Many of us take prescription medication with little to no understanding of just how long it takes — or how much it costs — to get that drug to market.
Conducting clinical trials of a given medication usually takes years and lots of money. It is estimated that in 2019, the pharmaceutical industry spent $83 billion on R&D. It’s no surprise that some startups may struggle financially as they go through the process of getting approval from the U.S. Food and Drug Administration.
Meanwhile, the prices of prescription drugs have increased by an estimated 35% since 2014, according to Healthcare Finance.
Adam Weisman, co-founder and CEO of startup Auxilius, believes part of the reason for this goes back to the expense of, and how much risk is involved in, developing the medications to begin with.
“There are so many points of inefficiency in — and tax on — our systems…We’ve simply accepted this,” he said in an interview. “And yet every other industry has developed increasingly sophisticated methods of predicting, managing, and pricing risk. I truly believe that if you want to manage prescription drug costs, you have to start at the beginning.”
On top of that, some phase 3 trials fail due to lack of funding — not because of the safety or efficacy of the treatment.
What Auxilius has built, he says, is an FP&A (financial planning & analysis) and accounting product “built from the ground up” to manage the complexity of clinical trials. And it just raised $10 million in funding to advance its efforts.
“Our platform was designed to drive alignment between clinical and financial stakeholders — to streamline core FP&A and accounting workflows, hold outsourced vendors accountable through change, and put processes in place that directly support audit, compliance, and reporting requirements,” he told TechCrunch.
Since its launch late last year, Auxilius has been in pilot with clinical trial sponsors managing 15 preclinical through phase 3 programs, 45 distinct vendors and nearly $100 million in trial spending. The company expects its software to be deployed at 25 clients by year’s end.
Renegade Partners led its funding round, which included participation from existing backers Bain Capital Ventures and XYZ Venture Capital, as well as a number of angel investors.
The company’s mission goes beyond just helping biotechs manage the financial aspects of the clinical trial process, according to Weisman. He believes that will have the ripple effect of more “lifesaving” therapies becoming available, at more affordable costs.
“It’s tempting to believe that clinical R&D is inherently unpredictable and, given what’s at stake, that costs don’t matter,” added Weisman. “The reality is that costs do matter and play an essential role in determining whether a therapy is ultimately successful. As we look ahead, we are committed to reducing financial risk and infusing financial intelligence at every step in the drug development life cycle.”
Roseanne Wincek, managing director at Renegade Partners, agrees.
“The benefit of the Auxilius platform is immediately apparent to the biotech companies that now drive the majority of drug research and development,” she said in a written statement. “Auxilius could be the difference between bringing a cure for disease to market and seeing it languish in a lab.”