The growth of the clinical trial industry in India is extricably linked to the growth of the health care industry in India as well as globally. In particular, increase in research and development activities would lead to a higher demand for clinical trial services, which meet global standards.
The World Trade Organisation's (WTO) intellectual property agreement has signalled a significant change in India's pharmaceutical industry. India has agreed to recognise pharmaceutical product patents by 2005, encouraging firms to switch their efforts from producing generics, and actively engage in research and development of their own
A rising tide of research and clinical trials
Currently, about 80 government and privately owned Indian hospitals are engaged in global and local clinical trials. Observers predict that this figure will increase exponentially in our country to an estimated 14,000 hospitals, 5,00,000 doctors, 7,00,000 beds, 162 medical colleges, and 17,000 medical graduates per year.
The total market value of clinical research performed in India in the year 2001-02 was about USD $70-$80 million. The firm increase in CRO activities can be attributed to large subject pools in most major therapeutic areas, improved medical infrastructure, and increased awareness of the ICH Guideline for Good Clinical Practice and formation of specialized pool research investigators.
Increased awareness of good clinical practice (GCP) and strong desire for international acceptance of research has brought positive changes in the attitudes of clinicians all over India. Investigators, most of who have been trained in Western Europe or the United States, are now consolidating their extensive research experience base and are eager to show the world that India can accommodate large clinical studies.
India announced in December 2001 that all pharmaceutical clinical research must strictly follow government- issued GCP guidelines. These guidelines were formulated by an expert committee set up by the Central Drugs Standard Control Organization in consultation with relevant experts. Consequently, the level of research and ethics in some institutions is now on par with International Standards.
At this juncture it is essential to know the dynamics of CROs on scientific basis. To begin the study, it was felt ideal to begin with the basics of CROs.
CRO is a Contract Research Organization, offering clinical studies, monitoring, regulatory and compliance services for new drug development, medical devices and biologics and combination of products. CROs also provide clinical testing services to the pharmaceutical industry for prescription, consumer and over the counter medications
Trends in Drug Development
With the patent regime fast approaching, globally all Pharma companies are concentrating on new drug development, estimated drugs in drug development have
gone up from 4194 in 1997 to 7067 in 2002, which clearly indicates the trend and necessity for increased services requirement from CROs
Why CROs?
An independent CRO provides committed resources in research, which allows to focus on the highest standards set by the industry, like strict adherence to protocols, excellent clinical practices and complete and accurate documentation. The personal attention to details given by CRO and the ability to provide timely and proficient trials, will speed up the whole process of clinical studies. Most importantly, CROs strive for a humanistic approach to research while maintaining and ensuring the integrity of each study makes them a better choice for clinical studies.
Cycle Time: CRO Vs Sponsor
Cycle time in research trials is an important factor in assessing the drugs efficacy and effectiveness.
Cycle time that can be saved by engaging the services of a CRO is very much evident from the below given graph, which illustrates the time taken by Sponsor when he does the research on his own when compared to outsourcing the same to a CRO.
Global Potential of CRO Business
Global spending for clinical outsourcing is estimated at $ 7.8 billion, which is equivalent to 35% of the total spending on development, outsourced to CROs.
US alone can be a huge value driver for CROs. As United States Spending on R&D is estimated at $ 25 billion, the description of the spending associated with the various phases is depicted in the below given diagram.
Other major value drivers for CROs
1. Continued global expansion: Central/Eastern Europe, Asia/Pacific and Latin America
2. Expanded therapeutic expertise: Cardiovascular, infectious diseases, neurology, respiratory and gastrointestinal
3. Expanded Phase IV services, including consultative pre- and post-launch product planning, publication plan development and medical communications
4. Expansion of regulatory consulting practice
5. Growing biotech focus
6. Continued evaluation of preclinical opportunities, including analytical and drug packaging services and clinical testingCreation of greater efficiencies
8. Reduced costs
India as a destination for CROs
The 2003 budget gave encouraging gestures for R&D in the pharma sector particularly in respect of clinical trials. India is emerging as a major player for conducting clinical research from phase I to phase IV.
