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Study Finds ‘Operational Gap’ in Clinical Trial Portfolio Management



By Deb Borfitz

February 3, 2010 | For most biopharmaceutical companies, the pressure to improve clinical trial portfolio management efficiency has arrived sooner than their operational readiness to meet the challenge. Corporate intolerance for budget variances above 5% of target is now commonplace. But widespread absence of project-level operational metrics has made it all but impossible to drive planned-to-actual spending into alignment.

So suggests the findings of a recent research study, Trends in Portfolio Management, commissioned by Chicago-based clinical trials operations software provider ClearTrial. Results were based on a survey of 94 biopharmaceutical companies by Insight Pharma Reports.

Just two years ago, only 7% of survey respondents had to manage to a 5% acceptance variance on their portfolio budget, reports ClearTrial CEO Mike Soenen. That figure has climbed “dramatically” to 33%, with 67% of respondents having to stay within 10% of target. “You can’t fix what you can’t see,” he observes. In the absence of project-level information, companies can neither competently manage study portfolios nor reduce the margin of error in their long-range planning. “They lack the visibility to achieve their goals.”

The survey found that 64% of respondents lack confidence in their one-year horizon of project timelines, although meeting timelines rates as the number one measurement of portfolio management performance, notes Soenen. Similarly, 60% of respondents lack confidence in their one-year portfolio budget, the number two performance measuring stick. Confidence in one-year portfolio personnel capacity forecasts, critical to having “the right personnel available at the right times during the course of a study,” was lacking among 57% of respondents.

Improving performance measurement and goals is the top way surveyed companies are attempting to cope with the “operational gap,” followed by improving software and systems. Among large biopharmaceutical companies, re-organization was the third most frequently listed initiative. Soenen views the fact that companies are starting to centralize clinical planning as validation of ClearTrial’s integrated “plan to payment” approach to streamlining clinical operations, which should further strengthen its market position.

The experience of Abbott Vascular suggests ClearTrial software can be a key enabler of otherwise elusive efficiency gains. Last year, the software helped the device maker keep clinical trial spending within a mere 1% of target, reports Thomas Engels, director of clinical program management. In prior years, costs were running 12%-15% under budget because of unanticipated delays in trials start-ups and overly optimistic planning. The software provides visibility across the study portfolio, allowing spending on some trials to offset under-spending on others. Underlying country-specific metrics about timelines, costs, and currency exchange rates also streamlined the company’s first-ever negotiations with Chinese service providers.

Astellas Pharma Global Development has publicly reported that in comparative tests of completed trials to what the ClearTrial system would have predicted as the total budgets, the ClearTrial estimate consistently came within 5% of actual costs. Typically, ClearTrial software saves large and mid-size customers 10%-17% on overall clinical trial costs, says Soenen.
 
ClearTrial helps companies operate “tighter to plan” by giving them activity-level visibility for performance planning and tracking as well as a central, searchable, and accessible repository for all institutional knowledge. Embedded market intelligence allows for rapid scenario planning and more accurate upfront budgeting.

The current “norm” is for time-pressed upper management to declare study milestone dates and budgets without regard for how studies get done and then leave stressed project teams to independently figure out how to hit those targets, says Soenen. Fully 76% of survey respondents say they’re under growing pressure to improve portfolio management efficiency and 80% expect that pressure to increase further next year.

Insight Pharma Reports is now conducting in-depth interviews with a subset of respondents to probe the underlying initiatives and processes of companies able to stay within 5%-10% variance between planned and actual portfolio budgets, says Soenen. That research will conclude with the publication of portfolio best management practices on the ClearTrial website in March 2010.

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