Pharma’s eastern promise

pharmafile | January 29, 2007 | Feature | Sales and Marketing |  China, India 

Thanks to spiralling costs, increasing regulation and the ever-present threat of litigious action, it is hardly surprising that pharma companies are searching for more welcoming locations in which to carry out their business. The developing world is an obvious choice, with its large and accessible population, and now, as evidenced by several recent high-profile company moves, there are definite signs that pharma is starting to look east.

A recent industry report by international market research company Research and Markets puts the market value of clinical research outsourced to India at $100 million, and it estimates this could swell to as much as $1.5 billion by 2010. Currently, there are more than 80 government and private hospitals in India engaged in a mix of global and local clinical trials, offering specialty hospital beds at a 10th of the price of developed nations.

Faced with profitability obstacles, cost-savings lie at the heart of the rising popularity of trials in China and India among western pharma companies, driving their desire to outsource to these developing territories. Research and Markets estimates that the cost of conducting clinical trials in India tallies up at between 20% and 60% of the cost in western countries. Part of the reason behind this is explained by suggestions from industry sources that a volunteer in a developing country such as India or China receive the equivalent of £35 to £175 for participating in three clinical trials a year compared with UK volunteers, who are paid around £2,000 per trial.

Releasing rich rewards

Yet it is not simply economic benefits to be reaped from outsourcing.to China or India. The Boston Consulting Group (BCG) notes in its Looking Eastward report that these two countries offer a vast and inexpensive talent pool, fast-growing R&D capabilities and resources, and a high, treatment-naive patient population. By tapping into these resources, multinational pharmaceutical companies stand to gain greater flexibility in capacity and pipeline management. Offshore R&D today may also be the key to unlocking rich commercial rewards, especially in China, the BCG report concludes.

This viewpoint is echoed by industry players with a truly Indian perspective; for example, Ranbaxy, India's leading pharmaceutical company, confirms the main reasons for India's attractiveness include the availability of a large reservoir of intellectual medical, pharmacy and science graduates, hospitals with state-of-the-art facilities, low-cost clinical trials and diverse patient pools.

Both India and China have taken key steps in the last few years to cement their position within the new global landscape of clinical trials. In January 2005, India became TRIPS compliant and formally recognised pharmaceutical product patents, as well as boosting its intellectual property (IP) protection period from seven to 20 years. China, on the other hand, became a member of the World Trade Organization in 2001, a move which brought with it adherence to global trading rules.

The future's rosy

According to Christopher C Bergen, president and chief operating officer of Kendle, one of the world's leading global clinical research organisations, these two crucial changes have had a significant impact on opening up India and China to broader clinical research opportunities. "As each country's patent laws get more in line and enforcement increases, so too will participation in clinical trials," notes Bergen.

"India is emerging as one of the most competitive clinical research markets with more than 70 clinical research organisations (CROs) and central labs available," says a spokesman from Ranbaxy. "The data management service is doing good business and Indian sites participate in many multinational trials."

Kendle's Christopher Bergen agrees that the future for India and China within the global R&D arena looks rosy. "Both will be among the world's largest markets in the next 15 or 20 years and can expect to capture an increasingly large and proportionate share of clinical research opportunities," he reveals.

Despite the increasing uptake of international standards and process, some key differences remain which mark out India and China from their counterpart western trial territories. "The key differences are really the same reasons these locations are growing in popularity," remarks Bergen. "Namely, size of populations, lower costs, centralised access to patients in large hospitals and the availability of previously untreated patient populations." He adds: "In terms of process, there are no real significant differences as a result of the harmonisation of ICH-GCP."

Addressing the weaknesses

While agreeing that there is a clear rationale for conducting trials in India and China given today's competitive clinical development environment, TOPRA (the organisation for professionals in regulatory affairs which boasts members in more than 50 countries worldwide) cautions that some concerns remain about the difference in medical practices in these countries which could affect the usefulness of the data for registration elsewhere.

"Traditionally, there has been a strong generics industry in India, but one effect of this is a relative weakness in the preclinical area," says TOPRA. Indeed, basic research and biology skills in India are fairly weak, a legacy of the lax patent regime where fundamental research was neglected. There are also regulatory constraints in preclinical testing in animals such as monkeys, notes TOPRA. "Phase I trials are not permitted for new drug candidates discovered outside India," continues the Ranbaxy spokesman. "Also, there is no formal process for protocol advice and the discussion of clinical development programmes."

Despite these discrepancies, TOPRA believes that developments in the Drugs and Cosmetics Rules will lead to fewer ambiguities in future and will help foster greater regulatory support for research and faster approvals. Recent changes in patent protection will also improve the climate for inward investment, the organisation adds.

Turning to China, TOPRA sees the favoured regulatory approach here as closer to that in Europe. Indeed, the country has shown willingness to learn from both the FDA and the EMEA experience for its regulatory system. "China has weak intellectual property protection and its domestic drug market needs deregulation to increase its attractiveness," says TOPRA. "However, the Chinese government has introduced international standards, such as the GLP and the GMP, and also its own version of GCP in April 1998.

"Furthermore, it has improved the method for registering new drugs so that regulations now exist for IND and NDA developments."

As one of its work goals is to take Europe internationally, TOPRA is involved in training and informing regulatory professionals in all aspects of EU regulatory affairs. As such, the agency is actively engaged in expanding its members and contacts in China and India, seeking to add these developing markets to the TOPRA regulatory community.

Indian or Chinese?

Despite general similarities, India and China each offer their own unique and country-specific advantages. According to BCG, the best near-term opportunities in both countries are chemistry-based activities and clinical trials, although India boasts a more complete service offering in these areas.

