Small Hospitals Partner With Large Drug Companies for Mutual Benefits

Group of doctors leaning over chart and discussing

When drug trials are mentioned, mental dots are connected to large hospitals first, with names like the Cleveland Clinic, the Mayo Clinic, or New York Presbyterian Hospital coming to mind. Often overlooked, however, are smaller regional hospitals, important players in the total research picture that are rarely acknowledged as contributors in the information game.

It’s no secret that small hospitals need money. Expenses cover such things as specialty drugs, supply costs, administrative costs, wage costs, and more. On the other hand, drug companies need patients. Together, the two have found a mutual solution.

Across the country, regional hospitals are stepping up to make their facilities available to drug trials. Geisinger Health and five other local health systems in New Jersey and Pennsylvania have formed a consortium to increase participation in drug trials. A group of rural hospitals in North Dakota has ramped up its partnerships in the past two years to do more clinical trials. And in Ohio, two cancer centers have partnered to expand trial accessibility. “As a group we’re stronger than just one,” said James Brazeal, Geisinger chief administrative research officer. “We’re able to leverage that so we have more of an ability to participate, so that we can attract some of the trials that we couldn’t attract before,”’ quotes an article from Bloomberg.

The largest motivator for participation in these programs is the massive pay scale. According to Halloran Consulting Group, hospitals can be compensated at more than $10,000 per patient. Over 4,500 regional hospitals across the country have opted to participate in such trials.

“By working as a single unit, small hospitals hope to compete with urban medical centers like Dana-Farber Cancer Center in Boston and Johns Hopkins University School of Medicine in Baltimore, which for decades have hosted most trials thanks to a larger base of patients and a staff of top doctors. For drugmakers, trials across several hospitals are cheaper and more efficient because they face fewer regulatory review boards,” continues the Bloomberg article.

The alternate solution to unresolved funding issues is acquisition by a larger system. 30 such mergers were confirmed in the first quarter of this year alone. “Sizable organizations are continuing to pursue even larger partners in 2018, as providers look to establish a broader base of services and operations, in part, to compete against non-traditional market entrants that are bringing consumer focus and lower costs to the industry. Greater scale enables health systems to build the tangible and intellectual capital required to secure the resources they need to transform traditional business models from an economic and service standpoint. Without such scale, legacy hospitals and health systems are going to find it difficult, if not impossible, to stay competitive in markets with these new entrants and emerging mega-systems,” quotes Anu Singh, Managing Director at Kaufman Hall, “a leading provider of strategic and financial consulting services, and enterprise performance management and decision support software.”

Partnership with drug companies has become a radical solution that rejects reassignment of upper-level strategy, keeping the overall balance of power in-house. Sean Walsh, director of site development at Guidestar Research, infers that “we go to the hospital and can say, ‘Hey there is a clinical trial sponsored by X pharmaceutical company that can help patients bring a new drug to treatment and can also help you with your bottom line and offset some losses in other areas.”

“Some say, ‘I’m getting out completely, I’m going to do more trials with pharma companies,’" adds Kurt Oettel, a hematologist at Gundersen Health System, a nonprofit based in La Crosse, Wisconsin.

Another appealing aspect drug companies find in partnering with community hospitals lies in cancer patients. According to information from a Guardian Research article, "85% of cancer patients are treated at community hospitals in or near the communities in which they live, with less than 3% ever getting access to clinical trials." Access to these trials could entirely change treatment opportunities for such patients. Oppositionally, however, the modest community hospitals rarely have the staffing to be prepared for such trials.

Peter Ronco, head of global clinical development operations at J&J offered that “we share the goal of seeing new and effective treatments being developed and provided to patients in the most efficient means possible.” J&J is collaborating with the Geisinger consortium, and additioned that a “central contact with common processes” could streamline drug development research efforts.

Both drugmakers and patients will benefit from this widespread research. Naturally, the larger the sample size and area coverage, the more accurate the results of a trial. “No therapy will be approved if it’s just done at Johns Hopkins or just done at Sanford Health,” assured David Pearce, leader of research at Sanford. “You need to show it works at multiple sites.”

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