Contract research on the rise

The global economic crisis has got most businesses pinching pennies just to stay afloat, and the drug development industry is no exception. But at least one area of the biotechnology sector -- contract research organizations (CROs) -- is on the rise. Image: Wikimedia commons, Centers for Disease Control and Prevention's Public Health Image LibraryCROs first showed up in the biotech industry in the late 1970s and quickly took on a significant role in research and development (R&D), eventually ex

By | August 5, 2009

The global economic crisis has got most businesses pinching pennies just to stay afloat, and the drug development industry is no exception. But at least one area of the biotechnology sector -- contract research organizations (CROs) -- is on the rise.
Image: Wikimedia commons, Centers for
Disease Control and Prevention's
Public Health Image Library
CROs first showed up in the biotech industry in the late 1970s and quickly took on a significant role in research and development (R&D), eventually expanding from drug discovery and preclinical work to clinical trials, drug manufacturing, and even marketing. According to a 2005 Thomson CenterWatch survey, the $15 billion CRO industry was growing at a rate of 12% each year, but data from the past two years show a substantially higher annual growth rate of nearly 17%. In 2007, of the approximately $60 billion biotech and pharmaceutical companies spent on drug development, $15 billion (25%) was outsourced. Last year, despite the economic recession, the CRO market grew to nearly $20 billion -- 29% of the $74 billion drug development budget. The number and depth of the connections between CROs and drug developers has grown so much, they now have their own match-making website. Last October, serial biotech entrepreneur linkurl:Jae Chung; started what he expected to be a simple drug development directory. Now, just three months after its late April launch, linkurl:goBalto; boasts more than 7000 companies and consultants, including 2,200 CROs, all of which can be searched and rated by one another. With a couple of hundred companies and consultants adding themselves each week, "we're one of the fastest growing professional networking sites," Chung said. Finding partnerships, which used to take four to six weeks, can now take as little as two days, he claimed. The types of partnerships that CROs make are also changing. While pharmaceutical companies used to contract work on single projects, explained linkurl:Quintiles Transnational Corp.; Executive Vice President Ronald Wooten, they're now outsourcing entire programs. "The CRO really becomes a permanent supplier of certain functions." Indeed, concurred John Watson, the President of Strategic Partnering and Integrated Drug Development Group at linkurl:Covance,; "with all the [recent budgetary] pressure that the larger pharmaceutical companies are under, there's been a shift to more strategic outsourcing" where CROs are no longer mere service providers, but full service collaborators. "In turbulent economic times, clients have a greater need particularly for advisory services," linkurl:Josef von Rickenbach,; Chairman and CEO of linkurl:PAREXEL International,; agreed in an email. Some CROs are even stepping in to help make starting new biotech and pharma projects a safer endeavor -- Quintiles, for example, now co-invests in some projects with their clients so as to reduce the financial risk of any single program. More integrated partnerships can shorten the time it takes to develop new drugs, and at an average of $2 million in lost revenue per day, significantly lower costs as well. Covance, for example, claims that their services can cut the time for preclinical testing by more than half. In addition, such dynamic partnerships serve to keep fixed costs low and "relieve [biotech and pharmaceutical companies] of the burdens and overheads of process management so they can focus on the medical, scientific, and regulatory aspects of drug development," Wooten explained. "It's all about the pharma companies wanting to be more virtual and more variable," Wooten said. For smaller biotech companies, virtuality is nothing new, but the virtual business is certainly becoming more popular during these times of economic budget crunching. linkurl:Zafgen Inc.,; for example, an early phase biotech company focused on developing new therapies for obesity, recently switched to outsourcing 100% of their work, including not just the drug development projects, but human resources, legal, and communication functions as well. This shift involved a staff cut of more than 50%, as well as a move to cheaper office space with no laboratories and the selling of their lab equipment. "We should all be careful about every dime we spend in biotech," said linkurl:Tom Hughes,; the company's president and CEO. Despite the economic motivation for this recent restructuring, Hughes believes in enlisting the help of CROs where possible even in more lucrative times. "It's a great way to get some extra brains on the problem," he said. "There's a wealth of expertise out there that you can tap into that you would never be able to develop yourself." The current CRO boom is not limited to United States. In China, in particular, the market seems to be accelerating even more rapidly. "From the end of 2007 to now, [during] the recession period globally, we do see the growth in China is stronger," said Jenny Zhang, a North America-based business development director for the Chinese company linkurl:Tigermed Consulting Ltd.; In addition to the big, international pharmaceutical companies setting up R&D centers in Asia, China's domestic drug companies are growing as well. In both cases, Zhang said, this growth stems primarily from a cost advantage to doing business in China, both in physician salaries and healthcare costs, as well as what she calls the "patient advantage." In the US, patients -- especially those with health insurance -- are reluctant to participate in clinical trials. "In China," she said, "we have 1.3 billion people, [most of whom] don't have good access to the health care system." Participating in a study is often their best chance for treatment. Both domestically and internationally, the CRO market is rapidly expanding, and while the recent economic depression may have instigated this change, outsourcing in biopharma is increasingly becoming the new way of doing business. Even when the economy bounces back, Wooten doesn't predict a reversal of this trend. If anything, he said, "I see an acceleration of it."
**__Related stories:__***linkurl:Life in a "Rent-a-Lab";
[October 2008]*linkurl:Big Makeover for Big Pharma;
[20th June 2005]*linkurl:Research-For-Hire Companies Proliferate;
[11th December 1995]


