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BRIC by BRIC: Laying a Path to Success

Alex Klim at DHL Supply Chain analyses the challenges and methods of clinical trial logistics in the BRIC countries, including the handling of drugs and equipment

The rise of Brazil, Russia, India and China, also known as the BRIC countries, is very well documented. Much has been written about the potential of these countries, their rapid growth, and how they are becoming important markets for companies to be represented within. Likewise, the pharmaceutical industries within these countries have been discussed at great lengths, as have the reasons why these are important locations for clinical research. Perhaps slightly less well documented are the supply challenges when conducting clinical research in the BRIC countries; most clinical teams will describe these countries as ‘complex’ despite their potential, with supply often being one of the issues that hampers the progress of a clinical trial.

CHALLENGES OF SUPPLY

Conducting clinical research within the BRIC economies is a decision increasingly being taken by European and US companies at the design phase of a clinical trial. While this may not be so prevalent in Phases I and II, by the time the larger patient populations are needed for Phase III trials, clinical teams are more frequently turning towards the BRICs. Fast recruitment across wider demographical parameters, access to patient populations that may have not taken large quantities of medicines and antibiotics all their lives, investigator sites that adhere strictly to all trial protocols, local endorsement by key opinion leaders and test results from local inhabitants that may be crucial when it comes to seeking marketing approval are all factors that make the BRICs appealing.

But the enthusiasm can run out quickly: with complex regulatory landscapes to navigate, long clinical trial approvals, as well as language and cultural barriers, a great deal of unplanned expense and further delays can be added to a project. Experience and, most crucially, good local representation and relationships have helped sponsors and clinical research organisations (CROs) mitigate risks and better manage more realistic timelines.

Once the clinical trial approval (CTA) is obtained, prior to site initiation, the drug has to be available in-country; the vast majority of large and medium sized pharmaceutical manufacturers and biotechs still like to manufacture their research and development (R&D) products in their European and North American production plants. This invariably means applying for an import license and having to go through the BRIC country’s importation processes to supply a local depot. Although it is not completely impossible to operate without it, it is highly advisable to have a local depot to store bulk medical supplies in each of the BRIC countries; this is largely down to the long lead times around the importation process, or in some cases down to local regulations.

The first importation into a BRIC country is often the most painful as the slightest error can cause a lengthy delay in the customs clearance process. House airway bills not tallying up with the master airway bill, having copies of certain documents instead of originals, or even having a typo on the packing list are all reasons that have been used to detain shipments for a number of days. Even when the process is error-free and followed impeccably, disagreements can arise with customs officials, such as what the declared proforma invoice value should be, which can further impound a shipment.

Luckily, the major airports within BRIC countries all have refrigerated areas to store temperature sensitive products, in case the shipper carrying the goods has a maximum validation period. The challenge that can follow, however, is that a refrigerated vehicle must be organised to move the products from customs to the depot once customs are cleared.

Once the first import has occurred and the local depot is stocked, site initiation can take place, followed by recruitment. To ensure that stock does not run out at the depot, the lessons learned from the first import must be implemented quickly so that the precarious import process can run smoothly thereafter. Failure to supply can have a number of impacts on the study, both from a cost and time perspective. The cost of not supplying can be a big issue; there are many expenses associated with recruiting a patient, such as initiating and training up a site, paying investigators or research organisations that are recruiting patients, the kits and ancillaries associated with the clinical trials and so on. If the manufacturing cost of a drug is for example €50 per unit, the cost of losing a patient once recruited if the drug is not available can run into thousands of euros.

In the BRIC territories the cost of not having drugs available for a patient once recruited is often countered by oversupplying; it is not unusual to have an overage of supply of about 280 per cent as a lot of the drug is put into each country to ensure there is no chance of not having the right drug when the patient turns up. As a result, tax and duty costs will be high but, more significantly, since they often have short shelf lives due to limited stability data, write-offs will not just include the production value of the drug and logistics cost, but also wasted tax and duty charges.

Not only will supply issues cause delays that can affect the ability to hit project milestones, they will also consume management time that could be better spent elsewhere in the development process.

