (see figure 2), with initiatives and methodologies designed to improve overall value and study management.

Figure 2 Improvements in cost effectiveness of comparator sourcing can be achieved by driving down
costs and increasing efficiency

What strategic sourcing looks like

In response to the pressures noted and acute demands from customers, clinical study supply organisations are moving fast to develop solutions designed to ensure integrity of supply from source to site. This is why Clinigen CTS, as an established comparator supply specialist, eschews the transactional approach in favour of strategic sourcing practices. This approach requires strategic partnering to ensure clients get a trial supply service which is fit for purpose within the modern clinical trial environment. This means liaising early on in the trial planning process.
Many of the new strategic services developed by Clinigen are geared toward efficient, competitive sourcing and pricing negotiation, thus reducing acquisition costs. An example of this is centralised sourcing which, when combined with established supplier relations, not only saves client team time but also gives economies of scale and purchasing leverage. Others, for example, just-in-time delivery and demand-driven labelling provide benefits in study management and opportunity cost. All of these measures lead to reduced supply returns, fewer drug expirations and thus much drug less wastage. Furthermore, and perhaps crucially, these services have been developed in response to customer needs and in direct collaboration with clients who are operating large, complex (and expensive) study programmes, thus ensuring they deliver exactly what is needed and are in-tune with contemporary issues and pressures.
The unique and specialist services from Clinigen CTS noted in our first white paper exemplify the strategic partnering approach.

  • Technical consultancy and expertise
  • Direct-to-site delivery
  • Demand-Driven Labelling and Distribution (DDLD)
  • Coordinated smart supply

How strategic sourcing and supply accrues efficiencies and savings

In a recent collaboration with Datamonitor Healthcare Consulting the Clinigen CTS team assessed and modelled the impact of strategic sourcing on trial efficiencies compared with more transactional or tactical methodologies. Some of the findings have already been mentioned. The most salient are summarised in Table 1. As can be seen from these data quite startling savings can accrue from taking the strategic sourcing approach – and it should be noted that the assumptions used were deliberately conservative. Cost savings and time savings could, in reality, be far greater than those shown here.
Table 1 Contrasting costs and time delays associated with old transactional methods versus modern strategic sourcing and supply

When taken as a whole the differences shown in Table 1 can easily convert into a total saving of $5-7 million per study –on study-related costs alone! If the longer term impact of the operational delays risked with a transactional system are factored in the lost opportunity cost can run into the 100’s of millions of US dollars. The strategic sourcing and partnering approach that Clinigen CTS takes, gives commissioning companies the peace of mind that they have a true partner with the experience and wherewithal to deliver efficient, secure and compliant material while still managing overall costs.

Partner wisely: partner strategically

At face value many of the cost-saving and efficiency steps and measures explored above may appear to be relatively simple, common-sense ideas. But, as previously noted, these approaches have been developed by Clinigen CTS in close collaboration with pharma and CRO clients and customers thus giving more robust solutions. Solutions and services which are matched directly to contemporary imperatives, unmet needs and environmental pressures.
Furthermore, regulatory compliance simply cannot be compromised in our industry. It is the case therefore that only an experienced, focused, strategic partner agency, with dedicated in-house expertise (e.g. QPs) and specialist facilities (e.g. GMP approved DDLD facilities), can embrace and deliver these new solutions in a way which realises massive savings but does not compromise security or regulatory integrity.
Clinical research is thriving and millions of patients benefit both from investigational drugs and the subsequent new product launches enabled by successful trials. Phase III programmes are also becoming more complex and consequently, costlier. Now more than ever then it is vital that all aspects of trial management are smooth efficient and compliant. By partnering with a strategic sourcing company you can rest assured that these aspects will be taken care of and your studies will run on time and on budget.

About Clinigen (CTS)

Clinigen Clinical Trial Services (CTS) is the global leader in the sourcing, supply and delivery of comparator drugs for clinical research. After the acquisition of Idis, Clinigen CTS now has unrivalled global reach, strategic expertise and capacity to meet any comparator supply challenge. Our comprehensive services ensure all quality, regulatory, security and distribution hurdles are anticipated and overcome to leave our clients free to focus on completing vital clinical studies on time and on budget. You can trust our chain reaction to deliver best-in-class trial supply wherever and whenever you need it.

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