Capitalizing on Clinical Research 4064

By bringing together varied voices within a medtech company, clinical trials can be designed to meet a wide range of needs.

Helen Colquhoun

September 1, 2006

17 Min Read
Capitalizing on Clinical Research


Clinical trials represent a major investment for medical device manufacturers. Excluding the cost of the devices used in the trials, the total cost of clinical trials varies according to their complexity and size, with most falling somewhere in the range of $500,000 to $3 million. Certain trials, such as those in the cardiovascular stent market, can cost even more.

Many manufacturers are spared these expenses because they do not need to obtain clinical data to gain clearance to market their devices. In the United States, the premarket notification (510(k)) process permits manufacturers to gain market clearance by claiming similarity to a predicate device already on the market. This option simplifies the regulatory process, but it presents challenges for a manufacturer's marketing group because the device's labeling includes nothing that differentiates the product from its competition.

On the other hand, FDA requires manufacturers of Class III or complex Class II devices to provide clinical trial data in their premarket approval (PMA) applications or 510(k) (with clinical) submissions. Clinical trials designed to gain regulatory clearance or approval to market a device represent a substantial proportion of the clinical research that is sponsored by medical device manufacturers. However, there are other areas in which clinical data can benefit manufacturers, thereby creating a need for clinical trials beyond the initial regulatory function.

Reasons for Clinical Trials

There are multiple reasons that a medical device manufacturer might pursue a clinical trial, both before a device is cleared or approved by FDA (premarket) and after a device is being marketed (postmarket). For example, companies may pursue clinical trials for marketed devices in order to obtain data that differentiate their devices from the competition. Manufacturers usually publish such data in the hope that clinicians will move away from using competing devices. Manufacturers interested in pursuing a more robust marketing strategy may also use the data to effect labeling changes, allowing formal promotion of the differentiating attributes of their devices. Such postmarket clinical trials are often less formal than the premarket trials. Generally, these studies are subject to less regulatory scrutiny—unless the data are to be used to effect labeling changes. In this case, trials must be set up and managed in the same way as premarket clinical trials.

Another factor that drives manufacturers to perform clinical trials is the need to gather economic data to support pricing and reimbursement. As payers in all markets move to contain spending on healthcare, new technologies are subject to the most scrutiny in terms of obtaining reimbursement codes and good market prices. Without convincing economic data demonstrating cost-effectiveness, manufacturers are finding it increasingly difficult to argue their products' cases in this arena.

In addition to labeling, pricing, and reimbursement, there are other commercial reasons for device manufacturers to conduct clinical trials. Such research can help companies engage key opinion leaders in their markets of interest, as well as seed the market by encouraging early adopters to gain experience with the device and pass on their experiences via publications or presentations at scientific or clinical meetings. Clinical data can also help manufacturers produce publications designed to change clinical practices in favor of use of their new devices. Furthermore, data gathered in clinical trials can also contribute to the design of a device by demonstrating that iterations to the device design support its utility in clinical use.

Manufacturers often need to sustain a constant flow of positive news related to their devices in order to satisfy the public or private equity markets. Milestones in clinical trials usually form part of this news flow. Therefore, it is essential that premarket and postmarket trials be achieved in a timely manner; delayed trials can contribute to a flow of negative news in the same way successful studies feed the positive news flow.

As the demand for clinical data increases, fewer medical device manufacturers can escape the need to perform clinical trials. The costs of such activities represent a major outlay for small and large companies alike. Therefore, it is imperative that clinical trials be designed in ways that protect manufacturers' investments. A study's design should minimize the risk that it will not fulfill the needs of the company and maximize the value of the data produced. This article describes strategies for ensuring that these goals are attained.

Communication Breakdown

Senior executives, investors, and board members often see clinical trials as purely operational matters. They concern themselves with questions of a study's size, length, and duration and often fail to see them as strategic tools within the corporate development portfolio.

As previously mentioned, there are multiple uses for clinical data. Manufacturers looking to maximize the value of studies should design them in a way that serves as many of these objectives as possible (see sidebar). Although the main reason to conduct a clinical trial is to gather safety and efficacy data to obtain regulatory clearance or approval to market a device, the commercial, corporate, and manufacturing objectives that can be served by the data gathered during clinical trials should not be ignored.

