Clinical Trial Pirates

How Big Pharma ruins everything

It is the start-ups and small companies who drive innovation. So many medical breakthroughs, scientific discoveries, and technological ideas come from small operations rather than the large ossified big companies. Apple started out with a couple of tech guys. In medicine, Medtronic literally began in a garage. One of the first pacemakers ever built was made in the inventor’s kitchen.

While most Americans know that the Food and Drug Administration (FDA) clears all drugs for the market in the United States based on data, scientific studies, and clinical trials, what people do not realize is that the drug companies (called Sponsors) pay for these trials. Unlike with student loans, there is no federal assistance provided here. The FDA spells out what sort of clinical studies are needed, and it is up to the Sponsor to make it happen. Even a relatively straightforward modest clinical trial can cost millions. Some drugs require more than one big trial. Bringing a new drug to market is a high-risk, high-reward enterprise.

The people who participate in these clinical trials are hard to come by. Winning participants to join clinical trials may best be described as similar to the labor of Sisyphus, but with government red tape and endless Zoom meetings thrown in.

First, you have to recruit the right kind of person. If you’re testing a diabetes drug, you need people with diabetes. But you don’t want to get a person who has diabetes and cancer, because that could confound your data. If you’re trying to evaluate a drug for geriatric patients, you need old people, but you need to be sure they aren’t taking some other medication that might interfere with your study drug. Once you find the appropriate subjects, you have to “consent” them. This means you need to get them to sign off on an official and near-sacred document called “Informed Consent.” The idea is now that you have somebody interested in the clinical trial, you get to scare them with all the potential things that could go wrong. Participants learn risks and benefits, what is expected of them in the study, and their rights. Those rights always include the ability to drop out of the study at any time for any reason or even for no reason.

Most people do not like to participate in clinical trials. In fact, 80% of the clinical trials that are started in the United States fail to meet their enrollment goals. Not only that, even when patients do enroll, 30% drop out before the study is completed. Some studies (86%) just languish and wait months, even years, to try to reach their required participant goal. Sometimes, Sponsors try to offshore the trials, thinking they’ll have better luck in foreign countries, but it is only marginally better there, if at all. In fact, 11% of clinical trials worldwide do not enroll even one single person.

If you can’t do the clinical trial, you can’t bring your product to market. That’s why study subjects are a very, very valuable group.

For example, imagine a little start-up medical company with a new migraine drug—we’ll call this company David. David hires a Contract Research Organization (CRO) because while David is great at drug development, they are not prepared to run a major clinical trial, particularly one on which the future of their company depends. The CRO specializes in clinical studies. The CRO goes out, identifies suitable sites (those that see a lot of migraine patients), makes inquiries, builds rapport, trains the clinicians, supplies lots of educational materials, and gets the site ready to start the migraine study.

CROs have a lot of hard-won tactics to get patients to enter trials. They identify and vet specific sites (clinics or hospitals) where the study is to be conducted. They want sites most likely to have an inflow of patients who meet the study criteria. They build relationships with the clinical team—from receptionist to physician—in order to work hand-in-exam-glove with the local team, training them in the study. They help the clinic identify potential candidates for the trial. They produce and distribute lots of educational material for patients. They monitor the sites regularly. Let’s say a clinic was going to do a study on a new drug for migraines—that clinic would be prepared with educational materials, training seminars for the clinical team, maybe a short patient video, and lots of reminders to help get qualified people to participate.

As part of the deal, the CRO, representing the David company, agrees to pay the site a specific sum of money for every patient who goes through the study. Let’s say in this case, the CRO offers the clinic $10,000 per patient. This is not an outrageously high amount. It is paid to the clinic or hospital and covers the recruitment costs, all of the treatments, drugs, monitoring (many studies last 12 weeks or longer), data collection, and related services. Running a clinical study can place a huge incremental burden on the clinic in terms of extra work, and they require compensation, which for trials is typically handled on a per-patient basis. The CRO signs a contract with the David company and from those monies, it can offer the sites $10,000 per patient.

Meanwhile, let’s say a Big Pharma company has a new migraine drug (cue the scary music). It’s not quite as good or safe as David’s drug, but the FDA has given them the green light to start their own clinical trial. Let’s call this Big Pharma company Goliath. Goliath does not want to be bothered trying to vet specific sites; it knows where David has made inquiries. It doesn’t have to mess much with training the clinicians at the local site; they already have been trained on general principles by David. Goliath may not even see any point developing educational materials or other items. When it can, it just finds David’s sites and moves in. It’s like those birds who steal the nests of other birds.

“Hi,” Goliath says to the clinic. “I see that you are recruiting migraine patients. We have a study for our new drug, and we’ll pay you $15,000 per patient.”

Now suddenly the clinic that started out with the David protocol is going to recruit for the Goliath study.

What Goliath is doing is not illegal, it’s not even really unethical. But it boxes in the little companies like David, harms CROs, and may even destroy the chances of David’s new drug. David’s CRO cannot raise the per-patient rate—it signed a contract and David is only paying a certain amount. Furthermore, it is unlikely David has the kind of bank account that will allow them to play this kind of up-the-ante game. David and David’s CRO have little to no flexibility to increase payments per patient.

Goliath has a lot of advantages, including the economy of scale. Goliath has a large and experienced in-house department that runs its clinical trials, and it is free to adjust prices as it sees fit. It could pay $20,000 per patient, if it wanted and felt the expenditure was justified. A CRO and a little start-up simply cannot do the same.

Why does this matter? Well, this sort of piracy represents another major hurdle for small medical companies and their CROs. No matter how great their new drug might be, no matter how much time, listening, and effort they invest in building up relationships with investigational sites, no matter how much educational material they provide to patients, no matter how much their product might benefit people, Big Pharma Goliath can practically shut down their trial. All it takes is more cash delivered precisely to the right places.

Clinics and investigators cannot really be blamed for choosing to recruit patients into the more lucrative study. The investigational sites just run patients through the trial; they are not part of the “big picture” and have no incentive to stick with any particular study. If a migraine patient consents to enter the trial, the investigational site is going to go with the higher amount offered by the Goliath study.

So how do we protect small companies, start-ups, innovators, and CROs from getting clobbered by Goliath?

“This is a call to awareness. Solutions must be found,” wrote Joseph Pergolizzi, MD, MBA, in a recent editorial. Pergolizzi is one of the founders of the Naples-based CRO NEMA Research. “It may be that we have to move to decentralized trials.”

Decentralized trials are already in existence but since they rely heavily on patient self-reports there are some drawbacks. However, it may be possible to build in telehealth apps or other safeguards to assure compliance from remote patients.

“A decentralized trial is just one that operates independently from an investigational site,” Pergolizzi explained. Recruitment is handled more remotely and patients still sign Informed Consent and get information before joining. They then follow the protocols of the study and can call in to a central help desk if they have questions or problems. They may have to go the a lab for a blood test or certain other tests, but it can be handled at the local level at any doctor’s office.

“Right now, the wealthy companies have a major advantage in getting their drug to market faster. Speed-to-market is a major driver in healthcare,” Pergolizzi stated.

Since clinical studies are increasing at rapid rates (more than 500,000 clinical trials have been registered in 2023 compared to about 220,000 in 2015), this is an important question that urgently needs an answer. Statistical validity requires a minimum number of participants and the FDA is inclined to want large study populations. That may be sound science, but it results in fierce competition among drug companies for clinical study participants and gives Goliath the advantage over David.