The Clinical Research Industry: New Options for Medical DeviceManufacturers

An MD&DI January 1997 Feature Article

CLINICAL TRIALS

The number of groups involved in conducting clinical trials is
growing. To make well-informed choices, device manufacturers need to be aware of
them all.

Historically, medical device manufacturers have conducted clinical
trials outside the mainstream of the clinical research industry. Device
manufacturers are small buyers in the clinical research market, and clinical
research sites typically focus on the more lucrative fields of biotechnology,
pharmaceuticals, and basic research. But as FDA places ever more emphasis on
good clinical practices, device manufacturers will find themselves dealing with
this complex industry much more frequently.

There used to be only three players in the clinical research field:
investigators, sponsors, and institutional review boards (IRBs). The
investigators and sponsors worked closely together to produce meaningful data
while IRBs looked over their shoulders and kept things in line. But today,
things are different: contract research organizations, professional investigator
sites, contract IRBs, and even professional subjects are adding a new dimension
to clinical research. To understand the industry, device manufacturers must
become familiar with these various groups and the ways they interact.


INVESTIGATORS

Investigators
are the manufacturers of the clinical research industry. Their product is data,
their raw materials are patients, and their customers are sponsors. Academic
centers such as universities and teaching hospitals are no longer the most
sought-after investigational sites. In fact, in 1993, 57% of clinical studies
were performed by investigators not affiliated with academic centers.1
There are four important reasons for this. First of all, academic centers
require 60–150 days for contract, budget, and IRB approval, compared to 30–60
days for private hospitals and 7–28 days for private-practice physicians;
case report forms from academic centers contain an average of 17% more errors;
trials must be carried out where the patients are, which is in outpatient
clinics; and academic centers are burdened by high overhead and bureaucratic
infighting.



So who's conducting the clinical research? Academic centers list private
clinical research centers as their biggest competitors.1 These are
followed by other medical schools, private-practice physicians, managed-care
organizations, outpatient clinics,
contract research organizations
(CROs),
and VA hospitals (see Figure 1). Sponsoring companies all share the same conflict: marketing departments prefer that clinical studies be conducted by recognized names at recognized
institutions, but clinical research
associates (CRAs)
quickly learn that young, yet-to-be-established
investigators are easier to work with and deliver a more reliable product.

Large, academic centers tend to be chaotic places with dozens of investigators
fighting for their territories within a mazelike bureaucracy. Investigators
within the same institution might not cooperate with each other or refer
patients to one another, so while the institution may be large, the pool of
patients available to any one investigator may be small. The physical structure
of the facility is often not amenable to good research; the investigator's
office may be on one floor, several coordinators may be crowded into a single
office on another floor, subject reception areas may be in another wing,
recordkeeping areas in still another. The physical barriers to efficient work
are formidable. Finally, because the institution is accustomed to receiving
government grant money, it may insist on a surcharge for overhead—so whatever
the study budget negotiated with the investigator, another 25% or more will be
added to the bottom line as institutional overhead.

Less-traditional sites such as private-practice physicians, managed-care
organizations, and outpatient clinics look upon clinical research as another
potential revenue source. Limited in their ability to make money through
traditional health-care delivery, these groups are turning to clinical studies
to increase their revenue streams.1 For two important reasons,
sponsors will do well to consider using such investigators. To begin with, they
view clinical research as an important part of their business, and they aim to
please their sponsor-clients. Second, these sites attract patients. As Americans
move from traditional pay-for-service health care to managed care, patients tend
to receive their care in smaller clinics and hospitals, not in large academic
centers.

Many investigational sites are now incorporating, forming business entities for
the sole purpose of conducting clinical research. They advertise regularly in
professional journals, maintain databases of potential patients, exhibit at
conferences, and telemarket their services. Some very fine clinical research is
performed at these sites. If a study will allow subjects recruited from a known
pool of patients with preexisting conditions, and a particular investigative
site has such a pool of patients, this may be the most efficient and timely path
to obtaining clinical data.

Even contract research organizations are getting into the act. Conceived as
surrogate clinical research departments, CROs first came onto the scene in the
mid-1980s in response to the national trend toward downsizing. Drug companies
divested themselves of monitoring and other clinical research capabilities to
limit headcount, and hired contractors to do this work as needed. One big
problem with this system is that it adds a layer of bureaucracy between the
investigator and the sponsor. Partly in response to this problem, and partly as
a means to expand their own business, some CROs are acquiring, merging with,
partnering with, or otherwise finding ways to work with investigators in order
to present a seamless workplace to the sponsor.2 While the ethics of
having a clinical research center monitor the work done by its
investigator-partner may be questionable, the trend demonstrates the turmoil
present in the industry.

CROs have experienced remarkable growth in recent years. From 1987 to 1992,
revenue for CROs grew at an annual rate of 18%. Today, there are more than 300
CROs in the United States. Five have gone public (ClinTrials Research, Inc., Future
Healthcare, Applied Biosciences International,
Parexel International
Corp.
, and Quintiles), one has gone
bankrupt (Future Healthcare), and one in Europe is ISO 9000 certified (Factory
Medical Consultancy). Big companies have downsized, and small companies don't
have full-fledged clinical departments; these companies turn more and more to
CROs for everything from temporary staffing to full project management.

