Fixed cost deal gives CRO cut of sales if Ph III ends early

03-May-2011 - Last updated on 04-May-2011 at 08:59 GMT

CRO Health Decisions has inked a fixed cost outsourcing deal that uses profit sharing as an incentive to finish the trial early.

For each month ahead of schedule Health Decisions completes the Phase III trial it will receive a small proportion of product sales from the sponsor, Evofem. Equally, delays and extra costs will affect Health Decisions’ margins as Evofem has agreed a fixed price for the work.

“We have seen firsthand creeping costs, delayed enrolment and extended study timelines with previous studies”, said Joe Pike, CEO of Evofem, in a press statement. Pike is confident Evofem is now free from these problems and will “reward Health Decisions for even greater results”.

“The deal places the burden of performance on Health Decisions”, Michael Rosenberg, CEO of the contract research organisation (CRO), told Outsourcing-Pharma. To manage this burden Health Decisions will use technology and an adaptive approach, to both design and operations.

A technologically driven adaptive approach to clinical trial design and operations has allowed Health Decisions to move away from the time and material model. Experience running clinical trials using this model makes Rosenberg “confident and willing to shoulder responsibility”.

Future risk sharing deals will be driven by a strategic development division Health Decisions finalised in recent months. Creation of the unit formalises the large amount of consulting Health Decisions now performs on most projects.

Evofem deal

The agreement with Evofem is the first time Health Decisions has used the fixed cost model for a large project. Health Decisions plans to recruit 2,800 patients for the Phase III trial, using 60 sites spread across up to eight countries, said Rosenberg.

Evofem is involving Health Decisions in design, regulatory and strategic elements of the clinical trial, which has an estimated primary completion date of October 2013. Health Decisions involvement extends to helping formulate clinical trial protocols.