Ghost in the Machine

Regulatory bodies in Canada and in the US have yet to create specific rules for contract research organizations.


Regulatory bodies in Canada and in the US have yet to create specific rules for contract research organizations.

INSIDERS CALL them a necessary evil, spawned by an industry that has itself been cast as the devil. “I prefer to call us the ghost that provides pharmaceutical companies full-service management of clinical trials,” says Paul Keown, founder of Syreon Corp., a Vancouver-based contract research organization (CRO) that has capitalized on the increased industry outsourcing of drug testing. “Clinical trials take a lot of time, money, effort and scrutiny so we try to take away those hassles, from ethical approval to safety monitoring to meeting with regulators like the FDA [U.S. Food and Drug Administration] so that a drug can be approved.”

The public is largely clueless that temps are now key figures in the long, bumpy and occasionally deadly process of getting a drug from the lab to their medicine cabinets. That process typically takes about 15 years and costs as much as $1.2 billion, with only one in 5,000 drugs making it to market. That’s if it makes it past the human trials phase. The average clinical trial takes 780 days to complete, from initial protocol design to trial close-out, and typically costs a pharmaceutical client about $2 million to $3 million, according to Keown. Even then – after the involvement of hundreds of researchers and volunteer patients – fewer than 10 per cent of drugs will make it from clinical trial to market.

Managing such a trial involves budgeting, contract negotiations, the ethical approval necessary to green-light a study, physician and patient recruitment, site monitoring, data collection (everything from basic demographics to blood tests to measurements of adverse drug reactions) and meetings with sponsors and regulatory officials. Outsourcing this ordeal to a private firm can speed up the process by 30 per cent, according to one industry estimate. That means less time to get the drug to market, which means more market revenue potential for a drug-maker. Keown says a Syreon-run project cuts costs by 10 to 20 per cent compared to a pharmaceutical company’s in-house trials or those conducted at universities or hospitals, saving up to $500,000 on average.

Canada has become a hot spot for clinical trials because we offer a rare combo of world-class medical resources and researchers and cost savings. As of 2004, it was 22 per cent cheaper to run a trial here than in the U.S., according to a report by KPMG International, a Swiss-based auditing firm that ranked us number one in the world for cost savings. As I write this, pharmaceutical companies are conducting some 30,000 clinical trials around the globe; the majority are part of multi-centre trials involving dozens to hundreds of “investigational sites” around the globe. Canada has the third-highest volume of trials at 3,180, after the U.S. (15,933) and Germany (3,461), while in B.C. there are currently 1,726 trials underway.

“Over the past 60 years, there have been many shifts in drug testing methods,” says Keown. The process has evolved from small in-house trials in the 1950s to innovative drug development programs built by university- and hospital-based researchers in the 1960s (primarily with government funds) to today’s preferred model of patchwork multi-centre trials, which started in the 1990s and relies primarily on community-based doctors testing drugs on their patients. Both in-house and academic drug trials are still conducted, but industry has downsized R&D departments while the number, complexity and expense of drug trials has increased with what Keown calls “a focus on blockbuster drugs” and what watchdogs peg as Big Pharma’s obsession with profits. Full-service CROs have sprung up to fill in the gap.

Big Pharma now outsources approximately two-thirds of its clinical trial management to more than 1,000 CROs around the globe. These CROs were the recipients of about US$17 billion of industry R&D spending in 2007, with annual spending growing by an estimated 15 per cent. In Canada clinical trials accounted for about 40 per cent of the $1.3 billion spent on R&D in 2007. The majority of CROs operating in Canada are large U.S. multinationals, with each of the global top 10 – among them, Quintiles Transnational Corp., Covance Inc. and Kendle International Inc. – now having branch offices here. Only five are Canadian-owned, including B.C.-based Syreon and ASKA Research (headquartered just down the hall from Syreon). While Syreon primarily works directly for Big Pharma, ASKA has forged partnerships with CROs based in other countries that are looking for cross-Canada links to our researchers, doctors and patients. [pagebreak]Paul KeownTHERE ARE NO Canada-wide statistics on CRO use, but they are now involved in roughly 40 per cent of the industry-initiated trials run through the Vancouver Coastal Health Research Institute, the UBC-led organization overseeing trials at Vancouver hospitals. The increasing spread of CROs and their dominance of clinical research has caused increased scrutiny of CRO conduct and concern that this for-profit model creates a raft of conflicts of interest for researchers, endangers trial participants and pushes the boundaries of commercialization and privatization of all aspects of drug development. Regulatory bodies such as Health Canada and the FDA have yet to create specific rules for CROs, so anyone can put out a contractor shingle. The onus for good clinical practice now lies in the hands of the big drug-makers – corporations that can shop around for the lowest bid, hire for-profit research ethics boards and pressure our physicians and university- and hospital-based researchers to push drugs and guinea pig Canadians with unnecessary and even dangerous experimental drugs.