CROs offer a variety of services. For example, a full-service CRO may design and
write protocols or investigational device exemption (IDE) submissions, recruit
investigational sites, negotiate site budgets, monitor the study, manage the
study, collect and "clean" the data, enter the data in the database,
statistically analyze the data, provide a medical interpretation of the data,
provide regulatory support for 510(k) or premarket approval (PMA) submissions,
and offer temporary staffing, medical writing, technical training, and
consultation services. Most companies don't want all of these services at the
same time, and probably no CRO does all of them well. CROs usually bid on
consulting sessions based on time and materials required; prices vary from $100
to $200 per hour. Contract costs are typically bid on a fixed-unit basis. This
means that a fixed price is assigned to a particular unit of work, and the
number of units is calculated for the total project (see Table I).


SPONSORS

If investigators are the suppliers,
who are the major
industry customers?
Who are the buyers that bring capital into the industry
and hence drive its standards? More important, how big a role does the medical
device industry play? The single largest sponsor of research is the
National Institutes of Health
(see Figure 2). NIH provides grants
to academic and research centers for the support of biologically significant
research and also conducts biological research in its own laboratories. While
not all the dollars are spent on human research (much is spent on preclinical,
animal, and other basic research), all the research is in support of animal or
human health. In 1945, NIH spent approximately $700,000 for biological research,
by 1955 the amount had increased to $36 million, by 1965 it had increased to
$436 million, and by 1995 an astounding $11.3 billion was spent acquiring
biological data in this country.

By contrast, CenterWatch
estimates that the medical device industry spends about $100 million annually on
clinical grants (a clinical grant is defined as the portion of the clinical
research budget paid to an investigator).3 Manufacturers estimate
that they typically spend $1.5 million on grants to test IDE devices, and 342
IDEs were submitted over the past five years. This comes to roughly $500 million
total, or $100 million annually. CenterWatch reported that the
biotechnology industry spent $3.6 billion on research grants in 1995, the
pharmaceutical industry $4.4 billion. Thus, medical device clinical grants make
up about 1% of the total clinical research grant money available. This figure
suggests the degree to which investigators and other suppliers focus their
services and expectations on the requirements of biotechnology, pharmaceuticals,
and basic researchers. Medical device sponsors must learn to adapt these
services and expectations to their own needs.

How many medical device clinical trials are conducted annually? Each year
approximately 80 IDEs are approved, approximately 30 PMAs are approved (all of
which contain at least one clinical trial), and about 500 510(k)s are submitted
with clinical data, so about 600 reportable clinical trials are conducted
annually. An informal survey of six companies suggests that about 1 in 5 studies
is reportable in either a 510(k) or PMA, while 4 in 5 are not used to support
submissions (see Table II). According
to this estimate, about 3000 medical device clinical studies, of sizes and
durations varying from 10 subjects over two weeks to several hundred subjects
over several years, are conducted annually.

Some estimates show that as much as 50% of medical device clinical research
initiated by U.S.-owned companies is now conducted in Europe. There are a number
of reasons for this overseas migration. For example, the establishment of a
single European Union (EU) has created a marketplace that is 30% larger than the
United States, so introducing a product in Europe will give a manufacturer
access to a larger buying group. Also, many U.S. clinical trials were hampered
in 1995 while Medicare, with the assistance of FDA, sorted out the difference
between "experimental" and "investigational" devices and
decided which would be re
ursable. And finally, the introduction of the EU's
medical device directives and clinical research standards is putting the quality
of European clinical trials on a par with those conducted domestically,
resulting in data that are far more likely to be accepted by FDA.


INSTITUTIONAL REVIEW BOARDS, ETHICS BOARDS

Review boards are becoming dynamic players in the clinical research industry,
too. Contract IRBs abound in the United States. They also exhibit at
conferences, advertise, and publish. The reason for their growth lies in the
shift from academic investigational sites to private hospitals and private
practitioners—organizations that typically do not have IRBs of their own.

Contract IRBs aren't inexpensive. Typical reviews can cost $1000–$1500,
with additional charges for multiple-site studies, amendments, and
acknowledgment letters. The good news is that contract IRBs offer faster
turnaround—they might meet weekly rather than monthly—and are more forthcoming
with written notices, minutes, audit results, and membership lists.
Manufacturers should make sure they understand medical device regulations before
going to contract IRBs, however, because many have only dealt with
pharmaceutical trials. In Europe, ethics boards typically require a fee for
service, and manufacturers should be prepared to pay even larger fees than in
the United States.


SUBJECTS

The general population is becoming more aware of clinical research, as
television newscasts report on the latest research discovery each evening.
Subjects are the rate-limiting resource in clinical research. There are numerous
registries where patients looking for a clinical trial to fit their disease or
condition can list their names, addresses, and telephone numbers. One need only
log onto the Internet and search for the disease of concern to find listings of
patients wanting to enroll. Registries are also maintained by professional
societies such as the National Society for
Multiple Sclerosis
or the American Cancer
Society
.

