Drug development has reached over $2.6 B and is driven by a clinical trial's success rate, out-of-pocket study costs and study timescales. However, medication nonadherence is a hidden cost which heavily influences these cost drivers. We discuss how medication nonadherence introduces data variability, requiring trial managers to enrol more patients to maintain statistical power, which in turn extends trial timelines. Cost savings are described based on improving study noncompliance with a compliance tool such as Synegys' mComply. This mHealth tool reduces costs as a result of improved statistical power, lower enrollment and shorter trial duration.

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Impact of Noncompliance in Clinical Trials
Understanding the Hidden Cost of Medication Nonadherence
June, 2018

2. 61%
38% 37%
22% 22%
41%
Appointment Keeping Short-term Medication Long-term Medication
Prevention Trials
Treatment Trials
Executive Summary - Medication Nonadherence is a Key Issue Driving Clinical Trial Costs
Drug development has more than doubled over the past
decade, reaching $2.6 B. This is driven by the key R&D cost
drivers of success rate, out-of-pocket costs and trial
timescales.
Impacting these cost drivers is the persistent issue of
medication nonadherence. When patients skip doses, take
medications off schedule or don’t adhere to trial
requirements, Sponsors can arrive at erroneous
conclusions. Moreover, linear increases in nonadherence
has an exponential impact on the number of patients
needed to yield the same statistical outcome.
Consequently, study timelines are extended.
Based on a Phase 2 study having a nonadherence rate of
30% with an average of 203 patients,an additional 104
patients need to be enrolled to maintain statistical power.
This is a wasted capital on cost of $13.3 M. Improving
adherence by 1% (from 30% to 29%) offers $399,000 in
cost savings.
Armed with a compliance tool such as Synegys’ mComply,
study teams can reduce costs by managing behaviours that
impact statistical power and sample size, ensure patients
are following the drug regimen of taking the correct
dosage on-schedule, and ensure study timelines are met.
Patients are engaged through two-way communications,
timely notifications and data collection methods accessible
on all mobile platforms and phones.
Capitalized Cost of New Drug
© 2018 Synegys s.r.o.All rights reserved.
Suboptimal adherence can
lead to study failure by
interfering with the proper
interpretation of trial results
Success Rate
Medication Nonadherence / Study Noncompliance
Increases in data variability mean that trials need to enroll
more patients in order to satisfy statistical outcomes, requiring
more resources for patient recruitment which in turn extends
trial timelines. Moreover, costs are incurred when dealing with
noncompliance episodes.
Increases in Data Variability
Out-of-Pocket Costs Timescales

3. 2
© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
The most commonly cited statistic is based on a Tufts’ Study which puts the cost of bringinga new drug to market at about $2.6 B, a 145% increase, correcting for inflation,
over the estimate the centre made in 2003. However,the $2.6 B price tag is widely disputed with some sources. While the Tufts Centre reports that $2.6 B is the cost to
develop ‘a new prescription medicine that gains marketingapproval,’it might be more accurate to say that it’s the cost to develop certainnew molecular entitiesfor which
pharmaceuticalcompanies did all of the research. However,they represent a minority of drugs and were used in the $2.6 B calculation.2
A comparison of mean estimates is challenging,particularlyin the use of differentdatabases of drugs. Moreover,important differences exist across subgroups of drugs—for
instance, by therapeutic area, by firm size and by compound origin. So the median and mean are essentiallymeaningless; the ranges and distributions are more interesting.
Rising Clinical Trial Costs – Studies show the cost of drug development over $1.5 B, with a controversial study
showing drug development to have more than doubled over the past decade, reaching $2.6 B1
Average Cost to Develop One New Approved Drug (in 2013 $)1
Mean Cost per Drug By Middle Year of Study Data (in 2013 $)3
Source: 1 Tufts Center for the Study of Drug Development
2 Carroll, Aaron. $2.6 Billion to Develop a Drug? New Estimate Makes Questionable Assumptions. The New York Times. Nov 18, 2014.
3 Synegys Analysis and The R&D Cost of a New Medicine. Office of Health Economics, 2012
$179 M
$413 M
$1,000 M
$2,558 M
1970s 1980s 1990s-Early 2000s 2000s - Early 2010s
$1.6B
$2.3B
$1.6B
$1.5B
$2.6B
$1.9B
$.0B
$.5B
$1.0B
$1.5B
$2.0B
$2.5B
1996 1998 2000 2001 2001 2002
Adams & Branter,
2010
Gilbert, Henske &
Singh, 2003
M-Ferrandiz et al,
2012
Gilbert, Henske &
Singh, 2003
Dimasi et al, 2013 Paul et al, 2010

