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International Clinical Trials
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As China looks to become a leader in the pharma scene, what should be
done differently to create an R&D site culture that incentivises
innovation, and what attributes open the door to this burgeoning market?
For nearly two millennia, China stood as the world’s most innovative and
largest economy – only to have been displaced from the top spot 200
years ago. However, the tables are turning once more, as pharma
companies bet big by shutting down sites in Europe and the US and
expanding their R&D operations in China, particularly in Shanghai
and Beijing. A large proportion of the pharma industry believes
pharmaceutical innovation will accelerate in Asia and that local R&D
will develop a more customised solution to these growing and
increasingly important markets. The question is, will the big bet pay
off? And, if so, how do you pull it off?
From Soup to Scale
In the late 1990s, scores of multinationals were catching on to the
cost-cutting benefits of sending work to China – but not pharma. The
industry was bulging at the seams with profits and confidence; whatever
money could be saved by shifting R&D to Asia would have seemed
inconsequential compared with the billions of dollars at stake in the
development of a new blockbuster. In fact, as recently as 2002, the
Chinese pharmaceutical R&D landscape resembled a ‘primordial soup’ –
with lots of energy and potential, but very little in the way of
organisation or sophistication. What a difference a decade makes. In the
last 10 years, driven by the need from multinational pharma companies
for increased costeffectiveness, this primordial soup has evolved – as
is often the way – into a ‘higher order’ entity. As such, in a
relatively short space of time, we’ve gone from the early days of
western scepticism and disorganisation, to the rapid expansion of CRO
outsourcing services, to way, way beyond. Evolution has recently
accelerated too, with pharma companies now displaying unprecedented
levels of commitment to China-based R&D – complete with large-scale,
eight-figure financial investments. Their commitment is often coupled
with the shutting down of sites in Europe and the US, necessarily, and
so is not without significant risk. In addition to the need for
increased costeffectiveness, the move for many forward-thinking pharma
companies is motivated by their desire to tap – or at least try to tap –
China’s massive (and increasing) healthcare market and the
profit-potential housed there. Henrik Glarbo, previously Regional
Managing Director at Mundipharma Asia, has “seen the rise and rise of
China from the inside for over 20 years,” and predicts “it will be the
world’s biggest market within 15 years.”
Getting Their Toes Wet
Pharma’s first foray into China-based R&D often took the form of CRO
outsourcing. At the beginning of this century, hundreds of local
biotech companies battled it out with mixed models of income-generation –
attempting to subsidise their own drug discovery (or even generic
development) with services to other biotechs, universities, and
multinational pharma companies. They did so with varying levels of
sophistication and success. However, although clinical trial outsourcing
had taken place for some time, chemical synthesis was rare, molecular
biology experiments only happened on a tiny scale, and animal studies
were practically nonexistent. Pharma got its toes wet, but it was only
after the Chinese R&D infrastructure (physical, legal and economic)
had undergone radical, much-needed improvements that it decided to jump
right in.
Come on in, the Water’s Fine
It didn’t take long – in a relatively short period of time, pharma’s
initial trepidation transformed into full-on enthusiasm. The second half
of the last decade saw a series of high profile announcements from
multinational pharma companies, communicating their commitment to
China-based R&D. As early as 2006, for example, AstraZeneca
announced a $100 million commitment to create the company’s Innovation
Center China (ICC), which was to be located in Shanghai. In 2007, GSK
announced the establishment of a $40 million Shanghai R&D centre,
primarily focusing on neurodegenerative disorders. Both these sizeable
investments were soon trumped. During his visit to China in November of
2009, Novartis Chairman and Chief Executive Offi cer Daniel Vasella made
this stunning announcement: his company would commit $1 billion to
expand and upgrade its Shanghai laboratory facilities, creating the new,
formidable China Novartis Institute for BioMedical Research (CNIBR) in
Shanghai. Hot on Novartis’ heels, Novo Nordisk announced their own
commitment: an investment of $100 million in its Beijing R&D
facility, and to increase the facilities from 100 to 200 employees by
2015. And these companies were far from alone in their commitments to
China-based R&D – many others, including Novo Nordisk, Genzyme,
Sanofi-aventis, Johnson & Johnson, Merck Serono and
Boehringer-Ingelheim have also established (or plan to establish)
R&D bases in mainland China, often at the expense of their western
facilities. Many see Asia as integral to any long-term business plan. As
Patrick Keohane, Head of R&D, Asia-Pacific and Japan at
AstraZeneca, puts it, “Asia should now be at the centre of any
significant company’s clinical development strategy.”
What’s to Gain?
Of course, these companies will continue to utilise the hospitable
Chinese environment for more cost-effective R&D with western
relevance. But new opportunities are unfolding for the development of
drugs, especially relevant for the Chinese market, and Novartis et al
will put their newly acquired local knowledge and facilities to use in
broadening business horizons and building up sales in China, and Asia as
a whole. With their investments, pharma companies are buying much more
than just research facilities – they are, potentially at least, buying a
slice of an extremely large, extremely lucrative pie. Their investments
will also allow them to compete for the top local talent from China’s
growing PhD and pharmaceutical research scientist talent pool – which
will be key to long-term success in the increasingly important Chinese
(and Asian) market.
