Meeting The Clinical Supply Challenge: Intelligent IRT!
Meeting the challenges of clinical supply management demands smart thinking and a clear understanding of the issues. I start with the premise that IRT should be free for most studies. Now, I’m not saying our customers should not pay, I’m just saying that it should save you enough money over the course of the study to pay for itself.
One trillion dollars. That's the revenue of pharma in 2015. Pharma is very R&D intensive, so on average about 15% of revenue is invested in R&D. That means 150 billion invested in R&D alone. And almost two thirds of that goes into clinical trials, or 90 billion dollars! About one third of that goes into clinical supply spending – 30 billion dollars are invested every year!
Unfortunately, we waste a lot of that investment because there is a lot of waste in clinical supply management.
We looked at 200 studies that finished over the last two years. Out of those studies, 62% of the material packaged and released was actually not used. Basically two thirds of the supplies never actually made it to a patient!
So what are the clinical supply costs? Basically two categories. Drug costs – everything from production, to packaging and storing. Then we have costs in shipping drugs to the sites.
There are fixed costs and variable costs. For example, if you have a thousand patients, getting three kits each, that’s 3000 kits you need to produce. But you also need to produce an overage, because we don't know where those 1000 patients are going to be and when, so we need to ensure that we have medication there – to manage the whole drug supply, to have buffers, to make sure that sites don't run out of drugs.
So we have the overage problem on the drug costs, plus shipping costs.
For overage, we must ask ourselves what drives the high overage costs? And its not as simple as saying you can run with 40% overage or 100% or 200%. Every study is different. If you have very few dispensing visits that means you can forecast less. If you have a high number of sites with many depots those changes are hard to anticipate, and short expiration dates mean that you need to replace the drug quite often.
Sometimes you can start to ship once a patient is screened. Then you have a possibility that that drug is going to be used accordingly, but that depends a lot on the study design. Very often that initial shipment is mostly buffer stock and you’re really not sure it's going to be used. Or based on predictions in place for recruitment – if a site is really expected to be a high recruiter – the site shouldn't end up with few patients in the end.
What we've seen, when we looked at the data, is that there are 10% to 15% of sites that never recruit a patient – some of which are initially considered high recruiters. The key is getting accurate information upfront. Look for recruitment rates, number of patients screened, number of patients randomized. The more information you have in your system on patients, the more accurate you can be.
Savings with overage can be huge. As an example, let’s take a global study with 100 sites. Say twelve thousand kits are needed, so 1000 patients need monthly kits for one year. The drug cost is $100 per kit. if you go for a 200% overage as a baseline, and you can reduce it to 50, your savings are 1.8 million. If your IRT can help you achieve those savings, then you're not paying 1.8 million for an IRT system!
What are the drivers for shipping costs? It's how much time you have, on average, between two shipments to a site. If you can increase that time duration, that means less shipments. We use the term resupply interval as the average time between two shipments to a site.
Another important term is what I call time margin. If you want to reduce the amount of shipments, you basically have two options. One is to reduce time margin. You want to make sure that you trigger your resupply shipment shortly before the stock out. But you don't want to trigger a shipment that doesn't get used for another 60 days.
Another way to impact your resupply interval is by shipping more drugs. If you ship more drugs, they should last longer, and you’ve extended the time between shipments. Of course, you have to be careful, because if you ship too much, that increases your risk of using too much drug, and wasting too much drug at the site.
But in general if you ship more drugs, that site stock increase usually results in increasing the resupply interval, and decreasing your shipment costs.
So, you can reduce shipment costs if you produce a bit more drug and ship more. You can reduce your drug costs if you ship more often and keep that buffer low. But you can actually achieve, more or less, both at the same time as well. It doesn't have to be a trade off.
What does that mean in terms of cost? For example, let’s say you have 100 sites in a 3-year study. Assume shipping costs of $500 per shipment. If you can increase a 30-day resupply interval to 60 days, cost savings here are almost a million dollars! Again, quite a lot more than your IRT would cost you!
Why is it all so challenging? Why do we have so much overage in studies? Why do we ship so often? Because initial planning is very hard. Even if you do simulations up front, and your assumptions aren’t correct, your initial planning might be quite a bit off. It's very important to make sure that you plan and evaluate regularly, to be as accurate as possible.
So what's the solution? I call it Intelligent IRT. It has been said that computers are fast, reliable, and stupid. We need to make them more intelligent, so that we don't have to rely on that human resource, because doing that is very time consuming, and expensive. We need more intelligent solutions.
We need make sure that the study drug simulation and IRT are fully integrated – that from the very beginning, IRT is in line with your overage strategy, your simulation and the settings. The simulation results should drive your IRT strategy and your IRT supply data should align with your simulations.
Intelligent IRT makes it easy for sponsors to track supplies. Having four dashboards, having alerts, making sure that you know up front when you need to initiate more packaging, understanding how much will need to be sent to specific depots based on all the information available, is all very important.
Intelligent IRT can save you more money on the supply side than it costs to set up the IRT system in the first place – through reduction of overage and reduction in the number of shipments.
Preventing over-recruitment can impact cost as well. Intelligent IRT can help reduce the work at the sponsor site and reduce manual checks, which are time consuming and costly.
Reducing inefficiencies, inaccuracies and human error in clinical supply management. It’s all part of Intelligent IRT.