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© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
-$94.0m
+$26.0m
+$16.1m
+$15.3m
+$99.2m
-$26.0m
-$16.0m
-$15.2m
-$30m -$20m -$10m +$0m +$10m +$20m +$30m
Success Rate
Out-of-Pocket
Trial Duration
Cost of Capital
Increase 1% Decrease 1%
Given the long timescales required to develop a new drug (9 – 15 years) and the associated risks, both failures and the cost of capital are needed to compute the total cost
of a new successfuldrug, i.e. not just the out-of-pocketpatient,site and study costs. Capitalizedcost is the standard accountingtreatment for long-term investments.A
10.5% cost of capital was used by the Tuft Study to arrive at the $2,558 M cost of developing a new drug.
As mentioned before, there is controversyaround the Tufts’ study as some key inputs were not communicated.However, a model was prepared by Bruce Booth and
enhanced by Synegys to arrive at almost the same figures as the Tuft Study.Building on this model, a sensitivityanalysisof the key parameters show that cost estimates
are most sensitive to success rates,followed by out-of-pocketcosts.
Clinical Trial Cost Variables – The capitalized cost of a new drug is based on four main variables: out-of-pocket
costs, success rates, development times, and cost of capital with success rates being the most sensitive
Cost of Developing a New Drug Model (2013 Prices, $M)1,2 Sensitivity Analysis (+/- 1%) to $2,558M Base Case Cost2
Source: 1Booth, Bruce. A Billion Here, A Billion There: The Cost of Making a Drug Revisited. Nov. 21, 2014.
2Synegys Analysis
Note: Tuft Study Supplied Inputs from Briefing Pack (Nov. 18, 2014) in RED with Cost of Capital = 10.5%. Assumptions in BLUE
$2,558m
STAGE
Success
Rates
(%)
Average cost
per project
($M)
# of
Compounds/
Projects
Out-of-
Pocket Costs
($M)
Duration
(yrs)
Capitalized
Value at
launch ($M)
Discovery 50% $8 24.5 $196 1.2 $537
Pre-clinical 69% $10 12.2 $122 1.4 $295
Phase I 60% $20 8.5 $169 1.7 $348
Phase II 36% $80 5.0 $402 2.5 $673
Phase III 62% $300 1.8 $536 2.6 $696
Registration 90% $10 1.1 $11 1.3 $12
Market 1.0
TOTAL $428 $1,437 10.7 $2,560

5. a Trial publicationsmay have reported the number of participantsmore than one of the categorieslisteda Trial publicationsmay have reported the number of participantsmore than one of the categorieslisted
Will be updated
4
© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Initiativesto address the key R&D cost drivers include: outsourcingto CROs, running trials in emerging markets, using biomarkers to improve pre-clinical screening, and
designingadaptive trials among others; however,the issue of nonadherencehas often been overlooked.
Trial compliance, with a focus on medication adherence, is a critical element that impacts all R&D cost drivers.Nonadherence not only causes temporary bouts of toxicity
(double dosing) and lack of efficacy(skippingdoses), but also introduces data variabilityinto the equation.Increases in data variabilityinhibits decision-makingand raises
safetyconcerns.Moreover,it means that study teams need to enroll more patients in order to achievethe study’s statistical outcomes. This will lengthenstudy timelines.
Impact of Medication Nonadherence – Study noncompliance / medication nonadherence contributes to the key
cost drivers influencing total R&D costs
Source: Synegys Analysis
Capitalized Cost for New Drug
Reduces Success Rates Increases Out-of-Pocket Costs Lengthens Timelines
Cost Drivers:
• Cost / patient
• # of patients
Cost Drivers:
• Longer regulatory reviews
• Trials becoming increasingly complex
• Trade-offs between time and success rate before
proceeding to next phase
Cost Drivers:
• Regulators are more risk averse
• Clinical endpoints are less clearcut
• Pre-mature advancement to Phase 3 trials
Study Noncompliance / Medication Nonadherence
• Hinders development decisions because of
poor adherence data from efficacy trials
• Necessitates need to enroll more patients to
maintain statistical power
• Increases # of non-compliance episodes
• Lengthens recruitment timescales
• Complicates data analyses