Preclinical and biology activities represent medium- and long-term opportunities, respectively, with China outpacing India in innovative biology, reports BCG.

For each territory, there are strengths and weaknesses. While China outshines India in terms of the generosity of government backing for biopharma R&D, India enjoys a more extensive vendor base, an English-fluent workforce and better IP protection. And, unlike Indians, Chinese are not considered to be Caucasians when it comes to fulfilling FDA and EMEA ethnic distribution requirements.

India also benefits from a rapid approval process of 12 to 14 weeks, boosting its popularity further, and it is enjoying a growing collaboration with foreign companies, especially within the biotech arena.

But, as with any step in the clinical development pathway, seizing these new location opportunities is not always plain sailing. According to Global Language Solutions, a global communications service provider, patient rights and safety, as well as data quality, are two of the key issues. The prevalence of high illiteracy rates in India makes poor, uneducated masses potentially susceptible to abuse in the clinical trial process.

As such, the present lack of patient advocacy groups able to act as guardians of patient safety and integrity remains a crucial gap to be plugged. In addition, the many languages written and spoken in India pose their own patient recruitment and retention challenges.

When it comes to the quality of data and source documents, major government hospitals in India are often plagued by poor patient information retrieval systems; resulting from a lack of space, a large volume of patients and poor environmental control. Global Language Solutions also sees the lack of centralised records and good archive facilities as a key challenge given that all GCP-based clinical trials need data archived for a total of 15 years.

Gaining Chinese approval, equivalent to an IND, for testing a new compound in humans is a slow process, typically taking at least six months (sharply contrasting to the 30-day US review period). Recognising the challenges which this lengthy trial approval process poses to pharma, the Chinese government is taking key steps to align with Western trial approval timelines.

At its November 2005 R&D summit in Shanghai, McKinsey & Company confirmed that the Chinese government has shown an interest in streamlining regulatory process, officially setting the approval timeframe for phase I/II trials at 100 days. In testament to this commitment, senior State Food and Drug Administration (SFDA) officials have been participating in meetings organised by international groups such as the Drug Information Association (DIA) to share information and best practice.

"Convergence will likely be slow, however," concedes McKinsey & Co, "due to a lack of experience, technical expertise and manpower, coupled with a rapid increase in demand." In a clear acknowledgment and acceptance of these challenges, pharma companies are actively engaged in lobbying the SFDA through the RDPAC, the multinational pharmaceutical organisation in China.

Guidelines and ethics

India has well-defined guidelines for carrying out various phases of clinical trials, which fall in line with global guidance on clinical research  the ICH-GCP. Key guidelines governing clinical trial conduct in India include Schedule Y of the Drugs and Cosmetics Act 1940, The ICMR Code (Ethical Guidelines for Biomedical Research on Human Subjects 2000) and Good Clinical Practices 2001. And it seems that rules are continuing to tighten. "Regulations made effective from January 2005, a revised Schedule Y, stipulate ethics committee composition and function," says the Ranbaxy spokesman. "A written, informed consent is required, impartial witnesses required for vulnerable patients and assent required for older children. Furthermore, the regulatory authority will inspect sponsors, CROs, IRBs."

Christopher Bergen believes that Indian and Chinese compliance to international standards of research  including those governing ethics committees  is, on the whole, very good. "India has maintained a high level of compliance with ICH-GCP standards for a number of years and, even though some differences exist between China-GCP and ICH-GCP, Chinese investigators can and do work to ICH-GCP standards when required. China is also making great strides to manage independent ethics committees (IECs)," he adds. In fact the SFDA has issued a draft working guideline on how to manage IECs in China."

In testament to the soundness of these standards, data collected from trials conducted in both India and China have been successfully submitted to a variety of international authorities including the United States FDA and the European Medicines Authority. Pivotal trial data generated from Chinese sites provided the bedrock of evidence supporting FDA approval of Wyeth's intravenous antibiotic Tygacil in June 2005. Similarly, Sanofi-Aventis has recently wrapped up a 46,000-patient trial of Plavix in which recruitment occurred exclusively in China.

Know your place

In order to successfully navigate the Chinese and Indian trial waters, an effective working knowledge and appreciation of each culture, language, regulatory structure and medical environment are essential. "Local knowledge is extremely important, both from a recruitment and regulatory perspective, and can save biopharmaceutical companies precious time and money as they work to bring their new drugs to market," says Bergen.

A company with local knowledge of China or India can develop a tailored R&D and market launch plan, organise a clinical trial more efficiently and avoid possible pitfalls with local regulatory agencies, continues Bergen. In fact, Kendle's own external research indicates that when biopharmaceutical companies are considering prospective CROs to assist them with a  clinical trial in China or India, a full 82% indicate that local market knowledge is among the top three most important reasons. "Local knowledge is important both for conducting trials and raising awareness of local therapy areas," agrees Ranbaxy's spokesman.

"India offers multinational pharmaceutical companies a fairly fast and long-lasting payoff by turbocharging their R&D productivity quickly and sustainably," concludes BCG, weighing up the value proposition promised by each country, "while China invites the pharma industry to place a strategic bet on increasing its share of the burgeoning commercial market for pharmaceuticals in both the near and longer term."

What remains certain is that by tapping into these alluring locations, pharma has the potential to reinvigorate its entire research and development process  by first injecting it with a potent dose of eastern opportunity and then watching the life flow back into its clinical trials.

Helen Boreham is a freelance journalist.

She can be contacted via Pharmafocus by email: pharmafocus@wiley.co.uk