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 isgrowing. To make well-informed choices, device manufacturers need to be aware ofthem all.

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

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

INVESTIGATORS

Investigatorsare the manufacturers of the clinical research industry. Their product is data,their raw materials are patients, and their customers are sponsors. Academiccenters such as universities and teaching hospitals are no longer the mostsought-after investigational sites. In fact, in 1993, 57% of clinical studieswere performed by investigators not affiliated with academic centers.¹There are four important reasons for this. First of all, academic centersrequire 60–150 days for contract, budget, and IRB approval, compared to 30–60days 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 outpatientclinics; and academic centers are burdened by high overhead and bureaucraticinfighting.

So who's conducting the clinical research? Academic centers list privateclinical research centers as their biggest competitors.¹ These arefollowed by other medical schools, private-practice physicians, managed-careorganizations, 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 recognizedinstitutions, but clinical researchassociates (CRAs) quickly learn that young, yet-to-be-establishedinvestigators are easier to work with and deliver a more reliable product.

Large, academic centers tend to be chaotic places with dozens of investigatorsfighting for their territories within a mazelike bureaucracy. Investigatorswithin the same institution might not cooperate with each other or referpatients to one another, so while the institution may be large, the pool ofpatients available to any one investigator may be small. The physical structureof the facility is often not amenable to good research; the investigator'soffice may be on one floor, several coordinators may be crowded into a singleoffice on another floor, subject reception areas may be in another wing,recordkeeping areas in still another. The physical barriers to efficient workare formidable. Finally, because the institution is accustomed to receivinggovernment grant money, it may insist on a surcharge for overhead—so whateverthe study budget negotiated with the investigator, another 25% or more will beadded to the bottom line as institutional overhead.

Less-traditional sites such as private-practice physicians, managed-careorganizations, and outpatient clinics look upon clinical research as anotherpotential revenue source. Limited in their ability to make money throughtraditional health-care delivery, these groups are turning to clinical studiesto increase their revenue streams.¹ For two important reasons,sponsors will do well to consider using such investigators. To begin with, theyview clinical research as an important part of their business, and they aim toplease their sponsor-clients. Second, these sites attract patients. As Americansmove from traditional pay-for-service health care to managed care, patients tendto receive their care in smaller clinics and hospitals, not in large academiccenters.

Many investigational sites are now incorporating, forming business entities forthe sole purpose of conducting clinical research. They advertise regularly inprofessional journals, maintain databases of potential patients, exhibit atconferences, and telemarket their services. Some very fine clinical research isperformed at these sites. If a study will allow subjects recruited from a knownpool of patients with preexisting conditions, and a particular investigativesite has such a pool of patients, this may be the most efficient and timely pathto obtaining clinical data.

Even contract research organizations are getting into the act. Conceived assurrogate clinical research departments, CROs first came onto the scene in themid-1980s in response to the national trend toward downsizing. Drug companiesdivested themselves of monitoring and other clinical research capabilities tolimit headcount, and hired contractors to do this work as needed. One bigproblem with this system is that it adds a layer of bureaucracy between theinvestigator and the sponsor. Partly in response to this problem, and partly asa means to expand their own business, some CROs are acquiring, merging with,partnering with, or otherwise finding ways to work with investigators in orderto present a seamless workplace to the sponsor.² While the ethics ofhaving a clinical research center monitor the work done by itsinvestigator-partner may be questionable, the trend demonstrates the turmoilpresent 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 300CROs in the United States. Five have gone public (ClinTrials Research, Inc., FutureHealthcare, Applied Biosciences International,Parexel InternationalCorp., and Quintiles), one has gonebankrupt (Future Healthcare), and one in Europe is ISO 9000 certified (FactoryMedical Consultancy). Big companies have downsized, and small companies don'thave full-fledged clinical departments; these companies turn more and more toCROs for everything from temporary staffing to full project management.

CROs offer a variety of services. For example, a full-service CRO may design andwrite protocols or investigational device exemption (IDE) submissions, recruitinvestigational sites, negotiate site budgets, monitor the study, manage thestudy, 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, andconsultation services. Most companies don't want all of these services at thesame time, and probably no CRO does all of them well. CROs usually bid onconsulting sessions based on time and materials required; prices vary from $100to $200 per hour. Contract costs are typically bid on a fixed-unit basis. Thismeans that a fixed price is assigned to a particular unit of work, and thenumber of units is calculated for the total project (see Table I).