6. 5
© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Frost & Sullivan defines adherence as “the extent to which patients follow the recommendation on medication, diet and lifestyle modifications”. Nonadherence can occur in
clinical trials as patientsdeviate from treatmentprotocol e.g.forgettingto take doses, taking medications at incorrect times, taking an incorrect dose or missing study visits.
According to an article published in The New England Journal of Medicine, averageadherence rates among patients in clinical trials receiving treatmentfor chronic
conditions are 43% to 78%.1 Another study found mean adherence rates in clinical trials for appointmentkeeping, short-term medication-taking, and long-term medication-
taking have been estimated to be 39%, 62%, and 63% respectivelyfor prevention trials and 78%, 78%, and 59% for treatment trials.2Lack of efficacyand data variability are
introduced with nonadherence.
Prevalence of Study Nonadherence - Many patients do not adhere to investigational medical product (IMP) and
the study protocol
Average Adherence Rates in Clinical Trials (%)1
Source: 1 Lars Osterberg, M.D. and Terrence Blaschke, M.D. Drug Therapy: Adherence to Medication. The New England Journal of Medicine. 2005.
2 Robiner,WilliamN.: Enhancingadherence in clinicalresearch.ContemporaryClinicalTrials26 (2005).59-77.
3 BlaschkeTF, OsterbergL, VrijensB, Urquhart J. Adherence to medications:insightsarisingfrom studieson the unreliablelinkbetween prescribedand actual drug dosinghistories.Annu Rev Pharmacol Toxicol.2012.
0
20
40
60
80
100
Appointment Keeping Short-term Medication Long-term Medication
Prevention Trials Treatment Trials
Impact of IMP Non-Adherence2

7. 6
© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Partial adherence or nonadherence prevents trials from determiningexact dose-responsecurves and optimal dosing for real-world conditions.Failure to determine drug
efficacyand safetyin Phase 2 is the leading reason for trial failures in Phase 3.
Regulatoryagencies have an interest in improving the quality and output of registration trials. For example, part of the FDA’s mission statement is “The FDA is responsible
for advancingthe public health by helping to speed innovations that make medicines more effective, safer.. . .” Improvingthe precision of clinical trials is therefore one
approach to advancingthe FDA’s mission, and that would include interventionsto improve adherence and to detect nonadherence.
Nonadherence Impacts Success Rates – Suboptimal adherence can lead to study failure by interfering with the
proper interpretation of trial results1
Different Dosing Patterns2 Transition Probabilities and Overall Success Rate (%)3
Source: 1Thomas M. Shiovitz et al. Mitigating the Effects of Nonadherence in Clinical Trials, The Journal of Clinical Pharmacology 2016. 56(9), 2016.
2AiCure, Phase II study: subject data, 2012–2014, provided by AiCure; New York, NY
3DiMasi, Briefing – Cost of Developing a New Drug. Nov 18, 2014. https://csdd.tufts.edu/csddnews/2018/3/9/march-2016-tufts-csdd-rd-cost-study.
Note: Therapeutic new molecular entities and new therapeutically significant biologic entities first tested in humans, 1995-2007
59.52%
35.52%
61.95%
90.35%
11.83%
Phase 1 to 2 Phase 2 to 3 Phase 3 -
NDA/BLA Sub
NDA/BLA Sub
to Approval
Phase 1 to
Approval
Study participantsmay have
differingdosingpatternsover
the courseof a trial.2Custom
interventionsmay be offeredor
triggeredby predefineddosing
patterns.PatientB, aftera few
monthsof consistentbehavior,
demonstratedhighlyvariable
dosing.PatientC discontinued
use of the medicationafter a
few months.PatientD had
dosingholidays(stoppedusing
the medicationfor a periodof 2
weeksor more).In each casea
custom interventionstrategy
couldhaveminimizedpotential
disruptionsto the power of the
study.