Exemption of customs duty for materials & samples will be a great boost to the CROs in bringing samples for trials. Pressure on the industry is also reduced by abolishing the minimum export turnover concept.
Customs duty exemptions for specified pharma and biotech units approved by DSIR for importing equipment for R&D activities will include CROs also as these are capital intensive and require sophisticated instruments for evaluation of drug substances. Income tax holiday for companies venturing into R&D extended by one-year upto 2004 will encourage newer players in R&D field. Speedier customs clearance of clinical trial materials and frozen biological samples will provide a great opportunity for the clinical trial companies to grow and provide much needed service to pharma companies.
The Drugs and Cosmetic Rules Act has been recently amended, whereby no institution will be permitted to undertake clinical trials for a new drug without the permission of DCGI. Further, post marketing surveillance studies (phase IV study) have been made mandatory in case of clinical trials for import and manufacture of new drugs. This will increase the demand for high quality clinical research services.
Advantages of conducting trials in India
Availability of a large pool of treatment-naive patients: The patient population is not only large but treatment naive and from multiethnic and multiracial backgrounds.
Speed: Previous experience has shown that patient recruitment is rapid in India, thereby reducing the clinical development process significantly.
Wide spectrum of disease: Diseases such as multidrug-resistant pneumonia, hepatitis B, diabetes, and some cancers are far more prevalent in India than in the West.
Economy: Drug companies can save up to 30%-50% overall on the cost of conducting trials in India as compared to the West.
Data generation for international standards: Indian data is accepted at all major
conferences and journals.
GATT/TRIPS/WTO: In 1995 the Indian government as part of the WTO agreed to adhere to the product patent regime by 2005. As part of TRIPS, the pharmaceutical industry will have the right to patent products as well as processes throughout the world, including India. Being a member of the GATT, India will have a process and
product patent that will be consistent with the patent laws prevailing in the developed countries.
Investigators: They are mostly trained in Western Europe or the United States, and they now are experienced in participating in multinational trials according to ICH guideline for GCP.
Source data: All hospitals and private institutions store comprehensive source data (mostly in English).
Subject recruitment: Subject recruitment is the most common rate-limiting step in the drug development process. Sponsors normally cannot reduce study timelines, however, without sacrificing quality and incurring increased cost. India offers sponsors the opportunity to recruit subjects quickly while maintaining a high level of quality. The relative cost savings result not only from shorter timelines but also from the low cost of performing studies in India. Due to the high population density of the urban areas and relatively small number of hospitals, recruiting a large number of subjects within a short time frame is not difficult. Also, the accessibility of these hospitals allows for cost-effective monitoring of studies. Subject compliance is an important aspect of clinical trials. Subjects generally recruited in the studies performed in India are not only treatment naïve but also recognize that study participation can offer access to quality health care and medicines that may not be otherwise affordable. As result, subjects are very compliant and are keen to attend all their study visits. An independent study by a global CRO concluded that India has one of the best subject return rates in the world.
A major resource center: Today India is identified as a major resource center for conducting clinical trials and data management services. With its large patient populations, well-trained and enthusiastic investigators, and per-subject trial costs considerably lower than those in developed nations, it is widely recognized as a nation able to offer unique opportunities for conducting clinical trials. Its increased regulatory control and its acceptance of the ICH guideline for GCP further enhance India's reputation as a place to conduct clinical trials.
Conclusion
To make the clinical trial industry in India to grow to over a billion dollars over the next five years, India must be positioned as a destination of choice by way of strict implementation of patent laws, single window clearance of clinical trial protocols for regulatory clearances and "according industry status" to this sector will position Indian CROs in the world map of $8 billion opportunity.
-- The author is Country Head, Firstcall India Equity Advisors Pvt.Ltd, Mumbai