One of the biggest mistakes manufacturers can make in designing clinical trials is to focus on one objective at the expense of others. This somewhat-shortsighted approach usually comes about because one department—such as the clinical or regulatory department—is given sole responsibility for the study's design. Wide consultation within the company often does not take place, and the study is designed to meet only the most immediate need of the manufacturer. For example, when clinical trials are being considered for devices that have not yet been approved for marketing, the regulatory needs of the project tend to dominate, and the clinical trial is designed at the expense of commercial and corporate needs.

For clinical trials conducted for devices that have already been cleared for marketing, the commercial interests of the company tend to dominate. The manufacturer's commercial group may forget that the data must be gathered in compliance with regulatory standards if label changes are to be effected. For example, responsibility for postmarket clinical trials is often placed with a manufacturer's marketing department.

While it may make perfect sense to marketing executives to use sales representatives to set up and manage the trials, this approach may present problems for how the resulting data may be used. FDA may not accept the data as part of a label-change submission because they were not gathered in compliance with the relevant regulatory standards. Although the direct costs of a clinical trial undertaken by a marketing department may be small when compared with a trial designed for regulatory approval, the real cost comes from a delay in implementing a label change for a new intended use—and thus the loss of revenues from a potentially lucrative market.

In addition to direct and indirect costs associated with failed trials, the cost of not taking into account the needs of multiple functions within a company can be high, as evidenced in these examples.

  • A company developing a medical device that incorporated a syringe was required to conduct
         a clinical trial for regulatory purposes. The executives developing the clinical trial lacked full
         commercial understanding of the major market for the device, the United States. As a result,
         the clinical trial used a syringe size that was not commonly used in the United States.
         Although the product gained regulatory approval, sales were extremely poor.

  • A company developing a single-use, needle-free injection device failed to understand that its
         product would be regulated as a drug and not as a medical device. It conducted a clinical
         trial that would have served the regulatory needs of the product had it been regulated as a
         device. However, the clinical trial program—at a cost of about $1 million—had to be repeated
         and expanded to meet the requirements of pharmaceutical regulations.

  • The U.S. clinical trial of an implanted device received insufficient resource allocation and little
         attention from the firm's senior management. Ultimately, this led to poor compliance with
         investigational device exemption (IDE) requirements and a six-month delay in PMA
         application approval for the device. In the meantime, a competitor product was approved and
         launched. In addition, the cost of remedial monitoring to satisfy FDA was double what it
         would have cost to manage the initial trial according to the regulations.

    Pooling Resources

    In order to maximize the value of a clinical trial, its design should fulfill as many of the company's varying needs as possible. In doing this, a manufacturer can benefit from forming an internal clinical strategy group comprising senior executives who represent the regulatory, commercial, corporate, and manufacturing functions. By bringing together representatives of such varied functions, a company can formulate a single vision for a study that meets the needs of each department. Clinical strategy groups perform a key function in the clinical research process that cannot realistically be outsourced; the knowledge to effectively identify the strategic goals of a clinical study generally resides within the company itself.

    In regard to external input, an underutilized tool for strategic and operational planning is the clinical advisory board. This is a formal group of key opinion-leading clinicians who are experts in the clinical areas in which the manufacturer operates. These individuals are often practitioners in major markets, such as the United States, Germany, the United Kingdom, France, and Japan. As members of a clinical advisory board, they provide strategic and operational support to the manufacturer's management team. Advice may include insights on market trends, competitor products, new developments in the field, and pricing issues. They can also provide input on clinical research endpoints and study designs. They can also assist during interactions with regulatory bodies and reimbursement agencies.

    Manufacturers can set up clinical advisory boards to suit their own needs, but careful choice of participants is essential. While they must be key opinion leaders and respected in their fields, they should also have solid commercial awareness and appreciation of the regulatory environment in which the manufacturer operates.

    Making Decisions

    Once a manufacturer has identified the key internal and external individuals who can contribute the greatest value to its clinical planning, the decision-making process begins. Depending on which viewpoint a member of the clinical strategy board or clinical advisory board represents, the considerations that each person brings to the table can be vastly different. Therefore, dialogue among decision makers is key.