8. 7
© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Direct Per Study , $0.53
Direct Per Site, $3.79
Site Overhead , $1.74
Other , $4.00 Recruitment,$0.16
RN/CRA , $0.44
Retention,$0.02
Physician,$0.38
Clinical Procedure, $1.48
Central Lab , $0.80
Other, $3.28
Total trial costs is the sum of the variable cost components(per study, per site and per patient), site overheadand other costs. Nonadherence has an effect on per patient
costs representing27.9%, 24.6%, 26.0% and 19.9% of total costs in Phase 1, 2, 3 and 4 respectively.1 Per patientcosts include patientrecruitmentand retention,
registered nurse / clinical research associates,physician,clinical procedure and central lab expenses.
Noncompliance episodes at $102/episode2 can quickly get out of hand if one assumes an Investigational Medicinal Product (IMP) nonadherence rate of 30%. Moreover, by
focusing on reducing study noncompliance, less effort needs to be spent on patientrecruitment.This is significantas according to the New England Journal of Medicine, it
costs an average of $6,533 to recruit a patientfor a trial, and three times that amount to recruit a new patientif one is lost due to noncompliance.
Clinical Trial Out-of-Pocket Costs – Nonadherence influences direct patient variable costs, representing nearly
24% of total trial costs1
Phase 2 Trial Cost Breakdown ($ M)1 Direct Per Patient Cost ($)1
Source: 1Examination of Clinical Trial Costs and Barriers for Drug Development, Eastern Research Group 2014
2Only considers the time of a clinical trial manager / coordinator at a 2015 cost of AUD 136.17 (i.e. excludes time from principal investigator and other support departments). Health Consult Pty Ltd. Development of a table of standard costs for conducting Clinical
Trials in Australia 2015
Note: Per Study Costs includes data collection & analysis, Institutional Review Board Approvals & Amendments, and source
data verification;Per Site Costs include site recruitment and retention, administrative staff and site monitoring
$0 $3,000 $6,000 $9,000 $12,000 $15,000 $18,000
Phase 1
Phase 2
Phase 3
Phase 4

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© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Up to 45% of study delays of six months or more can be attributed to recruitment challenges.1
The Clinical Trials TransformationInitiative (CTTI) surveyconducted in 2015 showed that finding or identifyingpatientswho meet eligibility criteria, at 81%, was the most
significantbarrier to conducting clinical trials. The next most significant,at 67%, being insufficient staff time for recruitment tasks.2 Research shows that these recruitment
difficulties maylead to delaysof one to six months for 86% of clinical trials, with the remaining 14% experiencingeven longer delays.According to Centerwatch, 11% of
investigational sites fail to recruit any patientsand 37% under-recruit.3
Patient Recruitment Timelines - Medication nonadherence introduces data variability, requiring trial managers
to enroll more patients, which in turn extends trial timelines
Timescales (Months)
Source: 1 Chin Feman SP, Nguyen LT, Quilty MT, et al. Effectiveness of recruitment in clinical trials: an analysis of methods used in a trial for irritable bowel syndrome patients. Contemp Clin Trials. 2008;29(2):241-51.
2 Mahon, E, Roberts J et al. Barriers to Clinical Trial Recruitment. ACT. Sep 03, 2015
3 Thadani SR, Weng C, Bigger JT, Ennever JF, Wajngurt D. Electronic screening improves efficiency in clinical trial recruitment. J Am Med Inform Assoc. 2009;16(6):869-73.
Source: Getz. The Cost of Clinical Trial Delays. Tufts CSDD, January 2015.
Actual Enrollment Timelines Typically Double Planned Timelines
Source: CMR International. Pharmaceutical R&D Factbook 2011, Thomsom Reuters, May 2011
94%
71%
95%
99%
113%
116%
Overall
Oncology
Respiratory
Cardiovascular
Endocrine / Metabolic
CNS
Planned Actual
0
5
10
15
20
25
30
35
Start-up Recruitment Trial Execution Data Clean-up &
Support
Phase 1 Phase 2 Phase 3

10. 9
© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Linear increases in nonadherence has an exponentialimpact on the number of patientsneeded to yield the same statistical outcome. To account for noncompliance, Wittes
states that sample size needs to be inflated by the square of the proportion of people in both treated and control groups who deviate from study protocol.1
A scenario was illustratedby Alsumidaie2; however,his analysis wasbased on 30% and 50% non-adherence rates requiring 50% and 200% increases in sample size
respectively.This differs from Witte’s as shown below. Building on Alsumidaie’s work and using Witte’s adjustmentfor sample size, we derive the additional patients
required to maintain equivalentstatisticalpower for typical Phase 1, 2, 3 and 4 studies having an averageof 75, 203, 828 and 422 patients3 respectively.
Nonadherence Impacts Patient Enrollment and Study Timelines - To maintain statistical power, a study’s sample
size needs to be increased to account for medication nonadherence
Sample Size Multiple to Maintain Equivalent Statistical Power1,2
Source: 1 Wittes, Janet. Sample Size Calculations for Randomized Controlled Trials. Epidemiologic Reviews. Vol 24, No. 1, 2002
2 Alsumidaie. Non-Adherence: A Direct Influence on Clinical Trial Duration and Cost. Applied Clinical Trials. Apr 2017.
3 Source of information used in this analysis for aggregated clinical trials and patient average data: www.clinicaltrials.gov via www.karmadata.com
Add’l Patients Required to Maintain Equivalent Statistical Power
0
100
200
300
400
500
600
700
0% 10% 20% 30% 40% 50%
Medication Nonadherence Rate
Phase 1
Phase 2
Phase 3
Phase 4
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
0% 10% 20% 30% 40% 50% 60%
Medication Nonadherence Rate
Witte
Alsumidaie
Ave. # of Patients in Trial = 828
203
422
75

