For biotech companies, clinical trials are not just a scientific milestone. They are the single largest driver of cash burn. Decisions made at the point where strategy turns into clinical execution often determine how far a company’s runway will stretch and how much control it retains along the way.

One of the most consequential of these decisions is how clinical research and development outsourcing is approached, particularly when selecting a Clinical Research Organisation (CRO). While most teams spend years refining the science, outsourcing decisions are often made under time pressure, with far less structure than they deserve.

The result is rarely scientific failure. More often, it is avoidable cost, delay, and operational friction.

The financial reality of clinical outsourcing

Industry data consistently shows that inefficiencies in clinical outsourcing are driven by operational and commercial factors rather than protocol design.

Research from the Tufts Center for the Study of Drug Development shows that approximately 57 percent of Phase II to Phase IV protocols undergo at least one substantial amendment. Crucially, around 45 percent of these amendments are considered avoidable with better upfront planning, feasibility assessment, and alignment between sponsor and CRO.

The cost implications are material. Published analyses estimate that implementing a single substantial protocol amendment costs approximately USD 150,000 in Phase II and USD 535,000 in Phase III, excluding indirect costs such as extended timelines, internal resource drain, and delayed value inflection points.

For early and mid-stage biotech companies, these figures are not marginal. One or two avoidable amendments can materially shorten cash runway.

Timeline impact and accelerated burn

Direct cost is only part of the picture. Protocol amendments typically introduce implementation delays of two to three months. These delays extend trial timelines while burn continues at full pace.

Delayed milestones mean delayed data. Delayed data weakens fundraising leverage, increases dilution risk, and can narrow strategic options with partners or investors. In this context, time is not an abstract metric. It is a financial variable.

What is striking is that many of these delays do not arise from scientific uncertainty. They arise because assumptions, responsibilities, and scope were never fully aligned at the outset.

Why cost overruns are rarely scientific

When sponsors analyse where clinical budgets overrun, the causes are remarkably consistent.

Cost overruns are most often linked to:

• Unclear or incomplete RFPs
• Unrealistic feasibility and enrolment assumptions
• CRO under-scoping during proposal development
• Misalignment between sponsor expectations and CRO delivery models

When these gaps surface during execution, they appear as protocol amendments, change orders, or additional pass-through costs.

Applied Clinical Trials has reported that amendment-associated costs are frequently driven by investigative site fees and contract change orders with CROs and other service providers. These are precisely the areas most sensitive to upfront scope clarity and governance discipline.

In other words, many of the most expensive problems are visible early, if sponsors know where to look.

CRO selection is not procurement

Selecting a CRO is often treated as a procurement exercise. In reality, it is a strategic decision that sets the tone for execution, governance, and financial control throughout a clinical programme.

A well-structured proposal and budget should do more than state a price. It should clearly define what will happen, when it will happen, who is responsible, and under which assumptions delivery is expected to succeed.

When structured properly, the proposal and scope of work become practical project management and governance tools, not just commercial attachments.

This is where predictability comes from. Predictability protects capital.

How smarter CRO selection protects cash runway

Smarter CRO selection does not mean choosing the cheapest bid. It means understanding what is truly included, what is assumed, and where risk sits if reality diverges from the plan.

By aligning CRO capabilities with trial requirements upfront, sponsors reduce the likelihood of avoidable amendments, change orders, and execution friction. They gain clearer oversight, fewer surprises, and greater confidence that spend is translating into progress.

For biotech companies operating with finite runway, this discipline matters.

How MedFriend supports sponsors

MedFriend works with biotech and life sciences companies to bring structure and control to clinical outsourcing decisions.

We support sponsors by:

• Translating development intent into clear, executable RFPs
• Ensuring CRO proposals and budgets reflect real operational delivery
• Identifying and reducing avoidable amendment and change-order risk
• Aligning CRO capabilities, scope, and governance from the outset

Our role is not to replace internal teams, but to act as a disciplined extension of them, ensuring that outsourcing decisions made under pressure stand up during execution.

Starting clinical programmes on solid ground

Protecting biotech cash runway is not about cutting corners. It is about making informed decisions early, before avoidable inefficiencies become embedded in execution.

Clinical outsourcing done well allows scientific teams to focus on advancing the programme. Done poorly, it quietly erodes capital, timelines, and strategic flexibility.

Smarter CRO selection is one of the most effective levers sponsors have to protect all three.

If you are preparing for CRO selection or clinical outsourcing, now is the right time to plan with discipline.
Get in touch to discuss your upcoming programme, or download our infographic on protecting biotech cash runway through smarter CRO selection.

Contact us at sales@medfriend.health or reach out via LinkedIn.