President of Frenova, Kurt Mussina, discussed the changing landscape of clinical research sites with Applied Clinical Trials. Here is a summary of his thoughts about the major trends and challenges affecting sites, and how to navigate the landscape as consolidation appears more and more imminent.

Why Are Clinical Research Sites Consolidating?

As industry consolidation increases, a reasonable place to start is: Why are sites consolidating? What’s the benefit? The answer: Private equity (PE) firms are responding to a market opportunity.

PE firms are attempting to address inefficiencies in clinical trials by acquiring multiple clinical trial sites. Currently, clinical trial sites are part of a highly fragmented market. PE firms often see fragmented and inefficient markets as investment opportunities. Their deep experience in consolidating markets often fosters greater efficiency. For example, PE firms will approach stand-alone sites to subsequently roll them up in combination with several others. If site owners want to be acquired, now is a good time to update and organize company and financial information should suitors come calling with a potential deal. Now is also a good time to pitch sites to PE firms for a potential investment or merger.

Alternatively, stand-alone sites that wish to remain independent need to find methods to increase their efficiency. One approach is creating an alliance of stand-alone sites that achieves similar efficiency gains, such as centralizing business development, accounting, HR and IT. For Principal Investigators (PIs) in this position, converting such an alliance into a single operating business provides the most flexibility. In addition, a working operating business drives a higher valuation if the PI chooses to eventually sell to private equity.

Site consolidations have already started. All stakeholders would do well to prepare for a future as this trend continues to shift the site landscape.

Consolidation Is an Answer to the Challenge of Clinical Trial Recruitment

A fair question to ask is, “How does consolidation solve patient enrollment inefficiencies?”
One of the biggest barriers to clinical trial site efficiency is patient enrollment. From identifying eligible patients to actively pursuing clinical trial recruitment, sites are currently finding the enrollment process very challenging. Therefore, both sponsors and sites can benefit from more efficient patient enrollment.

In his Applied Clinical Trials discussion, Mussina provided a simple thought experiment: “Would you rather bring 100 sites into a study that gets you 100 patients, or would you rather bring in five or 10 sites that deliver you those 100 patients?” The math is simple. By consolidating sites, hitting enrollment numbers becomes simpler, while also reducing the administrative burden of coordinating multiple sites. For a sponsor, such simplicity is very attractive.

What CROs Can Teach Clinical Research Sites About the Future

The CRO market provides an example of an industry that is slightly ahead of clinical research sites in market progression. Not very long ago, the CRO market was also very highly fragmented. Private equity poured money into the CRO space. The large CROs attained their size and preserved their operations by aggressively pursuing merger and acquisition activity as the field consolidated. In short, the CROs that prioritized the development and expansion of their business first and foremost performed the best.

While some PIs may believe their clinical research site to be something different, the history of CROs shows that clinical research has a business side as well. In order to stay viable, it must stay profitable. The sooner that PIs operate under that assumption, the better prepared they will be for the near-term future. Stand-alone sites are likely to become the exception rather than the rule. The most likely scenario will parallel CROs — some very large site organizations will become dominant players in the industry, servicing many different locations. Note that there will still be independent and smaller sites, but only those that plan to adapt to a consolidating industry will be able to preserve their status.

Clinical research sites, site staff and PIs all should look to this history of CROs to prepare for success, whether they are joining a consolidation or remaining independent. Everyone in the industry must plan for a future where the global consolidation trend continues to increase.

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