11. 10
© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Alsumidaie1examined how nonadherence influences clinical trial duration and cost. Expanding on Alsumidaie’s work, we calculate the estimated wasted capital on cost of
$13.3 million for enrolling and retaining 104 patients in a Phase 2 study scenario having an average of 203 patients.By reducing nonadherence by 1% (to 29%), sponsors
need to enrol 3 less patients in order to maintain equivalentstatistical power, resultingin nearly $399,000 in cost savings,and naturally,minimizing timeline slippage.
The Financial Cost of Non-Adherence – A 1% improvement in medication adherence can offer cost savings in the range
of $14k - $75k in direct variable costs, depending upon the trial phase
Opportunity Cost of Reducing Non-Adherence by 1%
Note that our analysis differs from Alsumidaie’s as we use a different IMP nonadherence rate, include the aforementioned direct variable cost categories, employ a weighted average cost of capital (WACC) of 9.24%, apply a 19.9% success rate from Phase II to approval and
inflate the sample size using Witte’s model rather than use an imputed linear sample size multiple as he does.
Source: Synegys Analysis
1Alsumidaie. Non-Adherence: A Direct Influence on Clinical Trial Duration and Cost. Applied Clinical Trials. Apr 2017. http://www.appliedclinicaltrialsonline.com/non-adherence-direct-influence-clinical-trial-duration-and-cost
Trial Phase
Additional Patients Needed to Maintain Statistical
Power
Wasted Capital on Cost of Enrolling and Retaining
Additional Patients
Average Cost Savings per 1%
Improvement in Adherence
30%
Nonadherence
29%
Nonadherence
30%
Nonadherence
29%
Nonadherence
1 39 38 $8,820,516 $8,588,525 $231,992
2 104 101 $13,332,640 $12,933,782 $398,858
3 423 411 $5,954,727 $5,779,264 $175,462

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© 2018 Synegys s.r.o.All rights reserved. For DiscussionPurposesOnly
Armed with a compliance tool such as Synegys’ mComply, study teams can manage behavioursthat impact statistical power and sample size, ensure patientsare following
the drug regimen of taking the correct dosage on-schedule, and ensure study timelines are met. Patients are engaged through two-way communications,timely
notifications and data collection methods accessible on all mobile platformsand phones. mComply can provide medication reminders, gather data e.g.dosing dates and
times, provide timely information,send alerts and initiate interventionsbased on conditional triggersand logic applicationsif a patient appears to be non-compliant.
mComply is a scalable solution providing adherence rates as high as 97.5%. With this level of adherence, 12 additional patients(as opposed to 104 at a 70% adherence
rate) need to be enrolled to maintain equivalentpower. Nearly $1.5 million in variable costs can be avoided,translatingto $11.8 million in expected cost of capital savings.
Study Compliance Tool – mComply reduces costs as a result of improved statistical power, lower enrollment and shorter
trial duration
Participant Engagement Channel
Patients can submit or obtain information via different channels,
including 2-way text messaging, mobile app, email, a website or
through interactive voice response.
Application
Modules are customized according to functional requirements
supporting the study protocol. These include interventions study
compliance and the infrastructure processes including
registration, randomization, setup, opt-out and escalation
workflow.
Backend Interface
A web portal acts as the backend interface. Study coordinators
can securely access all the data sent/received between the
patients and the Application.
mComply – A Study Compliance Tool
Request our brochure and learn more about our approach to improve medication nonadherence in clinical trials

13. 12
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CONTACT DETAILS
Get your copy of our study compliance business case or our latest brochure: mComply: Running Successful
Clinical Trials – Adherence Delivered
If you have any questions about the material in this presentation or would like further discussion, please contact:
William Eng
Managing Director, Synegys
✉ william@synegys.com
✆ Americas & Asia-Pacific: +1 403 708 3910
✆ Europe & Africa: +420 735 062 777
✆ CIS: +7 903 215 35 22
✉ info@synegys.com
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