Research Solutions Manages Drug Testing

In 1999, Dr. Mary Good was convinced that managing drug tests could be a gold mine for Arkansas.

Good, a member of Venture Capital Investors LLC of Little Rock, sold the idea to VCI and helped raise $2 million for a startup company that would manage pharmaceutical trials for drug companies.

In just three years, Research Solutions LLC of Little Rock has become one of the larger companies of its kind in the nation. At the end of the year, it is expected to have revenue between $7 million-$9 million, said CEO David Jones. It currently is involved in 179 studies at 275 sites.

And the company is not finished growing, Jones said. Research Solutions is on track to make acquisitions or one day become a publicly traded company.

Research Solutions has managed to thrive even though drug companies dragged their feet on paying, which forced it to raise another $2 million in cash last year.

But some question the future of companies like Research Solutions, which are known in the industry as site management organizations, or SMOs.

In general, the SMO industry is flat, said Dennis DeRosia, chair of the association board of trustees for the Association of Clinical Research Professionals of Washington, D.C.

“In the last couple of years, you don’t see new ones popping up,” DeRosia said.

While some continue to expand, a number of them didn’t deliver the value they promised the pharmaceutical companies, he said.

SMOs claim to line up volunteers and doctors to conduct drug studies faster and cheaper than the pharmaceutical companies could do it themselves.

“Those are the SMOs that began to disappear as fast as they developed,” he said.

Others, however, say the future looks bright for the industry.

“The SMO industry has had its rocky ups and downs of not meeting the promise [of added savings],” said Steve Zisson, managing editor of CenterWatch, an information services company that covers the clinical trials industry. “Some of the [business] models, like Research Solutions, have sort of launched a second wave that have been having more success.”

Beginnings

In 1999, Venture Capital Investors was searching for ways to build and develop successful high-tech companies in Little Rock, Jones said.

VCI’s founder, William H. “Bill” Bowen, the retired lawyer and banker for whom the University of Arkansas at Little Rock law school is now named, asked Good to lead a group of investors in Arkansas. Good had experience in the biotech and pharmaceutical industry.

“She was convinced that there were some changes being made in this country as it related to how clinical studies were being conducted,” Jones said.

Good said the Little Rock area didn’t have an active site management organization that could interact with the drug companies to do clinical trials.

“It just seemed to us a major opportunity,” she said.

VCI could not only start a profitable company but it could also provide research outlets for physicians in the area, she said.

VCI considered buying or partnering with a small SMO that was operating in Little Rock at the time, “but the management team in that group was not what we were looking for,” Good said.

She wouldn’t name the company and said it has since disappeared.

“The issue was, then, could we start it anyway?” Good said.

After finding its four main managers, “that’s when [VCI] said ‘OK, this is a doable thing,'” she said.

Her vision was for the company to tap into some of the money the drug companies were spending on research. Pharmaceutical companies trying to deliver new drugs need volunteers to test the drugs and physicians to conduct the experiment. And the main SMOs were located on either coasts, Jones said.

“The southern part of the United States historically had been somewhat under represented in clinical studies,” Jones said.

Pharmaceutical companies are under a lot of pressure to deliver blockbuster drugs, said CenterWatch’s Zisson.

“They are looking a lot harder at SMOs to help with efficiency and get those drugs to market faster, which could take eight, 10 or 12 years,” Zisson said.

After a proposed drug makes it past the animal trials and the first wave of clinical trials on humans, it’s ready for the next wave of testing for U.S. Food and Drug Administration approval, Jones said.

Enter Research Solutions

That’s where Research Solutions comes in. During this round of testing, the drug companies are trying to determine how often a person should take the drug, how quickly it gets rid of the ailment and if it really works.

“What happens is the FDA mandates that these phases be done at multiple sites throughout the country … and they have to be done with the oversight of what’s known as a principle investigator or a physician,” Jones said.

Anywhere from 20-100 sites could be involved in a study.

“There’s a lot of paperwork [involved],” Jones said. “It’s pretty much an administrative nightmare as it relates to keeping up with all the details from a physician standpoint to make sure that everything is taken care of properly.”

Up until about 1995, 75-80 percent of all clinical research was done through academic research centers, such as medical schools, Jones said. But the schools were notorious for dragging their feet, Jones said.

Frustrated, the drug companies began looking to doctors in private practice to carry out the studies.

“Now in 2002, 75-85 percent of the clinical research studies are actually being done at private physician sites rather than at the medical school,” Jones said.

Physicians agree to do the studies because it gives their patients access to treatments that aren’t otherwise available.

Plus, some doctors enjoy conducting research while generating extra revenue for their practices.

The pharmaceutical company contracts with Research Solutions, and it, in turn, contracts with physicians. While some doctors handle the studies themselves, others turn it over to the SMO. The physician still handles the research, but Research Solutions handles practically everything else — from finding the patients to completing the paperwork.

Research Solutions also stays in constant touch with drug companies, monitoring their progress on drugs to be tested.

Research Solutions takes between 30-40 percent of the amount the drug companies pay for test services, Stacie Wickliffe, executive vice president and director of marketing for Research Solutions, told the Research Roundtable in May 2001.

“Our investigators don’t balk at our fees, as they focus on the incremental income they make from a research study,” Wickliffe said, referring to the doctors that Research Solutions recruits for drug studies. “And they realize how many more studies they are doing thanks to our marketing efforts.”

The physician then receives payment anywhere from a few hundred dollars into the thousands, depending on the study and its length, Jones said.

“It’s not a windfall profit to anyone; it’s basically a lot of work that’s required to be done,” Jones said.

Patients agree to the study because it gives them new treatment options for illnesses that they can’t shake.

Plus, a lot of people like helping others find a cure, while some do it because it gives them access to free medical care, Jones said.