SPONSORS

If investigators are the suppliers,who are the majorindustry customers? Who are the buyers that bring capital into the industryand hence drive its standards? More important, how big a role does the medicaldevice industry play? The single largest sponsor of research is theNational Institutes of Health(see Figure 2). NIH provides grantsto academic and research centers for the support of biologically significantresearch and also conducts biological research in its own laboratories. Whilenot 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 orhuman 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 acquiringbiological data in this country.

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

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

Some estimates show that as much as 50% of medical device clinical researchinitiated by U.S.-owned companies is now conducted in Europe. There are a numberof reasons for this overseas migration. For example, the establishment of asingle European Union (EU) has created a marketplace that is 30% larger than theUnited States, so introducing a product in Europe will give a manufactureraccess to a larger buying group. Also, many U.S. clinical trials were hamperedin 1995 while Medicare, with the assistance of FDA, sorted out the differencebetween "experimental" and "investigational" devices anddecided which would be reursable. And finally, the introduction of the EU'smedical device directives and clinical research standards is putting the qualityof 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 atconferences, advertise, and publish. The reason for their growth lies in theshift from academic investigational sites to private hospitals and privatepractitioners—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, andacknowledgment letters. The good news is that contract IRBs offer fasterturnaround—they might meet weekly rather than monthly—and are more forthcomingwith written notices, minutes, audit results, and membership lists.Manufacturers should make sure they understand medical device regulations beforegoing to contract IRBs, however, because many have only dealt withpharmaceutical trials. In Europe, ethics boards typically require a fee forservice, and manufacturers should be prepared to pay even larger fees than inthe United States.

SUBJECTS

The general population is becoming more aware of clinical research, astelevision newscasts report on the latest research discovery each evening.Subjects are the rate-limiting resource in clinical research. There are numerousregistries where patients looking for a clinical trial to fit their disease orcondition can list their names, addresses, and telephone numbers. One need onlylog onto the Internet and search for the disease of concern to find listings ofpatients wanting to enroll. Registries are also maintained by professionalsocieties such as the National Society forMultiple Sclerosis or the American CancerSociety.

Device studies may recruit from patient pools either actively or passively.Active recruitment entails finding patients who are known to have a preexistingdisease or condition. This type of recruitment is much like any other marketingeffort—investigators identify and contact potential subjects to determine theirinterest level and eligibility for participation. Patient registries work wellwhen this type of recruitment can be used, although some patients willparticipate over and over again in clinical trials as "professionalsubjects."

Passive recruitment is more challenging. Passive recruitment is required whenthe device (or other treatment) cures the patient. In effect, the treatment "usesup" the subject and he or she can no longer be considered a candidate forfuture studies. This means there's no available pool of patients to recruitfrom. The marketing effort in this case focuses not on reaching potentialsubjects, but on reaching other caregivers who may be persuaded to refer theirpatients to the study.

Historically, manufacturers have left subject recruitment to the investigator.But given the increasing competition for subjects, requirements for more andlarger trials, and the importance of getting to the marketplace fast, this is nolonger a satisfactory approach. Subject recruitment is so vital to conducting atimely clinical trial that no sponsor should consider initiating one withoutplanning a subject-recruitment strategy to accompany it. Recruitment strategiesrequire 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 nothingbut recruit subjects for clinical studies, identifying and screening potentialsubjects before referring them to the nearest participating investigational sitefor enrollment.

OTHER SERVICE PROVIDERS

In addition to CROs, investigators, IRBs, and subject recruiters, there arenumerous other niche service providers. There are companies that design andprint case report form booklets (Megasis, Hacienda Heights, CA), freeingmanufacturers from the time-consuming task of preparing a professional,easy-to-use layout. There are companies that specialize in preparing coordinatedadvertising 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 specializedtechnical training (Clinical Design Group, Chicago); recruiters who specializein clinical research positions (Med Exec International, Glendale, CA); companiesthat specialize in statistical data analysis (Statprobe, Inc., Ann Arbor, MI) orthat will loan out statisticians (Trilogy Consulting Corp., Waukegan, IL). Thereare companies that design trial management software (Integra Systems Design,Inc., Mobile, AL), systems for remote data capture(ClinicalDataFax Systems Inc., Ont., Canada), or project-management software. Thereare consultants who specialize in regulatory affairs. For every serviceimaginable, there is someone who provides it.

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

CONCLUSION

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

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

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, aChicago-based contract research organization serving the medical deviceindustry.

Copyright © 1997 Medical Device & Diagnostic Industry