There is a significant discourse in the literature when estimating clinical trial costs due to the lack of transparency throughout the industry regarding the true expense of bringing a drug from bench to market. This has led to a growing demand to elucidate the costs associated with clinical trials, which is why leading data and analytics company GlobalData’s proprietary Trial Cost Estimates model was created. This model assesses how trial-specific attributes influence study costs and contextualizes the impact that a trial’s complexity has on this cost. Data derived from the model supports the widely reported fact that the cost of running a clinical trial is on the rise (Figure 1), with factors such as increasing complexity, tentative regulations, and the geopolitical environment contributing to this increase.
The Covid-19 pandemic expedited the movement towards increased trial complexity for many sponsors as adaptive trial designs, which require extensive and complex clinical preparation, became a cornerstone in the research response to the pandemic due to their flexibility. However, these complex trial designs drive research and development (R&D) costs as they produce a higher volume of data requiring specific expertise. This adds to the ever-growing data intensity of clinical trials, driving personnel costs such as investigator and administrative data management costs higher. Increasing complexity is also linked to more protocol amendments, each of which incurs a cost believed to be several hundred thousand dollars. Trial complexity can also intensify patient recruitment and retention costs as inclusion and exclusion criteria become more difficult to fulfil. In turn, the enrolment period is often extended to allow recruitment targets to be achieved, which consequently increases trial costs as well.
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The uncertain regulatory environment is a key contributor to rising trial costs. Regulations such as the Inflation Reduction Act (IRA), which will allow the US government to directly negotiate drug prices with manufacturers, have created various uncertainties. Insights derived from GlobalData’s State of the Biopharmaceutical Industry report, which combines the industry expertise of GlobalData’s analyst teams with insights from 128 pharmaceutical industry professionals, indicated that most respondents believed the IRA would threaten pharma’s ability to invest in R&D. Specifically, they believed that the IRA would have a direct impact on lowering pharma’s revenues, which would stifle R&D as payor budgets are already squeezed. Additionally, the report highlighted apprehensions regarding the effect that the BIOSECURE Act would have on the industry, as it prohibits US companies that receive federal funds from doing business with five named Chinese biotech companies. As the US pharma industry relies heavily on Chinese contractor manufacturing organisations, some respondents believed that China would retaliate with trade obstacles that could lead to market destabilisation and higher R&D costs for biotech companies.
Geopolitical conflicts such as the Russia-Ukraine war and Middle Eastern conflicts are also expected to drive trial costs as they present unprecedented challenges relating to manufacturing, access, and the supply chain, with many drugmakers suspending operations amid the global inflation impact from serial conflict escalations.
Data obtained from GlobalData’s Trial Cost Estimates model indicates that the cost of both single-country US trials and multinational trials with at least one US location are increasing, and the factors discussed above have contributed and will continue to contribute to these rising costs (Figure 1). The rising cost of single-country US trials has the potential to sharply increase if China retaliates to the BIOSECURE Act via export controls targeting US companies. The fluctuating costs in multinational trials indicate the impact that geopolitical unrest can and will continue to have on trial cost throughout 2025 and the foreseeable future due to increased costs such as sharp, but mostly fleeting, global inflation (Figure 1).
Luckily, emerging technologies have the potential to mediate rising costs. AI is set to optimise the entire pharmaceutical industry through several applications such as its utilisation in large language models to generate optimised eligibility criteria, which is already being successfully implemented by several large pharma companies such as Roche and AstraZeneca. Additionally, the rise of antiobesity glucagon-like peptide-1 receptor drugs is bringing about the resurgence of decentralised trials and the utilisation of virtual trial components such as wearables, sensors, and apps. Although the clinical trial landscape in 2025 is predicated to be fraught with challenges, it is also forecast to be a significant year of innovation for the industry.
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