How can pharma manage rising trial costs?

Clinical trial costs have been rising for the past 10 years, so how are sponsors and biotechs managing costs? Image credit: Shutterstock / Lightspring

Clinical trial costs have been rising year-on-year, with companies working to balance the scales and keep studies running despite declining investment.

The pharma and biotech sector appeared to be jumping into action during the 2021 financial boom, however, this was followed by a drought of financing in the three years since. At the same time, costs have been rising for research, meaning companies who are yet to market a product are caught in the middle of a perfect storm.

GlobalData research, using its proprietary Trial Cost Estimates model, shows the cost to run single-country and multi-country trials has risen annually over the past decade (2014-2024). This, coupled with a variety of global political shifts, means these prices are likely to continue rising according to experts, meaning the sector may have to start rethinking strategies to keep trial costs manageable.

GlobalData is the parent company of Clinical Trials Arena.

Adequate staffing is a major trial cost

One of the main drivers of rising trial costs is personnel, experts agree. Jeff Fischer, CEO of Longhorn Vaccines & Diagnostics, notes that contract research organisation (CRO) costs are increasing, largely driven by rising staffing costs.

As a result, Longhorn has been focusing on pre clinical and Investigational New Drug (IND) research to keep costs in-house and reduce the number of patients and data needed. He adds that having a good understanding of what a drug is doing and the best patient population before going to the clinic is helpful in managing expenses.

While helping reduce the cost of Phase I and Phase II research, these investigations are unlikely to have a great impact on Phase III studies, Fischer concedes. For Longhorn specifically, Fischer says that the increase in vaccine speculation means that clinical trials must include all patient groups to ensure that safety signals and efficacy can be more effectively evaluated before approval to avoid post-approval signals, such as the blood clots which were associated with Covid-19 vaccines. As a result, large-scale studies with certain therapeutics are unavoidable.

Jason Jones, global business development lead for Cellular Origins

While personnel costs are increasing, material costs are also on the up says Jason Jones, global business development lead for Cellular Origins, a technology company looking to drive more scalable and efficient manufacturing of cell and gene therapies. Jones hopes that now several cell and gene therapies have received approval, companies will be more flexible and supportive of sponsors to get therapies over the line.

These material increases are not limited to pharmaceuticals or raw materials, with a rise in costs for instruments and devices associated with the manufacturing of these therapies. Jones agrees that personnel costs are a huge contributor to rising trial costs but says that automation in the manufacturing space could help drive these down.

In cell and gene therapies, due to a limited patient population and the utilisation of natural history/real-world data, costs are generally lower than large-scale studies for more prevalent diseases, but they often require more trained staff.

“You have to coordinate the patient in the hospital itself, especially with autologous therapies, then you may be flying the cell product around the world after it’s been frozen to get it to the manufacturer. It then goes back into the logistics chain and back to the hospital to return it to a patient. That means we’re likely to see more price increases,” Jones says.

Heather Purvis director of operations at Title21 Health Solutions, agrees that staffing is a big part of the cost and can see this only worsening as various National Institutes of Health (NIH) grants are culled.

Heather Purvis director of operations at Title21 Health Solutions

“You need highly skilled individuals who can pivot and be critical thinkers. That takes a lot of experience and training, so these staff members are highly sought after,” explains Purvis. “Not only this but now, staff are being asked to do more with less because of the cuts in the funding. With the funding removal, the cost of staff is going to increase even further. I believe that is one of the biggest issues that we’re seeing within the space currently.”

Simplifying trial designs

Often, trial designs can be made more complicated than needed. Reducing the number of endpoints being evaluated and limiting it to just those that are necessary is a way to reduce trial cost, says Meri Beckwith, co-founder of Lindus Health, an “anti-CRO”. Beckwith notes that over-optimising can be dangerous financially and can elongate the planning process, when two smaller, less complex trials with different endpoints could save both time and money.

“People just aren’t thinking rationally about the purpose of the clinical trial and the endpoints they need to get from the study. Instead, they’re getting caught up in optimising every endpoint to collect more data which draws them into a spiral that leads to bloated trial designs that are more expensive. Just keep it simple and focus on what matters.”

Beckwith suggests that one way to achieve this is by asking more from a CRO when it comes to designing a study, requesting more milestone-based studies.

Biomarker adoption

More sponsors are evaluating biomarker-based endpoints in their studies, which experts agree will assist in bringing early-stage trial costs down as it can signal efficacy and drug targets at an earlier stage. They can also be used in healthy volunteer studies to determine a variety of indications in which the therapy could be efficacious.

They can also be used to shorten trial length as they can, in certain cases, establish efficacy earlier than physical symptoms. Fischer uses sepsis as an example, stating that Longhorn’s antibody therapies are using a biomarker to detect early stages of bacterial infection. This can help to establish earlier signs of efficacy in a drug and reduce the trial length, saving sponsors money.

Jeff Fischer, CEO of Longhorn Vaccines & Diagnostics

“We believe that biomarkers are going to play a huge role in the Phase I and Phase II arena, and I think that more studies are going to be done at these stages because being able to do your safety and immunogenicity studies in populations that you can gain efficacy information from too is going to become more important,” Fisher says.

Fischer acknowledges that this could increase risk but believes it will be outweighed by reward due to the abundance of data it will provide.

Tariffs expected to significantly drive up study costs

Unsurprisingly, Trump’s tariff announcements are at the top of the list of considerations by the clinical trial sector right now when evaluating trial costs. While pharmaceuticals were granted a temporary reprieve, Trump has stated they are coming soon. Pharmaceuticals have normally been excluded from tariffs because of a 1994 World Trade Organization agreement.

The second largest cost rise in the clinical trial sector is from supplies, says Purvis, who adds that a colleague has already said they are pivoting away from specific clinical trials because of tariffs. “These could have been potentially promising lines of clinical trials, but unfortunately, they’ve had to limit themselves because they just couldn’t afford to handle that with the impending tariffs. We’re only going to see an increase in costs unless US-based companies re-imagine manufacturing but that takes time,” Purvis explains.

Another concern is that tariffs could lead to longer development times, especially given that companies will be trying to do more with less. Sponsors may consider reducing patient numbers, but this would have a knock-on effect on the quantity of data for a sponsor to use when seeking approval, Purvis adds.

To try and avoid tariff costs impacting clinical trials, some European-based sponsors/biotechs may consider avoiding the US when running studies, Jones believes. The importance of the US market however cannot be underestimated, which could mean that companies feel an obligation to run studies in the US to provide a substantial package for approval to the US Food and Drug Administration (FDA) when seeking approval. While European data is considered by the FDA, as long as the data is applicable to the US population and is of sufficient quality, there is the possibility that this opinion could shift under the Trump administration and the changes in the FDA, Jones adds.

This will heavily impact the cost of running clinical trials, experts agree, but as everything is up in the air it is difficult to work out quite how much the industry will feel the impact.

Now, the constant changes make it difficult for companies to make important decisions on clinical trial design, Jones concludes. “I think we can cope with some of the changes that are happening now if we’re left for a period without more changes so we can get used to it and we can strategise around it. I think we’ll get calmer waters if the waters are allowed to calm, if we keep getting a series of abrupt changes, it’s going to be difficult.”

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