The Importance of Bid Transparency in a CRO Proposal

Planning an oncology study requires a tremendous amount of research, analysis and decisions. Large biotechs and pharma typically have the experience and bandwidth to address these issues internally, prior to evaluating bids from CROs (Contract Research Organizations). But for small to mid-size sponsors, or sponsors new to oncology, this can be an ever-evolving process.

Many of the mid-size sponsors that Medelis works with engage us during their trial planning stage. Some need costs to use for budgeting for their next round of funding or for a grant application. Others have determined the indication, endpoints, locations, number of sites and patient targets, but find that these can change as the discussions evolve. Here are some examples of variables that can affect the design of the study:

  • Site mix and timing
  • Competing trials
  • Patient population
  • Endpoint analysis
  • Number of patients
  • Regulatory hurdles

Since oncology trials may often be more complex than clinical studies in other therapeutic indications, the number of variables can often be greater than in non-oncology trials. There’s also a cascading effect: a change in a single decision can require changes in other areas of a trial. For example, if the number of patients is increased during the course of the trial, this can result in an increased enrollment period, additional monitoring visits, additional SAEs possibly, as well as changes to medical monitoring and data management, such as increased eCRFs, etc. Thus, by increasing or decreasing the number of patients in a clinical trial, the budget of a trial can change drastically.

As we work with sponsors to understand their goals and assumptions, our clinical team often finds alternative suggestions that can improve the quality of data from the trial, or reduce the trial costs due to shortened timelines, or increase patient recruitment. Sometimes the elimination of a particular protocol exclusion criterion (which is found to be unnecessary after discussion with the clinical team) opens up the enrollment to a wider cohort of patients, resulting in decreased timelines by decreasing the necessary enrollment period.

Therefore, when sponsors are reviewing proposals from various CROs and all the assumptions have not been provided at the outset, it creates added complexity. If all of the CROs aren’t fully transparent in their bids, it can create a wide variance of costs, and an almost impossible task to evaluate all of the CRO proposals on an even basis.

Here are some things we see from competing CROs:

  • Projecting costs for fewer sites than are actually needed
  • Bundling monitoring visit cost elements
  • Underestimating study duration
  • Not bidding on every service item in the trial, resulting in change orders and increased costs
  • Not breaking out unit costs so sponsors can proactively update their budget if/when changes occur
  • Unrealistic assumptions used for the trial resulting in a lower initial bid proposal, but requiring multiple change orders as the trial progresses

What to Look for in a CRO Proposal

Bid transparency CRO proposal

It’s not uncommon to view two CRO proposals for a specific trial that appear to be very different in costs at first glance, but in reality are nearly identical. Reviewing the sum total can be misleading. Is the bid for $475,000 for the proposed phase I study really less expensive than the bid for $560,000? It depends. The devil is in the details.

Here’s how to compare apples to apples:

  1. Review the units projected for each service element, along with the corresponding unit cost. It’s not uncommon for a less-experienced CRO to underestimate the number of units required for a specific task. If the units aren’t visible, ask for that detail.
  2. Confirm the assumptions being used for the costs. For example, the number of sites and patients, which drives clinical monitoring costs, can vary between proposals. Ask about site selection. Has the CRO already identified the sites that will meet the enrollment goals within the stated timeline? It’s possible for a CRO to bid on costs for a site mix that won’t meet the enrollment timeline. This extends timelines and adds additional cost at the back end of the trial, so be sure that the CRO has noted that extra cost in the proposal. All assumptions need to be confirmed with the potential CROs, not just the number of patients and sites.
  3. Ask about who incurs the costs if the project manager changes during the trial. This happens commonly in large CROs; the project manager takes another position mid-trial and a new project manager takes over. If it does occur and the PM has a learning curve, will the CRO foot the bill? Or will the sponsor foot the bill?
  4. Ask about change orders. Changes occur mid-stream during many oncology trials. If they’re changes initiated by the sponsor and the CRO bid on units, the additional costs that the sponsor will incur can be easily calculated. If the bid was not done on units, then ask how change order costs are calculated. Also ask about the circumstances in which the CRO has the ability to initiate change orders that increase costs, and if so, who foots the bill (it isn’t always who you think).

Competition amongst CROs is increasing. Many are open and transparent and are great partners for taking your drug through the clinic. But we’ve found that some resort to more aggressive tactics to win your business on the front end, producing an end result that isn’t what you expected, and much more costly than the initial bid.

This puts a greater burden on the sponsor during the trial planning and CRO selection process. Medelis is a strong advocate of open and transparent bidding. If you’re burdened with interpreting proposals with substantial variances on costs, ask for transparency and unit costing.

And feel free to contact us. We’d be happy to walk you through our transparent, unit-cost-based approach.