“There are bad apples out there,” acknowledges Keown of this burgeoning field as we sit in a large boardroom at his spacious west-side Vancouver office, with 180-degree views of the city and mountains. “But we’ve invested a huge amount of time, effort, money and care in building quality assurance and training programs. Clinical trials are incredibly expensive, so it’s imperative that the process runs smoothly and efficiently and also provides quality data.” The 61-year-old has been active in clinical research for more than 30 years, first doing basic research as a med student at the University of Manchester. He jumped the pond in 1975 to help start up an organ transplant department at the University of Western Ontario, coming to UBC in 1987 to set up a province-wide transplant program there.

Keown envisioned a computerized data management system that could capture the reams of clinical trial data, including patient demographics, diagnostic tests (ranging from blood work to MRIs), adverse drug reactions, audit trails (to track data changes), edit checks (to minimize entry errors) and treatment outcomes. By the early ’90s, he had found a software developer to realize that vision and put the computer program to work on an arthritis trial, which drew interest from pharmaceutical companies. Syreon was established at UBC in 1995 and is now a full-service CRO with 30 core employees, including biostatisticians and IT specialists managing computer data and trainers and project managers who write trial protocols, recruit physicians and their patients and produce trial wrap-up reports. Syreon also contracts a 50-person network of site monitors in North and South America, Europe, Asia and the Middle East, and the company is linked to 300 Canadian physicians who participate in trials as “site investigators,” collecting data on drug efficacy among their patients. The company manages 10 to 20 trials at any one time in up to 40 countries around the world, contracted by what Keown describes as “a small but elite portfolio” of most of the big industry developers: F. Hoffmann-La Roche Ltd., Novartis AG, AstraZeneca PLC, Abbott Laboratories and Merck & Co. Inc.

“We know exactly what they need and can put their procedures and protocols into place relatively quickly,” he says. “But one of the most important time-saving factors is that we can often get one single ethical approval for these [multi-centre] trials through a commercial research ethics board.” This is perhaps the most controversial aspect of trial outsourcing. By law, a research ethics board (REB) must approve the plans for any clinical trial before it can begin, and this has traditionally been done by university- and hospital-based review boards. But contract REBs have sprung up to service the outsourced clinical trials. Critics believe these for-profit REBs (called institutional review boards in the U.S.) have fundamental conflicts of interest as industry guns for hire and can be pressured by a CRO (or its pharma client) that’s shopping around for a favourable review.

“I have concerns that the level of scrutiny isn’t as high with these trials as at universities,” says John Hepburn, UBC’s vice-president of research, which manages industry funding of all clinical research at the university. His office has seen funding drop from a $50-million high in 2005-06 to $39 million in 2007-08, with the number of industry-funded clinical trials decreasing from 461 to 348 over the same period. “We’ve seen a steady decline for several years,” he says. “Industry complains about the complicated process with university bureaucracy, especially contract negotiations and ethical review. Drug companies are working more with private firms and offshore because universities and hospitals live in a much more complex regulatory regime than private CROs. We hear of contract research ethics boards owned by people closely affiliated with the CRO running the trial. That’s like a property inspector working for a real estate agent.”[pagebreak]UNIVERSITIES AND HOSPITALS, each with their own internal REBs made up of volunteer staffers, are by comparison independent bodies. “Academics usually end up on the ethics committee by default,” says Keown of REB volunteering at UBC, which is quite like being on a jury: for many, a dreaded civic duty. “It’s incredibly hard work, very gruelling, and many of the members have no medical background, so the process is exceedingly slow, particularly with multi-site trials that necessitate reviews from dozens of REBs.” Trials run outside institutions, called “community based,” typically get speedier approval because they have dedicated staff. Syreon, for instance, works primarily with Western Institutional Review Board Inc., based in Olympia, Washington, which now approves about 5,500 trials annually around the globe, including 127 in Canada and 32 in B.C. during 2008.

Watchdogs are particularly concerned that these private firms are increasingly monopolizing clinical trial research, and the entire CRO industry has come under scrutiny for a wide range of dubious practices over the past decade. In one case, Miami-based CRO SFBC International Inc.conducted trials at a converted motel in Miami with undocumented immigrants as trial participants, drawing heat from U.S. regulators and media; the site was closed in 2006, but the company still operates under the name PharmaNet Development Group Inc., a CRO SFBC purchased in 2004. PharmaNet also owns Anapharm Inc., a large Quebec City-based company that got into regulatory hot water in 2006 after a trial participant with TB infected 20 other people.

