Alex Klim and Eddie Aston of DHL Supply Chain examine the methods and challenges of integrating emerging markets in clinical supply chains
Over the last 10 years globalisation of clinical research has been manifest. Speeding new treatments through the clinical trials research phases, involves an increasing number of countries being considered for provision of key patient populations necessitated by clinical data requirements. Naturally this geographical dispersion brings complexity to the overall project management of a clinical trial, and thus leads to sacrifices in efficiency such as overproduction (safety stock), inefficiency (multiple stakeholders and process overlap) and budget overruns. Mergers and acquisitions, rationalisation of R&D budgets, the end of the ‘blockbuster era’ and the need to bring more treatments into production have challenged key stakeholders in the clinical environment to react, including those responsible for the supply chain.
GLOBALISING CLINICAL RESEARCH
The US, Canada, Germany, France and the UK are among the countries that commonly see the lion’s share of clinical trial applications approved. The research centres are well-equipped, investigators promise recruitment to meet the protocol specifications, and the regulatory landscape is mature, wellcharacterised and thus easy to navigate. In addition, key opinion leader endorsement is readily available and the supply strategy is robust and well executed. These advantages come at a price; the average ‘cost per patient’ is comparatively high in these western locations. However, to say that cost reduction alone is the spur that has driven clinical research away from the West to new emerging countries would be discourteous to the high academic standards that have long been observed in many of the so-called ‘developing’ nations. Other key drivers that are globalising clinical research include:
- Rapid access to the desired patient populations, with fast enrolment rates
- Competitive recruitment – competing locally for patients across key demographics in a particular therapeutic area
- Strict adherence to clinical trial protocols
- Fast trial approval timelines
- Marketing approvals – some countries see marketing approval granted only where clinical data from the approving country is presented
- Clinical research standards comparable to the better known western European centres
- Overall lower ‘cost per patients’
MAPPING A NETWORK
Although the pharmaceutical research and development (R&D) industry has little need to implement the kind of austerity measures that so many other industries and governments are facing, efficiencies need to be found, and the supply chain is seen as a source to deliver such efficiencies.
So what does a ‘great and efficient’ clinical supply strategy look like? An example of an ideal situation for a global Phase III trial would be for a good portion of a trial to take place in the established, big five nations (Canada, France, Germany, the UK and the US), while the remainder would be spread across the world in the top research centres specialising in the therapeutic area in question. Able to recruit the right patient populations in a timely manner, these countries ideally would have lower ‘cost per patient’ averages, and ‘accommodating’ health authorities and customs officials. Other desirable elements within the trial design would be to have less ‘overage’, saving not only upstream on production costs but also downstream on import tax and duty – that is, only paying taxes on investigational materials used in the clinical trial and not wasted resources. This is a proven, simple supply network to manage. The drug should be made available to an investigator at the right time anywhere in the world, earning the sponsor a reputation as ‘sponsor of choice’ for investigators to aspire to work with. This is achieved by understanding the needs of the investigator, being well organised, and not taking up space at the hospital or clinic with products that will mostly be unused. With these advantages in mind, how can addressing a clinical supply strategy help to achieve this ideal?
A question increasingly asked when planning a clinical trial’s supply strategy is how many depots are required in order to fulfil the requirements of planned investigator sites? The legacy attitude – that it is acceptable to have a depot in every country taking part in a clinical trial – is being challenged increasingly. Major manufacturers that sponsor clinical trials often have large networks of affiliates and partners across the world that they would feel obliged to use when operating in that country.
Advances in ‘in transit temperature control’ have improved and cross-border shipping lead times have diminished, obviating the need for local in-country depots to store products. Directto- site shipping strategies, using certified and monitored temperature-controlled shipping media, are increasingly employed. As a result, the perceived risk of this shipment method is reducing rapidly.
Consequently, regional supply models are increasingly sought, whereby one main distribution hub in each region cascades supplies to the vast majority of investigator sites in each country. Table 1 shows the regional spread of clinical trials across the world. How best to build an appropriate network must now be considered.
|Table 1: Breakdown by region of registered clinical trials
| Region name
||Number of studies
| North America
| Middle East
| Source: www.clinicaltrial.gov
Across Europe it is already common practice that only one depot is used to store and distribute the investigational medicinal product (IMP). With the acceptance of the EU harmonisation regulations in member state countries, IMPs can be shipped from a central stock-holding location within the EU directly to an investigator site. This facilitates a 24- to 48-hour turnaround time, from an order being placed on the interactive response technology (IRT) system through to delivery to the site. This allows logistically efficient supply by reducing transit times and reduces risk to the product through fewer handling nodes in the supply chain. This regional stocking model for IMPs has spread further in Europe, including the Baltics and some eastern European countries.
