Clinical trials—the process of testing the safety and efficacy of new drugs—are costly and complex undertakings for pharmaceutical companies. A trial can cost hundreds of millions of dollars and require the coordination of many patients, physicians, and regulatory agencies for up to seven years. The stakes are high not only because companies spend about 10 percent of their operating budgets on these trials but, more important, because they derive huge benefits from being first to market with a new type of drug. In addition to threats from similar compounds, pharmaceutical companies face competition from generics once their patents run out. Patents are issued before a drug goes into clinical trials, so the faster a trial goes, the longer the pharmaceutical company enjoys a monopoly until generic versions can be sold. Thus, a streamlined and speedy process for trials can have a major impact on the economics of new drugs and of existing drugs that may be approved for additional uses after further clinical studies.

Over the past decade, pharmaceutical companies have introduced a number of initiatives to boost the productivity of clinical trials. One of these initiatives has been the rollout of electronic data capture (EDC) systems, which allow...