Patient enrollment may be the single most important factor in ensuring the timely execution of clinical drug research. So when we negotiated risk-reward incentives for a trial evaluating a treatment for major depressive disorder, signing up participants accounted for most of the performance incentive structure: a significant double digit percent bonus (or penalty) tied to U.S. patient sign-ups and a little less for each of the other two countries in the trial.
Risk-sharing agreements between sponsors and contract research organizations (CROs) are becoming increasingly common, and it’s a constructive trend in an industry ruled by project deadlines and rising costs. These arrangements focus both parties early on the elements most important to ensuring a successful trial and motivate the CRO team to perform — and to remain intact in a business known for rapid staff turnover.
Having participated in a lot of these, we like to avoid the term “risk” in describing what are more accurately opportunity-sharing arrangements. Risk implies penalty, but in truth, the last thing sponsors would want is to exact fines when their research partners fail. These agreements instead should emphasize incentives for compliant or superior performance — payments the sponsors make gratefully as their projects proceed on or ahead of schedule.
Integral to the negotiation
Incentives have evolved in recent years from an afterthought — something sponsors tacked on near the end to help close the deal — to an integral part of the negotiation process. Seeing great potential for mutual benefit, we sought to formalize their role by identifying the terms we would consider for inclusion. Our approach generally ties a percentage of the contract value (or, alternatively, our project management fee) to achievement of milestones that include time from contract award to opening of the first study site (or first patient screened), date of database lock relative to last patient last visit, and percentage of sites activated within a prescribed period.
We were also careful to identify ideas that are strictly off the table, such as penalties without corresponding rewards (yes, it’s been suggested) and payments connected to royalties from future drug sales (a long wait for an uncertain return). And there are other performance measures we avoid — mostly factors beyond our control such as late reviews and approvals and customer-induced delays from any number of origins.
We share incentive payments with our project teams in the form of bonuses. Continuity is important to ensuring successful study outcomes, but contract research is a famously transient business — and bonuses motivate our employees to stay on the team. The approach paid off in a recent Eastern European trial of an adult schizophrenia drug: Our incentivized team moved up the timeline for the 400-person study, and every member stuck around for its full 22-month duration.
Of course, many factors drive high-functioning teams, and bonus payments alone cannot provide the impetus needed to motivate people to the highest levels of performance. Successful trials also must draw from the satisfaction of collaborating with talented colleagues and teaming with sponsors on work that has the potential to advance science, cure disease, and improve lives.
A structured approach
In maturing an ad hoc process into a structured approach, we arrived at several fundamentals the CRO and sponsor must agree on to ensure that both parties share equally in benefit and risk. For our part, we’ll take on risk only at a level commensurate with the control we have over the study’s execution, looking at things such as:
- Protocol design
- Site selection
- Level of feasibility assessments to be performed
- Operational strategy, including recruitment plans, monitoring, strategy, data management platform and process, and statistical analysis planning
Ours is a value-driven industry, and a clinical development company that bills itself as a low-cost provider is offering customers a false economy. Our aim is not to be low-cost, but to offer customers who are highly motivated by schedule and performance the greatest value by delivering high quality on an accelerated schedule, helping get new treatments to market faster.
Growing use of incentive payment models is strengthening the climate of partnership between sponsors and CROs and promises important advances as pharma companies and biotechs expand the development of innovative treatments.
Filed Under: Drug Discovery