Going to Trial
It used to be the case that the big advantage of conducting clinical
trials in China was cost savings. A study by FastTrack Systems in 2006
suggested that companies could halve their clinical trial costs. The
survey gave China a 0.52 index, compared with 1.0 for the US, 1.09 for
the UK and 1.58 for Germany. But today, China’s attractiveness is more
market-driven. One aspect is developing new drugs for the Chinese
market; another is that a well organised clinical trial programme can
now accelerate speed to market. Where delays were measured in years,
today they can be measured in months. There are around 140 CROlicensed
clinical service providers in China, with an even split between domestic
and foreign. It’s a very dynamic situation as evidenced by a 144 per
cent growth in the number of clinical trials over a four-year period.
Annual compound growth in China is now around 12 per cent.
But there are also significant growing pains. When it comes to the
trials, local providers have sometimes proved poor in key issues around
data quality and record keeping. Other challenges include intellectual
property protection, sample export/ import regulations and clinical
research talent, recruitment and retention. Where local providers have
proved valuable is in the area of regulatory compliance. Experience
suggests that the ideal strategy for large-scale trials is a close
working relationship between a large CRO and a local clinical service
provider to successfully negotiate the regulatory hurdles that exist in
China. Areas where they make the difference are:
- Local know-how in developing and executing a robust regulatory strategy
- Developing good relationships and effective communications with the State Food and Drug Administration (SFDA)
- Preparation of submission dossiers
- Study sample management and fit within the regulatory framework
China is moving fast to create a positive environment for undertaking
global trials in the growing Chinese market. The five-year planning
cycle provides reassurance that progress will continue to be steady and
directed toward a positive outcome. But one of the major challenges is
finding enough regulatory professionals to staff the SFDA and therefore
speed up the process. The situation is currently exacerbated due not
only to a shortage of staff, but to their frequent rotation to minimise
any opportunity for inappropriate influence which generates delays.
A Case in Point
Eli Lilly has been actively expanding its operations in China since the
1990s. It now has operations and R&D facilities in Shanghai, as well
as manufacturing facilities in Suzhou and more than 30 offices
throughout the country. In 2011, however, Eli Lilly announced plans to
deepen its investment in China by opening a dedicated diabetes research
centre in the country, strengthening the firm’s chances of delivering
new, innovative therapies to treat the region’s rising number of
diabetes patients. And they’re not the only company betting big in this
way – “the diabetes epidemic in China was the core reason for my
pioneering the move of Novo Nordisk to China in 1993,” says Glarbo.
Eli Lilly is already the fourth biggest player in the global market for
diabetes treatments, behind Novo Nordisk, Sanofi-aventis and Takeda, and
all these companies are now gearing up to respond to soaring demand for
diabetes medicines throughout the world. Nowhere will the battle for
market-share be more evident than in China. The country is already the
world’s third largest pharma market, as well as the largest in Asia –
sales in China are growing at an average rate of 22 per cent a year,
compared with an average increase in global drug sales of 6.2 per cent.
With obesity and other diabetes risk factors on the rise, so are sales
of diabetes treatments. The World Health Organisation (WHO) predicts
that, by 2025, the number of diabetics will increase by around one-third
worldwide. Around 80 per cent of all new cases will be in developing
countries. It is expected that, by 2030, seven out of the 10 countries
with the highest number of diabetics will be in Asia. Indeed, according
to the International Diabetes Federation, “it would appear China has
overtaken India and become the global epicentre of the diabetes
epidemic.” In light of this unmet need and massively lucrative
opportunity, many of the pharma companies mentioned above have
identified diabetes as a priority area for both R&D and
manufacturing in China.
However, simply transposing the traditional, western ways of working
onto this new market won’t do. There are “key differences in the
molecular basis of diabetes in Chinese and other Asian populations”,
according to Eli Lilly. Therefore, the successful development of new,
targeted therapies will depend on a new, targeted approach to the
problem. Ultimately, it will depend on R&D that is tailored to both
the Chinese environment and population. And this requires local
knowledge. China’s own talent pool is high and rising – and it must be
tapped effectively if there’s to be any chance of meaningful innovation
in China. Or so says Amar Kureishi, Vice President and Chief Medical
Officer, Asia Pacific at Quintiles: “China is different, but if you
understand and respect that difference, it’s a country that will work to
produce a win-win relationship for you and your company.”
Making the Most of It
For some years then, pharma companies have repeatedly announced
large-scale financial commitments to China. Often, however, significant
portions of these commitments go towards non-innovative activities.
Despite these incremental, pharma-driven improvements in national
innovation, China has yet to claim a seat at the table among the world’s
major pharmaceutical R&D centers. Is this about to change?
According to Kureishi, “China represents an opportunity for the industry
to recreate drug discovery and development; done well it could be
transformational for our industry.” And with improvements to its
physical and legal R&D infrastructure, a restructuring and updating
of its economy, as well as a commitment to improving access to
healthcare and exportation of home-grown biopharmaceuticals, China is
looking set to become an R&D superpower. Last year, Quintiles CEO
Dennis Gillings speculated that China could eventually unseat the US as
the world leader in biotech R&D. And those pharma companies with
considered, explicit China-based recruitment strategies will be
best-placed to take advantage of this new R&D order. There’s no
doubt that the race is on for the first Asian blockbuster. But who will
win it? |
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