“This field is rife with conflicts of interest,” says Graydon Meneilly, UBC’s dean of medicine. “Frankly, I think that the pharmaceutical industry doesn’t want the scrutiny that comes with partnering with academic centres. It’s easier to work with a clinical trial factory in the middle of nowhere. There’s also the possibility that sponsors pad a physician’s budget to engender goodwill. Same goes with the for-profit CROs, which calls to mind a Yiddish term, ‘vigorish’: a charge that a bookie takes on a bet.”

These high-risk trials are a gamble for everyone involved, and, with billions of dollars at stake, commercial interests have infiltrated doctors’ offices and the hallowed halls of academia. Pharmaceutical companies pay community-based physicians about $1,000 to $5,000 per patient they recruit, with the CRO often collecting and distributing the funds. Some doctors can make as much as $22,000 per patient, depending on the complexity of the patient screening and lab equipment required. With university- and hospital-based trials, the drug-maker provides doctors a lump-sum payment, with the university taking a percentage of that money back as “overhead recovery” (25 per cent in the case of UBC-affiliated research). In 2007 physicians in UBC’s department of medicine received trial funding ranging from a few thousand dollars to $1 million for a Pfizer-sponsored HIV trial.  Meneilly, whose medical faculty received 65 per cent of the industry dollars going to UBC trials in 2007, acknowledges that “everyone is vulnerable. When industry funds anything, whether it’s a dinner or a clinical trial, it influences the thinking of people; they can become predisposed to that company.”

Keown concurs and says that Syreon insists all participating doctors and researchers are trained with international clinical practice standards. He thinks there should be a Canadian accreditation system for CROs and for-profit REBs to weed out the bad apples and reward those companies that strive for high quality control, “so that all researchers benefit and the public has the most innovative and safe treatments available. Our sponsors would love to do their clinical research here in Canada for all the right reasons: the expertise of our physicians and the quality of our research,” says Keown, who holds various other appointments including chief medical officer at UBC’s PROOF Centre of Excellence for organ failure research. “But we’ve got to be able to do it more quickly and at a reasonable cost.”[pagebreak]JOHN HEPBURN UBC Research agrees and says, “UBC is trying to become more attractive to industry, and we’re working to fix the bureaucratic problems.” He notes that the university hired a full-time staffer to oversee ethics review and has created a separate pediatric research review board. It is also supporting a B.C.-wide ethics approval process that will, in principle, adequately safeguard patients, fund local academic researchers and appeal to an industry that is increasingly globalizing and consolidating.

Earlier this year, industry heavies Merck and Pfizer Inc. announced plans to gobble up Schering-Plough Corp. and Wyeth, respectively, for a collective total of US$109 billion. That trend continues with CROs. In the past year, U.S.-based Pharmaceutical Product Development Inc. and Covance purchased R&D labs from Merck and Eli Lilly and Co., respectively, while two American firms snatched up Canadian-owned CROs: Ohio’s Kendle purchased DecisionLine Clinical Research Corp., a Toronto-based Phase 1 facility, for approximately $24 million; and North Carolina-based INC Research Inc. bought the clinical trial arm of Canadian bio-science company MDS Inc. for $50 million. At the same time, CROs in both Canada and the U.S. are increasingly working in countries such as India and China, where costs can be slashed by 60 per cent. “The big ‘advantage’ is the huge number of naive patients who have never been treated for their diseases – one of the tragedies of Third World societies,” says Keown. “It’s great that North America has regulatory protection, but we’ve made ourselves slow and expensive.”

Industry Canada continues to tout Canada to both the pharmaceutical industry and prospective CROs as a “boost-your-bottom-line” setting for clinical trials, even though Canada’s overall rank for cost savings slipped to fourth place according to a 2008 study conducted by KPMG International. Vancouver, in that study, ranked 80th. In order for us to remain competitive, stakeholders agree that there needs to be a concerted push to build stronger ties between local drug researchers and industry.

“We can’t survive in isolation, so several of us have been speaking on behalf of UBC to attract Big Pharma to invest in more clinical research,” says Keown. “And the pendulum is starting to swing back to academia. Big Pharma pipelines have been dry for years now, and many blockbuster drugs have had a short life and were taken off the market, like Vioxx. Industry is quite lost, and they’re recognizing they need our universities and hospitals to develop innovative products. These pre-clinical investments will likely lead to a huge burst of clinical trial activity in the next year.”

That should bode well for Syreon and its network of Canadian physicians and researchers. The company is also expanding its global presence by setting up a Montreal office later this year. “All our big clients are in Toronto, Montreal, New Jersey and Europe, and we hope to have offices in all of those locations soon,” he says.

What if a big CRO came knocking on his door with a buy-out proposal? “I love what I’m doing, but I will retire sometime soon,” says Keown. “If they come with a nice cheque, I’d certainly talk to them.”