Avatar of: Dan Abshear

Dan Abshear

Posts: 8

August 6, 2009

The Atrophy Of Objectivity\n\nIf I were to rate the corruptive tactics performed by big pharmaceutical companies during my intimate experience with them , the frequent and intentional strategy of implementing fabricated and unreliable results of clinical trials performed by others possibly tops the list of corruptive tactics by the pharmaceutical industry that sponsors such trials. \n\nBy this atrophy of the scientific method absent of authenticity that has been known to occur, harm and damage is possibly done to the health of the public. \n \nThe marketing protocol for pharmaceutical clinical trials includes designing the clinical trial protocol and having the ability to oversee this trial. Also, they select targeted investigators and the clinical trial sites. The sponsor runs investigator meetings, as well as select and control contract research organizations (CROs). The sponsor also performs data assessment, as well as completes the clinical trial so it can be published in a journal chosen by the sponsor.\n\nMost would agree that the science of research should be sound and as aseptic as possible- completely free of deliberate and reckless interference. However, it appears, money and increased profits can be a catalyst for disregard for human health with the clinical trial process that is largely unregulated. \n\nThis is particularly a factor on post-marketing studies of various pharmaceutical companies, as some pharmaceutical corporations seem to be deliberately conducting nothing less than seeding trials- with about a 50 percent tax credit for these trial sponsors. Trials that are in fact pointless and void of scientific benefit.\n\nDecades ago, clinical trials were conducted at academic settings that focused on the acquisition of knowledge and the completely objective discoveries of drugs and devices to benefit mankind. Then, in 1980, the Bayh-Dole Act, Public Law 96-517,was created, which allowed for such places with their researchers can profit off of their discoveries that were performed for pharmaceutical companies and others in the past. \n\nFurthermore, such academic institutions were coerced to license patented inventions to those pharmaceutical companies that will then commercialize these discoveries paid for in large part by the taxpayers who funded this research to a degree.\n\nThis resulted in the creation of for-profit research trial sites without any academic affiliation that are called Contract Research Organizations. CROS utilize primarily community patient care clinics whose staff are absent of any research training compared with the former researchers that existed decades ago. \n\nBecause of this structure, the clinical trial investigators of these pharmaceutical sponsored trials are likely novice compared with academic researchers. \n\nThis, of course, happens with intent by the sponsor who can and does control all aspects of the clinical trial protocol at the site locations of a clinical trial that the pharmaceutical company structures and even gives the trial the title they want for their marketing purposes. \n\nThese quite numerous CROS are in fact for- profit, with some CROs making billions of dollars a year, and this market continues to grow. \n\nThe trials conducted at such places again are sponsored by pharmaceutical companies that control and manipulate all aspects of the trial being conducted involving their particular drug chosen to be studied. \n\n Etiology for their deception regarding this manipulation is because the pharmaceutical company that sponsors such a trial is basically creating a marketing tool for this drug of theirs to be studied in this manner. This coercion is done by various methods of deception in subtle and tacit methods. \n\nAs a result, research in this protocol of the sponsor ensures favorable results of the sponsor?s medication that is involved in the clinical trial they clearly own.\n \nThese activities are again believed to be absent of true or applied regulation to any degree, and therefore have the autonomy to create whatever they want to benefit the pharmaceutical sponsor. \n\nThere likely is a collusive relationship between the sites, the CRO, and the sponsor, as this whole system is planned beforehand by the pharmaceutical sponsor of their clinical trial to again be utilized to increase the market share of the drug studied that they promote. \n\nGuest authorship has been known to be aggressively recruited by sponsors by paying a known opinion leader to sign off on the completed clinical trial. The author?s duty includes making noted cognitive contributions to a published clinical trial, as well as revising and drafting the clinical trial.\n\nFurthermore, the pharmaceutical sponsor recruits investigators to be used for this function of what ultimately is a fabricated clinical trial protocol. The trial manuscript and protocol design is prepared by those employed by the drug company sponsor upon specific direction of this sponsor on how this should be prepared. \n \nThe medical program coordinator of a particular sponsored trial is an actual employee of the sponsoring drug company and also may act as the publisher, manuscript version reviewer, and the clinical trial director who works with the drug company?s hired CRO editors whose objectives are to benefit the sponsor. \n\nTypical and ultimate cost of the final manuscript of the trial to the sponsor created by the hired CRO and the recruited ghostwriters exceeds 1000 dollars per page, some have said. \n\nMerck engages in this behavior, which shocked many, as they were always viewed as an ethical pharmaceutical company that always placed patients over profits.