Examination of Clinical Trial Costs and Barriers for Drug Development. 3.3 Costs by Cost Component

07/25/2014

Table 2 presents clinical trial costs by cost component across all therapeutic areas by trial phase. Similar to our evaluation of costs by trial phase discussed in Section 3, when averaging costs across therapeutic areas, we weighted the data by the number of contracts available by therapeutic area. Excluding the All Other Costs and Site Overhead cost components as these are extrapolated numbers, in Phase 1, Clinical Procedure Costs ($476,000) are the highest, followed by SDV costs ($326,000) and Central Laboratory Costs ($252,000). In Phase 2, expenditures that contribute the most to overall costs in descending order include Clinical Procedure Costs ($1.5 million), Administrative Staff Costs ($1.3 million), Site Retention Costs ($1.1 million), Site Monitoring Costs ($1.1 million), Central Laboratory Costs ($804,000), and RN/CRA Costs ($441,000). Even though they are still sizable and higher in absolute terms than those in Phase 1, SDV Costs only constitute three percent (= $406,038 ÷ $13.35 million) of total per-study Phase 2 costs whereas in Phase 1 their share of total per-study costs is around nine percent (= $326,437 ÷ $3.80 million). Similar to Phase 2, Clinical Procedure Costs ($2.3 million), Administrative Staff Costs ($2.3 million), Site Retention Costs ($1.3 million), Site Monitoring Costs ($1.6 million), Central Laboratory Costs ($849,000), and RN/CRA Costs ($940,000) contribute the most to overall per-study Phase 3 costs. In Phase 4, Administrative Staff Costs ($3.3 million) rank the highest, followed by Site Retention Costs ($1.8 million), and Clinical Procedure Costs ($1.7 million). While not insignificant in dollar terms, Patient Recruitment Costs only account for 1.7 to 2.7 percent of overall costs across different clinical trial phases.

Table 2: Clinical Trial Costs, by Cost Component, Phase, and Therapeutic Area [a] [b]

Cost Component Phase 1 Phase 2 Phase 3 Phase 4
$ % of Subtotal $ % of Subtotal $ % of Subtotal $ % of Subtotal
Data Management Costs $50,331 ($8,467) 2.36% $59,934 ($21,060) 0.79% $39,047 ($19,416) 0.34% $49,702 ($9,489) 0.44%
Cost Per IRB Approvals $11,962 ($6,305) 0.56% $60,188 ($16,092) 0.79% $114,118 ($46,404) 1.00% $137,813 ($112,543) 1.21%
Cost of IRB Amendments $1,094 ($255) 0.05% $1,698 ($447) 0.02% $1,919 ($277) 0.02% $1,636 ($302) 0.01%
SDV Costs $326,437 ($65,659) 15.32% $406,038 ($80,573) 5.34% $400,173 ($66,429) 3.52% $353,602 ($62,942) 3.10%
Patient Recruitment Costs $37,050 ($21,666) 1.74% $161,140 ($102,066) 2.12% $308,672 ($174,702) 2.71% $298,923 ($252,042) 2.62%
Patient Retention Costs $6,145 ($4,745) 0.29% $15,439 ($6,970) 0.20% $24,727 ($15,868) 0.22% $30,568 ($40,466) 0.27%
RN/CRA Costs $178,237 ($90,473) 8.36% $441,053 ($140,390) 5.80% $939,540 ($614,943) 8.25% $820,775 ($880,644) 7.20%
Physician Costs $109,681 ($57,626) 5.15% $381,968 ($117,217) 5.03% $805,508 ($499,426) 7.08% $669,464 ($402,072) 5.88%
Clinical Procedure Total $475,667 ($371,586) 22.32% $1,476,368 ($633,448) 19.43% $2,252,208 ($1,033,618) 19.79% $1,733,576 ($2,251,401) 15.22%
Central Lab Costs [d] $252,163 ($203,342) 11.83% $804,821 ($313,577) 10.59% $849,180 ($600,134) 7.46% $419,758 ($377,823) 3.68%
Site Recruitment Costs $51,904 ($32,814) 2.44% $233,729 ($83,799) 3.08% $395,182 ($195,983) 3.47% $168,343 ($101,311) 1.48%
Site Retention Costs $193,615 ($79,974) 9.09% $1,127,005 ($544,068) 14.83% $1,305,361 ($1,382,296) 11.47% $1,835,341 ($1,335,892) 16.11%
Administrative Staff Costs $237,869 ($128,547) 11.16% $1,347,390 ($427,859) 17.73% $2,321,628 ($1,910,047) 20.40% $3,323,081 ($2,534,406) 29.17%
Site Monitoring Costs $198,896 ($128,142) 9.33% $1,083,186 ($392,798) 14.25% $1,624,874 ($717,034) 14.28% $1,549,761 ($979,371) 13.60%
Subtotal (in $ Million) $2.13 ($0.86) 100% $7.60 ($1.46) 100% $11.38 ($4.93) 100% $11.39 ($8.53) 100%
Site Overhead [c] $528,685 ($235,862) NA $1,741,811 ($302,049) NA $2,541,313 ($1,091,082) NA $2,575,007 ($2,082,161) NA
All Other Costs [c] $1,139,887 ($468,077) NA $4,003,615 ($752,108) NA $5,967,193 ($2,577,692) NA $5,986,008 ($4,543,505) NA
Total (in $ Million) $3.80 ($1.56) NA $13.35 ($2.51) NA $19.89 ($8.59) NA $19.95 ($15.15) NA

NA = Not applicable. Note that the reported numbers represent weighted average costs and standard deviations.
[a] The numbers in parentheses represent standard deviations. [b] The cost for each phase assumes that a single trial (i.e., study) is conducted. [c] These are extrapolated figures based on those cost components for which estimates were available from Medidata. [d] Please note that Phase 1 study sites tend to have inhouse or local labs as opposed to central labs.

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