Key Takeaways | Clinical Trial Site Management Organizations (SMOs)

Top takeaways included:

• Investors Are Excited by Site Platforms Because of Their Unique Position in the Industry and Lack of Reliance on Third-Party Payor Reimbursement. Site Platforms have features reflecting the life sciences/pharma services sector and traditional provider sector (e.g., physician practices or ambulatory businesses). While their customer base comprises life sciences companies, dedicated clinical trial sites have structures and operational characteristics that are reminiscent in many ways of managed physician practice platforms. Site Platforms also have the advantage of not being exposed to the risks and operational challenges associated with government and other third-party payor reimbursement. The life sciences sector continues to devote substantial resources to R&D. For these reasons, the clinical trial site space is an enticing area for investors.
• Diverse Patient Access, Consistency Across Sites, and Efficiency Are Compelling for Investors. When evaluating whether to invest in a Site Platform, investors will consider the Site Platform’s ability to operate uniformly across its various locations (as applicable) and opportunities to enhance such consistency post-closing, which may include centralizing functions to better balance the burdens on specific sites. Additionally, having access to a large volume of patients is attractive, but it is important for the Site Platform to be able to identify and recruit diverse patient populations, especially in communities where the disease prevalence is high and given FDA’s focus on improving diversity in clinical trials. Some Site Platforms have successfully enlisted community champions who are representative of the patient population or speak their language to engage with these communities, build trust and boost enrollment in trials. Investors may also focus on the Site Platform’s efficiency, which includes the pace at which it can identify eligible participants.
• When Scaling a Site Platform, Focus on Quality. Robust quality assurance programs are key for Site Platforms as they grow their operations and acquire additional sites. This includes standardized policies, procedures, training, and other infrastructure to ensure quality and consistency across the organizations and deployment of applicable best practices; regular internal monitoring to evaluate metrics, assess compliance with regulatory, sponsor, and internal requirements and implement remediation activities as necessary; and the involvement of experienced legal and operational subject matter experts to guide the sites. Study subject access and efficiency are certainly important, but Site Platforms should focus first on building and implementing such quality assurance infrastructure across sites, particularly as studies become increasingly complex.
• IROs Have Unique Advantages. An IRO is a type of SMO that is embedded within hospitals, physician practices, and other provider organizations and supplies the entire clinical trial infrastructure that the provider will need to successfully run a clinical trial program, excluding the principal investigator (PI). IROs may have access to the provider’s electronic medical records system at the point of feasibility, allowing the IRO to assess whether the study is right for the provider before moving forward. This has the added benefit of allowing the IRO to identify patients from the provider’s existing patient population rather than recruit externally. An IRO may enter into a triparty contract with the provider and the sponsor (or contract research organization) and has authority to negotiate on behalf of the provider, which makes negotiating terms and committing to an enrollment headcount easier, because the IRO has systematized the contract review process and has visibility into study feasibility. IROs offer an attractive option to providers that otherwise do not have the resources or appetite to build a sophisticated research infrastructure on their own.
• Private Equity-Backed Site Platforms Have Largely Escaped Recent Scrutiny But Should Stay Vigilant. Regulators, lawmakers and several state attorneys general have upped their scrutiny of private equity in physician practice management. So far, the clinical research industry has been largely spared from the resulting governmental pressures, but Site Platforms should pay attention to these developments and stay prepared. For now, Site Platforms should focus on tracking reliable data that can show the organization is adding value and resulting in better outcomes for patients and for the healthcare system as a whole.