    Regulatory Considerations. When considering a premarket clinical trial, the first strategic decision to be made by a manufacturer is whether to launch with narrow, me-too claims that don't require clinical data, or whether to perform a clinical trial to substantiate claims that the competition cannot make. The former strategy shortens the time to market, usually at the expense of market share, and it often mandates a subsequent postmarket trial to expand claims and improve competitiveness. The latter approach extends the time to market by the duration of the clinical trial, but it allows for maximum market impact upon launch.

    As previously stated, regulatory agencies may require premarket trials for some devices—particularly those without a predicate—in order to satisfy the requirements for market entrance. However, agencies may require trials even for devices that are not breakthrough technologies if their manufacturers are looking to make differentiating claims and thereby maximize market potential. Such differentiating claims must be substantiated using premarket clinical trial data in a PMA or 510(k) (with clinical) application. Therefore, clinical trials must be designed to accommodate endpoints and measurements that support the new claims.

    A major responsibility of the regulatory members of a clinical strategy group is to remind other members of the regulatory implications of the decisions they make. Group members must ensure that trials can be conducted within the allotted budget and still conform to regulations. If FDA suspects that a company failed to monitor its clinical study in compliance with regulations, it may refuse to consider data from the study in the 510(k) or PMA submission.

    Commercial Considerations. Commercial strategic decisions to be made include the choice of ideal label claims to maximize exploitation of the market; the identification of key reimbursement and pricing issues in different healthcare systems of interest and what data will be required to address them; and identification of key opinion leaders in the major marketing territories of interest and how best to engage them.

    The decisions regarding desired label claims and reimbursement issues determine the patient population and endpoints in the study. In turn, this determines the size, duration, complexity, and cost of the trial.

    Economic data gathered in one country will usually not support pricing arguments in another. This can result in a delay in reimbursement approvals and loss of market share in regions of interest if not taken into consideration at the outset of the clinical planning process.

    Participation of key opinion leaders will determine at least some of the clinical research sites. However, some opinion leaders may not wish to participate in the study and instead will act in an advisory capacity.

    Strategic regulatory decisions are inevitably intertwined with commercial ones. For instance, the easiest regulatory route to market for a device may be via a 510(k) with no clinical data, resulting in a narrow label that is very similar to a competitor's. However, if a clinical trial is performed, the commercial needs of the company may be better served. The regulatory path to market will still be a 510(k); however, clinical data acquired during a trial will allow additional or different labeling claims when compared with the predicate device.

    Corporate Considerations. Strategic corporate decisions involved in the clinical planning process are usually related to budgets, external financing, and public relations. Discussion and compromise are often required as the commercial needs, regulatory requirements, and budget constraints are weighed against each other to formulate the best plan for the company at that time. A possible outcome of these discussions may be that no clinical research will be undertaken. Such a decision may be made if no clinical trial is necessary for premarket approval or clearance for a device and if alternative ways to provide data to support proposed claims can be determined. For example, such data may be available in published literature.

    In some cases, there may be no way to stretch a clinical trial's budget to satisfy the data needs outlined by commercial representatives of the clinical trial strategy group. A manufacturer's marketing department is then left to promote the device as best it can based on claims that can be supported without clinical data. However, before the commercial aspect of a clinical trial is abandoned, the group should revisit the initial list of commercial needs to see if it can be revised and fully met through a trial of a different design and cost.

    Although there is a need for the data endpoints of a study to be defined within the context of a budget, manufacturers must also consider the appropriateness of that budget throughout the decision-making process. Some medtech executives tend to design clinical trials based on the available budget without taking into consideration the corporate, commercial, and regulatory needs of the company. A company's goals may be fully met by undertaking a $1 million clinical trial. However, the company may attempt to set up and manage the trial within a $500,000 budget. Such inadequate resources can lead to poor recruitment, low-quality data, lack of compliance with basic regulatory requirements, and too much reliance on academic investigators whose motivation for conducting the study may not be aligned with that of the company. Consequently, the trial may fail to meet its desired endpoints. Although the direct costs of the failed trial may not be great, the indirect costs of not meeting the needs of the company may be much greater.