Countries like Estonia, Croatia, Serbia and Montenegro are all good examples of countries that previously may have needed an in-country depot to supply IMPs, but have since relaxed import legislation so that a direct-to-investigator site strategy is possible. Ukraine remains a country that is a popular destination for clinical trials, but the amount of time taken to obtain an individual import licence and frequent issues on import have resulted in a direct strategy being unfeasible. Local storage is therefore required in Ukraine. Currently, the most popular countries to have a European hub location are Germany and the UK, while Germany may be geographically better located within mainland Europe and possibly closer to where an investigator site centre of gravity could be mapped, the UK is recognised as having more frequent flights scheduled out of its airports, in turn providing shorter European transit lead times.
50 per cent of the total clinical research that takes place globally happens in the US and Canada. Although, geographically, this is a very large area, domestic air travel is so comprehensive that a single storage point could easily service all investigator sites within the two territories, with a maximum delivery time of 48 hours. However, it is not uncommon for it to appear viable to use a depot in each country due to the sheer volume of orders that can take place. Delivering direct to investigator sites in the US and Canada out of European hubs is also achievable.
Some of the fastest growth in clinical trial applications is currently taking place in Asia. This can largely be attributed to the good work that global CROs have done by establishing themselves within these territories and by familiarising themselves with the regulatory landscape. Singapore has quickly become the prime location to service these regions due to its free trade zones and easy to navigate ‘import for re-export’ status. Countries such as Korea, Taiwan, Thailand and Singapore itself see the largest amount of clinical applications in Asia, and are made more accessible through the tried and tested Singapore regional hub.
There are two notable countries that still do not allow crossborder IMP shipments to move quickly into the country: China and Japan. It is a similar case for Russia (in North Asia) that stipulates that a local depot must be used, but this does not deter sponsors: to obtain marketing approval, having data available from Russia is important and of course their recruitment rates are impressive.
South Asia, notably India, can be accessed via a regional depot, as direct to investigator site shipments are possible. Due to the vast geographical spread of the country, and extreme weather conditions (in particular high temperatures), it is more advisable to use a local depot.
Generally speaking, Asia is an emerging market that is becoming an increasingly attractive place to conduct clinical research. Although the three largest healthcare markets cannot be serviced by a regional distribution hub, it is feasible in most of the other countries in the region, thus making these countries increasingly attractive to clinical teams.
The largest healthcare market in the Pacific is Australia, and the clinical research concentration in the area matches this. For a number of years many sponsors operating in the Pacific region have preferred to store IMPs in Australia from which to supply New Zealand and the surrounding Pacific islands. Some supply strategists have also opted to use Australia for regional distribution within Asia, which could be viable from a lead-time perspective. Better tax management, however, can be unlocked using the Singapore hub.
Although the Middle East makes up just three per cent of the total registered clinical trials in the world, some of the larger manufacturers are considering ways to increase their activity in this region.
Currently, it is very much the case that a local depot is used in each Middle Eastern country taking part in a global clinical trial. Israel, Turkey, Egypt and Lebanon are all popular countries in the Middle East region, with some strong and fairly specialised investigator sites. However, while these countries figure in many lists at the start of a study, many drop out prior to the trial commencing. This in part is due to the complexity of supplying these countries, and partly due to some of the long administrative processes that are required to conduct research in these territories.
Direct-to-investigator site strategies are a fairly new occurrence in many of these countries and are often greeted negatively by local affiliates or partners. This is largely due to the unfamiliarity of such supply strategies. Israel is the most popular Middle Eastern destination for clinical research, but is still only accessible via a local depot.
Often a global clinical trial will only have a small number of investigator sites in each Middle Eastern country, which are deemed too few to warrant the cost of using a local depot. Potentially, this can tip the balance and result in the country dropping out of the study.
A country that is well connected to the Middle East via a comprehensive flight schedule such as the UK can reach all the key countries’ capital cities faster than a poorly connected country within the region itself. However, the high temperatures within the region can reduce the certified period of the shipping media, making a local hub preferable for more temperature-sensitive products.