Device studies may recruit from patient pools either actively or passively.
Active recruitment entails finding patients who are known to have a preexisting
disease or condition. This type of recruitment is much like any other marketing
effort—investigators identify and contact potential subjects to determine their
interest level and eligibility for participation. Patient registries work well
when this type of recruitment can be used, although some patients will
participate over and over again in clinical trials as "professional
subjects."

Passive recruitment is more challenging. Passive recruitment is required when
the device (or other treatment) cures the patient. In effect, the treatment "uses
up" the subject and he or she can no longer be considered a candidate for
future studies. This means there's no available pool of patients to recruit
from. The marketing effort in this case focuses not on reaching potential
subjects, but on reaching other caregivers who may be persuaded to refer their
patients to the study.

Historically, manufacturers have left subject recruitment to the investigator.
But given the increasing competition for subjects, requirements for more and
larger trials, and the importance of getting to the marketplace fast, this is no
longer a satisfactory approach. Subject recruitment is so vital to conducting a
timely clinical trial that no sponsor should consider initiating one without
planning a subject-recruitment strategy to accompany it. Recruitment strategies
require thought about the format of communication—print advertisement, flyer,
presentation, oral advertisement—and the vehicle—newspaper, society newsletter, radio, and so on. In fact, there are service providers who do nothing
but recruit subjects for clinical studies, identifying and screening potential
subjects before referring them to the nearest participating investigational site
for enrollment.


OTHER SERVICE PROVIDERS

In addition to CROs, investigators, IRBs, and subject recruiters, there are
numerous other niche service providers. There are companies that design and
print case report form booklets (Megasis, Hacienda Heights, CA), freeing
manufacturers from the time-consuming task of preparing a professional,
easy-to-use layout. There are companies that specialize in preparing coordinated
advertising materials for subject recruitment (STAT, Inc., Fort Myers, FL).
There are companies that specialize in monitoring and contract staffing
(ClinForce, Morristown, NJ),
or in telephone screening for patient recruitment (American Mediconnect, Inc.,
Chicago). There are Internet sites that list related products and services (CatoSource, Durham, NC;
CenterWatch, Boston;
CRI Registry, Huntington Beach, CA);
companies that will audit a study or manage a project (Bradstreet, North Brunswick, NJ); laboratories that specialize in processing tissue and blood samples
(Corning-SciCor-Covance, Indianapolis); companies that provide specialized
technical training (Clinical Design Group, Chicago); recruiters who specialize
in clinical research positions (Med Exec International, Glendale, CA); companies
that specialize in statistical data analysis (Statprobe, Inc., Ann Arbor, MI) or
that will loan out statisticians (Trilogy Consulting Corp., Waukegan, IL). There
are companies that design trial management software (Integra Systems Design,
Inc., Mobile, AL), systems for remote data capture
(Clinical
DataFax Systems Inc.,
Ont., Canada), or project-management software. There
are consultants who specialize in regulatory affairs. For every service
imaginable, there is someone who provides it.

Device manufacturers must be cautious, however. Most of these companies
originated in the pharmaceutical industry and know little about medical devices.
They might impose a standard that is different or stricter than what device
manufacturers need. Their price-tags might be too big for many budgets, and
their customary timelines might be far too lengthy. Manufacturers must ask for
medical device experience, conduct thorough interviews, and begin with a small
project. If a company provides a needed service, device manufacturers might
consider making the investment to train it in medical devices.


CONCLUSION

Device manufacturers have historically worked outside the mainstream of clinical
research providers—so much so, in fact, that they may not realize how small a
role they play in the industry as a whole. The importance of medical devices to
the clinical research industry is not likely to get proportionately
bigger—research in the device market could double or triple and it wouldn't
really make a dent in the industry overall.

But the picture isn't gloomy either. The rest of the industry has begun to take
notice. At the annual conference of the
Associates of Clinical Pharmacology
(ACP) last May, for example, a surprising number of contractors claimed to
have medical device experience or were eager to acquire it. Larger companies
have started medical device sections, and small companies are looking for ways
to reach out. The problem is that the two groups can't find each other. Right
now, there's no good clearinghouse in which to bring device manufacturers and
clinical research service providers together. This will change as publications
such as this one present more information about clinical research, as
organizations such as ACP commit to supporting medical device clinical
researchers, and as service providers start exhibiting at device-specific
conferences.


REFERENCES

1. "Can Academic Centers Remake Themselves?," CenterWatch,
July 1, 1995.

2. "Here Come the Hybrids," CenterWatch, October 1, 1996.

3. "Medical Device Trials: A Market in Flux," CenterWatch,
December 1, 1995.

Nancy J. Stark is president of Clinical Design Group, a
Chicago-based contract research organization serving the medical device
industry.


Copyright © 1997 Medical Device & Diagnostic Industry

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