The changing world of independent IRBs
Acquisitions mean big changes, more services
Thanks to the rise in private equity ownership, the number of independent IRBs may be shrinking, but the number of services they offer is greatly expanding.
To get a sense of what is changing in the independent IRB field and why, IRB Advisor spoke to current and former CEOs of Schulman Associates IRB, WIRB-Copernicus Group, and Chesapeake IRB.
While independent, medical, and academic IRBs are all driven by the same goals — ethical research and the protection of human subjects — independent IRBs must also consider what other IRBs may not have to: the business of staying competitive and just staying in business.
"Right now you really only see four major IRBs: WCG [WIRB-Copernicus Group], Schulman, Quorum IRB [family owned], and Chesapeake," says John Isidor, JD, CEO of Human Subjects Protection Consulting in Cincinnati, and former CEO of Schulman Associates. "The family-owned nature of the IRBs is dying rather quickly with the private equity firms entering."
"As far at the notion of consolidation — an industry doesn’t consolidate on its own," says Don Deieso, PhD, CEO of WIRB-Copernicus Group (WCG). "It usually happens because the market is savoring that. We didn’t set out as a company to consolidate an industry."
One big reason behind the IRB acquisitions, Isidor says, is that IRBs are looking to expand their service offerings.
"Pre-2007, I don’t think any IRB did anything other than act as an IRB," he says. "Our entire focus was on improving turnaround times and customer service and trying to get more specialized IRB members to make sure we had appropriate expertise reviewing the research."
One example of expanding services is Schulman’s recent foray into consulting with its formation of Provision Research Compliance Services. The partnership between Schulman and Falcon Consulting Group provides quality assurance and human subjects protection consulting services.
"That was really an effort on our part to broaden our service lines to better reach the compliance needs within institutions," says Michael Woods, CEO of Schulman Associates IRB in Cincinnati. Schulman was purchased by Imperial Capital Group in 2008. "We wanted to be able to do more than simple review services, and provide support to the human research protections programs within institutions and ensure the compliance of the enterprise." Both Schulman and Falcon wanted to expand their service offerings, Woods says.
To expand its service offerings to clinical research organizations and other institutions, WCG offers an institutional biosafety committee for gene transfer and recombinant DNA trials. The company also acquired tech company IRBNet, which provides IRB and clinical trial management software.
"There’s been a resounding market acceptance," Deieso says. "One of the advantages of being a larger organization is that you can invest more."
The bottom line, Isidor says, is that private equity firms buy to sell. Firms look at how to grow the top and bottom lines of the entity they wish to purchase. "The model for the independent IRB is not perfectly aligned with the private equity model because there isn’t an unlimited amount of growth there," he says. "If anything, it’s either flat or somewhat reduced because of costs and patients that are accessible."
The IRBs’ focus on human subjects protection must remain firmly intact, Isidor says. "These private equity firms are well aware that if they do things to raise revenue and speed studies along, that could be the death knell of the IRBs," he says. "I think they’re certainly aware that they can’t push the envelope too far — they understand the impact of the FDA, OHRP, AAHRPP, and the ethical nature of what the companies do."
Working with private equity can increase risk awareness even more, Woods says. "Our experience with private equity has heightened our focus on doing everything we can to ensure a very compliant, high-quality service," he says. "I believe in the world of private equity, they’re looking to achieve certain business objectives and they need to do that in a way that minimizes risk as much as possible. Risk is something they have very little appetite for."
Grow or bust
The IRBs became aware that they would almost certainly have to sell in order to grow technological offerings and stay competitive, the CEOs acknowledge.
"Obviously the other aspect we were all competing on was electronic tools to let customers access data in a time-sensitive manner," Isidor says. "One other area for growth was offering services to larger institutions that would use independent IRB services or primarily commercial-sponsored research."
"I think it’s the reality that they [smaller independent IRBs] can no longer satisfy the market needs," Deieso adds. "They can’t go it alone anymore. If you don’t have the technology to live in a paperless world, customers won’t use you anymore and will find a better option."
"Part of the decision on my part [to sell] was to be a competitive player in the field while maintaining the high level of quality that we provide," says Felix Khin-Maung-Gyi, PharmD, MBA, CIP, RAC, founder of Chesapeake IRB and and executive chairman of Chesapeake Research Review, LLC, in Columbia, MD.
Resources are scarce for personnel and other funding needs, Gyi says, and IRBs must have certain economies of scale. This includes efficient technology platforms that are easily accessible to clients and facilitate timely research. "If an IRB hopes to be able to provide that type of support and they have not yet invested in the electronic infrastructure, it will be an expensive and difficult initiative to undertake today," he says.
Chesapeake invested in a Part 11 compliant electronic platform in 2005, which it continues to expand and improve. The capital from Audax Private Equity allows it to improve technology that supports the growth the IRB is currently experiencing, Gyi says. "I don’t see how we, as a research enterprise, can afford not to be efficient if we are to remain a viable provider of services," he says.
The growing use of central IRBs for multisite research is driving consolidation, Gyi says. "Enlightened sponsors, researchers and academic centers see the world is changing — consolidation supports timely intiation of multisite studies," he says. "There have been many models suggested; in the early 2000s, the question was, How can we run a more efficient multicenter trial so 100 different research sites don’t have to answer to 100 different IRBs?’ You don’t want to have 100 different interpretations resulting from the review of the same protocol. It’s been a topic that’s been underlying many conversations in the field. It’s now percolating to the top and people are seeing that they can indeed have one IRB that provides oversight that’s in compliance with regulations and ethical considerations. The profile of multicenter studies hasn’t really changed; what has changed is how a central review model can be a tremendous benefit in conducting multicenter research. This is further evidenced by academic medical centers relying more and more on central IRBs like Chesapeake’s to provide human research protections oversight for their investigators."
"One other area for growth was offering services to larger institutions that would use independent IRB services for primarily commercial-sponsored research," Isidor adds. "The push continues to be spearheaded in part by FDA and OHRP for one central IRB for large and medium clinical trials. It offers a great advantage of marketing your IRB services to the client."
As the model and role of central IRBs continues to take shape, independent IRBs must find their role within the model, Gyi says.
"We have to elevate our conversation: What does central review model look like? What does the professional IRB look like in the central model?" Gyi says. "In those terms, the role of the independent IRB would grow because they have the infrastructure to be efficient in a quality multicenter research setting."
The future of independents
"The landscape is changing across the entire research enterprise, not just independent IRBs," Gyi says. "From pharmaceutical companies to academic medical centers to hospital consortia, there are governance and structural changes that affect how research is being conducted across the board. We all have to be more efficient, and have the capacity to be scalable, if we are to remain competitive globally — not just nationally."
The CEOs acknowledge that the trend of independent IRB acquisitions is likely to continue. "These acquisitions have certainly affected the model, and it appears at some point there will probably be very few, very large independents dominating the market," Isidor says.
"Other than just reducing the number of major IRBs out there, it has been a way to accelerate our growth and do in a couple of years what would have taken four or five years to do," Woods says. "It remains to be seen what the impact will be on the rest of the industry."
"If the market didn’t favor fewer IRBs offering a wider array of services using more efficient technology, we wouldn’t do it," Deieso adds. "It’s the market that sets the requirements. The rest of us setting the market are the ones who perform. The smaller businesses will merge or go under." n