Bart’s Corner: The Business of Pharmacovigilance
Some interesting reports came out recently from Market Research firms on the economic future of Drug Safety (DS) and Pharmacovigilance (PV).
They note that the PV market was valued at $2.4 billion in 2013 and is expected to grow at about 13-14% a year to total $5.8-$6.1 billion by 2020. Over 60% (~$1.4 billion) of the market was in post-marketing and phase IV trials. Phase III PV ($750 billion in 2013) is expected to grow at a higher rate than the post-marketing segment since there is now a push for more risk reduction and comparative safety evaluations in pre-marketing clinical trials.
Out-sourcing of PV is also growing and contract research organizations (CROs) now represent over ½ of the market for clinical safety. This segment is also expected to grow at a rapid rate over the next several years. The major drivers are coming from pharma companies who are looking for reduction in fixed internal costs, flexibility to react to increasing (or decreasing) numbers of SAEs and safety issues as well as smaller infrastructure functions (SOPs, data handling, databases etc.).
North America is the largest market for PV with Europe number two. However, Asia is increasing the most quickly for many reasons including lower costs there for clinical trials despite the distance from Europe and North America.
The PV software market is also growing though it is much smaller in size. It is estimated to grow at about 6% a year through 2020 and reach $154 million by 2019. Again, North America and Europe are the number one and two markets respectively, but with Asia and Latin America growing more quickly.
Finally, the Drug Regulatory Affairs out-sourcing market is also large and growing. It was estimated to be about $1.6 billion in 2013 and growing to $4.5 billion in 2020.
So what does this mean for employees, companies and CROs in the DS/PV space? Here are some thoughts.
- Large companies are consolidating and out-sourcing. From 2011-2013 there were about 30,000 layoffs a year and about 11,000 in 2014 as reported by one source.Another estimate puts the total layoffs from 2009-2013 at 156,000. Although it is hard to reconcile these very different numbers, the trend of more layoffs is clear and it is occurring not just in DS/PV which make up a small segment of the pharma industry. Larger cuts are being seen in sales forces and R&D.
- But in spite of these layoff numbers, it appears that PV and Regulatory are good areas for employment in the industry. Regulations are getting far more complex (e.g. the EU post-marketing PV modules from 2012 and more complex regulations in countries that formerly did not pay much attention to this). The job market is expanding though not necessarily in the US or Europe or in the pharma companies. Many of these jobs are being placed in Asia and elsewhere where costs are lower (though growing). The willingness (and ability) for an employee to move to a new location is a clear plus.
- Better jobs will be available to those with better skill sets. Hence the obtaining of a certificate or Masters Degree in PV or Regulatory will likely enhance the possibility of getting a more senior and higher paying position. I am not aware of any company or agency requiring such certificates or degrees but it is likely to occur someday.
- CROs are the exciting places to be for jobs. This is where pharma companies – both big ones with established PV departments as well as small and mid-sized companies with minimal or no PV department – are all out-sourcing. The creation of a new PV department in a small or mid-size PV company or start-up is time-consuming, difficult and costly. Barriers to entry, especially for those companies in a location where there is not a large pool of experienced workers, are high.
- PV jobs are largely transferable between and among big and small pharma, between pharma companies and CROs, and between clinical trial (pre-marketing) PV and post-marketing PV.
- PV jobs are much less transferable between drug/biologic and device areas as the safety problems that are seen as well as the regulations and requirements are very different and becoming more and more different as time passes.
- There are short term/interim/temp jobs available in PV around the US and elsewhere for those who won’t or can’t sign on for a permanent job. Many companies prefer to hire short to mid-term contractors rather than full dime employees. Set up a “google alert” for “drug safety” and for “pharmacovigilance” if you want to get an idea of jobs available.
- For workers in DS/PV it is now a good idea to have some sense of how the business of DS/PV works in order to better understand what organizations are looking for. It is also a good idea for folks already in DS and PV to track the way the business works to understand how it will impact them. For example, finding, bidding for and qualifying a vendor (CRO) is quite different now from the way it was some years ago. Many more business and finance personnel are now involved in this process and the decision on which CRO or vendor is less and less kept in the hands of the PV and DS groups. Some DS and PV personnel are now thinking about getting an MBA degree. Whether this will pay off in the long run is unclear.
- The rationale for those companies which out-source drug safety (and possibly other functions) are as follows:
- For small companies with one or two drugs in clinical trials and perhaps others in the pipeline but no marketed products, drug safety can often be handled in house with limited staff and with a home-grown database (or spreadsheet!) if the volume and complexity of safety issues and SUSARs are low.Very rapidly however, it becomes clear that dedicated PV will be required. The usual impetus for this is when the small company starts trials outside the US, EU (or their home country), when multiple CROs are involved (e.g. different CROs in different countries or continents) or when other pharma company partners join. These events exponentially increase regulatory and PV complexity and the company usually realizes that it requires out-sourcing or a larger partner company to handle DS/PV. The downside is that the company may lose some level of control. The next impetus to out-source is the first approval of an NDA/MS and the marketing of a new drug. Now post-marketing PV must be handled in addition to the ongoing clinical trials with other drugs and indications.
- For large and mid-size companies, the complexity of clinical trials, often made even more complex when more partners or CROs join is often a reason to out-source certain functions including PV.Larger companies may feel they can more efficiently handle PV by out-sourcing some “less critical” components such as safety reporting (SUSARs, SAEs, PSURs, DSURs etc.) for old established drugs with few or no safety issues and low volumes of SAEs. Newly approved compounds or new indications for older drugs are kept in-house. Marketed drugs with significant safety issues or high volumes of 15 day reports may also remain in-house.
- Other safety functions such as medical literature searching, database housing and maintenance, back-up etc. will often be out-sourced.
- As noted above, CROs are now big business and have become far more sophisticated and global than in the past as the industry consolidates. Some handle primarily DS and PV whereas others offer a larger array of services including clinical trial handling, data management, database maintenance, medical information, regulatory affairs, signaling, risk management etc. Some CROs are global and some are region specific (e.g. EU, Eastern Europe, Asia etc.). This out-sourcing is well accepted by regulators who recognize that for many companies, particularly small companies, there is no other way they could get their clinical trials, safety functions and reporting done on their own internally.
So the business of DS/PV has changed the way these functions are handled. What is not clear is whether this is good or bad or neutral for the public health, the companies and the workers. The message though for everyone in safety is to pay attention to the business world.