\n\nApparently, this is no longer the case. There are other well known and large pharmaceutical corporations that consider this plan of action standard operating procedures to ensure growth of their drugs.\n\nFurther disturbing is that once the creation of the trials is completed, the research paper is often composed with specific directions by the sponsor to writers known again as ghostwriters. These people are usually not identified and acknowledged by the sponsor, and may not be trained in clinical research overall, as they are simply freelance writers. \n\nOne does not need research training or certification in order to perform this function. Rarely do clinical trial ghostwriters question their instructions about their assignment, which is clearly deceptive and undocumented by the pharmaceutical sponsor. Also, these hired mystery writers are known to make about 100 grand a year performing this deception full time. \n\nThis activity removes accountability and authenticity of the fabricated clinical trial even further. The corruptive act is finally completed by the sponsor hiring again a known thought leader as an author to have their name be placed on the trial, while this hired author likely had absolutely no involvement with the trial, or even reviewing the trial is not asked or required by the hired author, others have said. \n\nTo have the trial published, the sponsor has been known to pay an obscure journal, and the sponsor bribes the journal in a few ways, such as the sponsor purchasing from a selected journal thousands of reprints of their study from the journal, for example. \n\nAgain, how often this process is performed is unknown, yet frequent enough to create hundreds of such false writers mentioned earlier and progressively growing research sites to receive the support the pharmaceutical industry. \n\nSo benefits of pharmaceuticals that are studied in such a malicious way potentially can harm patients and their treatment options along with clear safety risks as a result of this process.\n\n The purchased reprints of the fabricated clinical trial are then bought by the sponsor of the study from the medical journal they hired to publish this trial. The reprints are eventually distributed to the sponsor?s sales force to share the content with prescribers, with the sales force completely unaware about this manipulation that has happened with such a trial that benefits the drug they promote for their employer. \n\nAs a bonus, the sponsor may agree to pay the chosen medical journal to advertise their products to be placed in this journal as well.\n\nSuch misconduct discussed so far impedes research and the scientific method with frightening ethical and harmful concerns, as stated previously. If so, our health care treatment options with drugs that are claimed to have benefits that are absent have now become unreliable in large part due to such corruptive situations. Not to mention the absence of objectivity that has been intentionally eliminated with trials produced in this way. \n\nMore now than ever, meds are removed from the market or are given black box warnings due to the damaging effects of drugs approved by the FDA. We as citizens need to dig deep and ask why this is happening.\n\nTransparency and disclosure needs to happen with the pharmaceutical industry for reasons such as this as well as many others, in order to correct what we have historically relied upon for conclusive proof, which is the scientific method. \n\nMore importantly, research should be conducted in a way that the sponsor cannot in any way interfere in such ways described in this article, which would require independent clinical trial sites with no involvement from the maker of the drug studied in a clinical trial.\n\nAnd clearly, regulation has to be enforced not selectively, but in a complete fashion regarding such matters. Public awareness would be a catalyst for this to occur, after initially experiencing a state of total disbelief that such operations actually are conducted by such people, of course. We can no longer be dependent on others for our optimal health.\n\nCommercial sponsors of clinical studies have the potential to manipulate the structure, implementation, and assessment of the clinical trial results to further their monetary interests. \n\nThis, of course, is detrimental for patients because clinical trial results supposed to be based on the best information from clinical trials possibly may be restructured by others, and is done so with deliberate intent and reckless disregard. Pharmaceutical Marketing uses science this way as a host to infect it, and bastardize the scientific method.\n\n Knowledge is power, and is also possibly a lifesaver. \n\n?Ethics and Science need to shake hands.? ??. Richard Cabot\n\nDan Abshear\nAuthor?s note: What has been written was based upon information and belief.\n\nPublished on:\n\n\n\n
Avatar of: anonymous poster