As clinical research activity grows in the Middle East, the need for a local regional hub will increase. The most suitable locations for this would be in one of the many free trade zones, such as Dubai. Combining new and modern logistical infrastructure within a free trade zone is a good way of unlocking the potential that is offered by investigator sites in the Middle East. This does depend, however, on finding practical ways of operating a direct-tosite strategy across the region.
A similar approach can be taken in Latin America (LATAM). By using a regional hub that is located in a free trade zone (for example Panama or Uruguay), and by choosing countries that can provide fast recruitment and high per-site-enrolment levels, such as in Peru, Colombia, Guatemala, Costa Rica and Ecuador, all can be accessed using direct-to-investigator site strategies. LATAM has undoubtedly seen an increase in clinical trial approvals at the expense of the more traditional centres in North America.
While the highest concentration of activity in LATAM takes place in Brazil, Argentina and Mexico, Peru, Colombia, Guatemala, Costa Rica and Ecuador, all offer opportunities. Their popularity will grow as they become more accessible via direct-to-investigator site strategies.
Previously, many LATAM countries were perceived as ‘risky’ to operate in, so invariably depot strategies were sought within each country. Brazil, Argentina and Mexico still require the use of a local depot due to import permission lead times, but they continue to be popular countries to conduct clinical research in despite currency challenges in Argentina and a complex tax system in Brazil.
Moving to a more direct supply strategy where only an absolute minimum of depots is used can mean that more countries are integrated into a global clinical trial. This is not the only integration that takes place; data integration can also be improved greatly.
With better inventory information, production costs can be managed upstream more effectively, with particular regard to reducing the amount of ‘overage’ manufactured (with confidence in assurance of the supply chain). A major pharmaceutical player has seen rationalisation of its network driving a 280 per cent overage level, decreasing to an average of 100 per cent in supplies manufactured. They are now targeting 75 per cent.
By having better inventory visibility, sharper decisions can be taken about how much stock an investigator site needs to hold. With more effective management of reorder levels, without introducing the risk of not having the IMP at the right time, investigator sites do not need to be oversupplied. For the sponsor, the benefit is less risk of wasted products, while the investigators no longer have to cope with having fridges that are full with drugs that they may not use. It can give them a better experience of working with the sponsor in question.
With regional distribution, in particular when using free trade zones such as those in LATAM, Asia and the Middle East, control of taxes and duty spend can be improved since, in principle, it is only the drug needed for the study that should be shipped. As there are fewer stock write-offs, and supply strategies are better planned, costs become more predictable. This makes the study’s balance sheet easier to manage, in turn reducing budget variances.
Of course it can be a big step to move from the more familiar local depot approach to the regional distribution model, but many cost benefits and tighter controls become achievable. There will always be certain countries that will need to have a local depot for regulatory reasons, or simply due to the size of the country.
The degree of risk related to shipping cold chain products across the world must not be overlooked either, but this risk can be assessed, managed and minimised. Transport costs will rise of course, but this is offset easily by reducing storage costs, global depot maintenance costs (surveillance audits and so on), reduced overage and reduced tax and duty bills. The cost benefit of having a rationalised network and the upstream savings effect make the change compelling.
Many sponsors of clinical trials are working towards the goal of rationalised supply models to service their clinical trials, or are considering the idea. Some have forged ahead alone and rationalised their own network, while others have sought supply chain specialists (such as logistics service providers) to make the transition as smooth as possible.
Examples of rationalisation programmes range from sponsors moving from a network of over 40 depots to service their global projects, to 19, without excluding any countries. A network study for another manufacturer found that 80 per cent of their global volume could be serviced by just three regional hubs (as opposed to the 12 they were using), and 88 per cent with five regional hubs.
While depot networks are being reduced, the ability to service research centres in emerging markets is increasing. A regional distribution model can act as an enabler in unlocking all the benefits that the emerging market research centres can offer. If a ‘direct to investigator site’ strategy is viable and trusted, then supplying the sites becomes less of an issue to a clinical team and more manageable from a budgetary perspective.
The ability to better monitor and control inventory in the supply chain, paying taxes and duty only for drugs that are going to be used, and, finally, the reduction in management time surveying vast depot networks, will all help to drive an inclusive strategy that will successfully integrate emerging markets into clinical research supply chains.