Is the Clinical Research Enterprise in Decline?

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

Susan Kling FinstonIt looks like the ‘new normal’ is not just for biotechnology startups and SME pharma companies  – the CROs (and other vendors) who previously benefited from better R&D funding streams also feel the chill of the ongoing funding freeze.

Discussions with CROs and research consultants in the US and abroad reveal concerns relating to lengthy delays between initial discussion of research and final approval, reduced budgets for research programs, and generally falling demand for CRO services.  Their concerns are not just anecdotal.  A recent National Academy of Sciences (NAS) study sees the U.S. Clinical Trial Enterprise in particular as in decline:

There is ample evidence that U.S. trials are be-coming more expensive (DeVol et al., 2011). Worse, 90 percent fail to meet enrollment goals, and additional evidence points to disillusionment among American investigators (Getz, 2005). The rate of attrition among U.S. investigators is increasing, even among experienced researchers with strong track records of productivity, while 45 percent of first-time investigators abandon the field after their first trial. The system has become so inefficient that even the NIH is offshoring clinical trials at a substantial rate (Califf, 2011; Kim et al., 2011), using taxpayer funding to conduct trials in countries with less expensive and more efficient CTEs, despite concerns about generalizability as noted above.

The EU has seen a 25% decline in registration of new clinical trials and has begun a legislative process to improve the research environment in Europe. More broadly, an interesting Canadian clinical trial survey available here, shows a decrease in trials and related sites globally between 2008 – 26,241 sites and 990 trials – and 2010 – 22,358 sites and 760 trials respectively.  While finding increases in clinical trial activities in developing countries in Asia, they note the overall global trend of reduced clinical trial starts.

So the fundamental realignment of early-stage biotech valuation that makes it more challenging for start-ups and SMEs also has had unintended consequences for Clinical Research Organizations (CROs) providing pre-clinical and clinical research services.  And research budgets are falling across the board, more broadly, as larger companies and even public research institutions face cost containment pressures.

Given the critical importance of the clinical research enterprise for generation of social and economic good, it will be interesting to see how policy makers respond and / or if the market will rebound if economic growth increases.

About the author:

President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, s and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit

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