anonymous poster

Posts: 24

August 6, 2009

You seem bitter.
Avatar of: John Lewis

John Lewis

Posts: 2

August 7, 2009

Another aspoect of the CRO value proposition is the ability to conduct global trials, thus shortening the development time for new drugs. You can read more about this topic by accessing the ACRO whitepaper here\n\nThank you.\nJohn Lewis\nVP of Public Affairs\nAssociation of Clinical Research Organizations
Avatar of: Sergio Goldfeld

Sergio Goldfeld

Posts: 1

August 11, 2009

Interesting article. I found it also beneficial for fledging Medical Device/BioMed companies. Although most of those interviewed either serve or work at big pharma, this is applicable also to Start-up companies as well, since they do not have the budgets to finance the learning curve of clinical research, nor the time to spend in trial and error. The fact that, as in the article, they get more brains on-board, is an added value hard to quantify in money terms. \nWe serve the Start-up/VCs/Tech Incubators developing Biotech, Medical Devices and Drug products, by providing CRO services customized to these particular industry' needs and budgets. \nJudging by the amount of work coming our way, I would say that some of these companies are starting to "get it".
Avatar of: anonymous poster

anonymous poster

Posts: 1

August 12, 2009

interested readers want to know

February 16, 2010

I distrust clinical trials for a number of reasons but had not realised the depths to which some pharma companies will plummet in the quest for profit. Thank-you Dan. I would urge you to publish your experiences and wisdom in a major ethics journal.
Avatar of: Dr. Vineet Singh

Dr. Vineet Singh

Posts: 1

December 1, 2010

Hey Dan ! Fantastic article! i am ispired to open a new CRO in India. Having so much of deep knowledge about the field,can you please help me out in setting up of my new venture.hope with your advise and valuable inputs we can together make a difference..\n\n\nBest Regards\nDr. Vineet\n09336120140\n

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