Outsourcing clinical trials

Writing in Pharmatech a couple of years ago, Dr Faiz Kermani observed that “many clinical trials are plagued by delays and setbacks that can cost pharmaceutical companies millions of dollars in missed sales, making the maximisation of R & D efforts a top priority.”

It is not surprising, said Dr. Kermani, who at that time was a marketing executive at Chiltern International in California, that outsourcing clinical trials has become a popular option for cutting costs and minimising time. Contract research organisations (CROs) account for about 20% of the pharmaceutical and biotech R&D budget, he wrote.

Today, Kermani works for Health Interactions in London as an account manager. He believes that if anything the trend towards outsourcing has become even more pronounced. He told HOC that in 2004, the latest year for which figures are available, leading CROs managed nearly 23,000 I–IV studies at 152,000 sites worldwide. Moreover, he says, clinical development projects in which CROs were greatly involved were submitted to the FDA more than 30 days closer to the projected submission date than were projects with less CRO involvement.

Kermani notes, too, that the international picture is changing… with much greater use of emerging market countries in Eastern Europe, Latin America, India and China. Citing a CMR International study in the UK, he says that Ukraine has had a 700% surge in its usage for patient recruitment between 2002 and 2005, while he says that the UK Trade and Investment Biotech Scoping Mission report of 2007 found that clinical trials can be conducted in China for about 10% of costs in Western countries. Finally, McKinsey has estimated that by 2010 the pharma industry will spend some $1 to $1.5 million on clinical trials in India alone.

In fact, countries now compete vigorously for conducting clinical trial application reviews. Canada is one country with a low time of approximately one month (by contrast, China takes eight months and India three and a half) and promotes its advantages in a glossy brochure. The Canadian cost advantage, it states, is 22.4% over costs in the US. And in a breakdown of annual costs of clinical trials management by country, Canada showed a profit before tax of $924,000, compared with the US at $157,000. Among the CROs doing business in Canada are Covance, Parexel, and Quintiles.

The Canadian Consul and Senior Trade Commissioner in Philadelphia, David B. Weiner, notes that Canada is competing for clinical trial business not only in the United States, but also globally. Says he: “Canada offers a number of advantages for clinical trial research. Canada is highly competitive with the US in the areas of clinical trial quality, efficiency, and costs. Some of our cost advantages include lower clinical trial recruitment costs and lower per-nurse labour costs. Most routine diagnostic procedure costs for clinical trial patients are covered through provincial health programmes. In addition, Canada’s generous R&D tax incentive programme can drastically reduce the overall costs of clinical research conducted in the country.”