    Manufacturing Considerations. Another group that is essential to the clinical planning process is the manufacturing group, which encompasses research and development, product design, engineering, manufacturing, and quality assurance. This group represents the powerhouse of innovation that drives new devices and design iterations of existing devices. Significant interplay exists among this group and the regulatory and commercial groups. After all, commercial needs drive research programs, research findings prompt reassessment of potential markets, and a manufacturer's regulatory arm must ensure that the claims on a device's label fully exploit a device's potential. If a novel device is cleared for marketing with label claims that are no different than competitor devices, promotion of the innovative features of the new device can be difficult.

    In addition to the research that drives a company's product development, the manufacturing group informs the strategic planning process by providing information about the physical, engineering, and manufacturing limitations of a device. For instance, a company's marketing group might believe that the physical dimensions of a device need to be changed to serve an expanded market. However, the company's engineers might be in a position to point out that changing the device's dimensions would require a new manufacturing process, the cost of which would exceed any predicted increase in market revenue. In addition, the manufacturing group may require iterations of a device's design to be tested clinically. Clinical strategy discussions can benefit by taking such manufacturing insights and requirements into consideration.

    Coming Together

    Developing a company's clinical strategy is an iterative process. Individuals representing various company interests should come to the table armed with the information needed to contribute meaningfully to the discussion. Such information includes detailed market research for commercial needs as well as research into a device's regulatory position, including the classification of the device and knowledge of any pertinent regulations.

    Early in the process of discussing clinical planning, members of the clinical strategy group should draft proposed labeling for the device in question. This discussion will bring the following issues to the forefront for debate.

  • The scope of the claims needed to support a certain projected market share.

  • Whether such claims can be supported without clinical data.

  • Whether any changes to the device itself would improve market share.

  • The best study design to achieve the desired endpoints (if a clinical trial is needed to satisfy
         regulatory demands or to support label claims).

  • The necessary size of the study and duration of the follow-up period, based on input from a
         statistician and the clinical and regulatory groups.

  • Whether the budget covers the projected study costs.

    For each discussion point, it may be necessary to revise the desired claims if it is determined that the budget will not support a study to substantiate the initial claims. In light of serious budget constraints when planning a premarket clinical trial, a manufacturer may have to resign itself to seek clearance to market the device based on narrow, me-too claims. Once the device is on the market and generating revenue, the company can seek to expand the claims by conducting a postmarket trial.

    Driven by a draft label, an iterative clinical strategy development process ensures that the corporate, commercial, regulatory, and manufacturing needs of a company are all taken into consideration when clinical trials are discussed. If compromises are necessary, all parties are engaged in the negotiation process. Such a model has been used successfully for more than 15 years in the pharmaceutical industry, yet it is a fairly new concept within the device industry.

    Once a clinical strategy has been established, the clinical study can be turned over to an operational team. This team designs the details of the study, selects appropriate sites, and manages the study in order to meet the objectives set by the strategy group. The operational team should include personnel with expertise in regulatory affairs and clinical trial management. For smaller companies with limited in-house resources, the operational team's work may be outsourced to a clinical research organization (CRO). This strategy works well as long as there is someone within the company who has sufficient clinical trial management knowledge and expertise to effectively manage the CRO. Whether the clinical trial is handled by an in-house operational team or is outsourced to a CRO, an appreciation of the operational resources and skills required for clinical research is essential to being able to manage the process effectively (see sidebar).


    Overall, the clinical strategic planning process should begin 6 to 12 months before the date on which a manufacturer would like to see the first patient enter the study. Such a time frame allows for an iterative strategic decision-making process, for adequate external input, and for interactions with regulators. It also allows time for the operational planning and implementation processes. By implementing a strategic planning process that incorporates the viewpoints of multiple functions across the company, a manufacturer can minimize the risk of clinical trials failing to meet its needs, thereby maximizing the value that the studies bring to the firm.

    Helen Colquhoun is president and CEO of Pleiad Devices (Cambridge, MA), a clinical research organization focused exclusively on medical device trials.

    Copyright ©2006 MX

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