Big multinational pharmaceutical or medical device manufacturers sponsoring clinical trials will often have large affiliate or partner networks that will provide local expertise and knowledge; having a pied à terre in the country can help navigate through the regulatory authorities, act as the importer of record (IoR) and provide warehousing space (via an in-house warehouse or local sub-contractor).

A number of other supply chain issues arise when supplying the BRIC countries, but these are more individual to the specific countries.

BRAZIL

Brazil’s pharmaceutical market is worth approximately €19 billion and is experiencing continual growth, despite the recent economic crisis, making it an even more popular location for international manufacturers to set up in. With this local presence, they have also intensified clinical research capabilities and increased production to meet internal demand and respond to regional needs. Of the BRIC countries, Brazil has the most registered clinical trials with nearly two per cent of the global volume. However, Brazil can also be the most problematic of the four to operate in.

Gaining the CTA is a lengthy process, averaging approximately 24 weeks; an added burden is that all documents required as part of the submission have to be translated into Portuguese. This results in Brazil often being one of the last countries to be initiated in a global clinical trial.

Once the CTA has been granted, each import into Brazil requires an individual import license; customs clearance can take a few days, provided everything is in place and a local broker with a thorough understanding of all the rules and requirements is used. An ANVISAapproved warehouse must then be used to receive the bulk IMP shipment.

Key to the process downstream is establishing who the IoR is, as they will raise the first invoice for the consignment when importing it, and therefore all subsequent invoices for each individual domestic movement out of the local depot thereafter. This pre-printed invoice, which must physically travel with each product movement, is known locally as ‘notas fiscais’ or ‘nota fiscal’. There are a number of local and federal taxes to keep on top of. However, having all the IT links in the federal tax system in place, and being able to pre-print the nota fiscals accurately at the local depot can take time, and if not planned for can cause considerable delays.

Supplying the investigator sites with the lab kits required to extract and store the clinical samples needed for testing can also be challenging; if they are to be imported into Brazil and shipped straight to the investigator site, the investigator must sign a tax form that physically joins up with the lab kit in customs, prior to being able to do the onwards transport. Ensuring that the investigators sign the form, then getting it to the customs officer prior to shipping, can be a time-consuming activity.

Finally, security is worth mentioning. Brazil has notoriously high crime rates which extend to cargo theft; although this may affect clinical supplies less than more desirable retail goods, it is still an important risk to mitigate.

RUSSIA

Russia’s pharmaceutical market is worth approximately €14 billion, and although manufacturers have the advantage of being able to produce cheaper products, they are unable to compete with imported products in terms of quality. This, coupled with Russia’s vast size and population, makes Russia an attractive market for international pharmaceutical companies, despite a very low per capita expenditure. It is also worth noting that Russia is the 12th largest healthcare market in the world. Lower cost, fast recruitment and a very large patient population to draw on have made Russia a popular destination for global clinical trials.

For trial supplies, the use of a local depot is required by law. Each depot needs to take IoR responsibilities and manage the importation process. An ‘umbrella’ import license must be obtained at the start of the study to cover all imports, but an individual permit to ship must also be obtained for each import going into the country. Acquisition of the permits can be drawn out, and even when all paperwork is in place, customs clearance can also take an unexpectedly lengthy amount of time. Much of the country’s wealth is centred on the major cities of Moscow and St Petersburg, so a strong presence in these cities is recommended for reaching markets and dealing with government bureaucracy. However, having a depot in just one of the two cities is sufficient.

It is important to keep on top of any regulatory changes too, as a few have occurred in the last year that have affected imports. For example, it was decided recently that if a clinical trial drug is already available locally (as a marketed product), it cannot be imported into Russia (as part of a clinical trial) unless a special certificate to do so has been obtained; this affects drugs that are being tested for new indications. Also, customs officers are able to change the value that they deem an IMP to be worth, which generally results in the price increasing. If a sponsor is relying on the local IoR or depot to clear this amount, funds sometimes have to be made available in-country for the additional amount to be covered, which can cause even further delays.

Clinical trials storage and distribution are regulated by the Russian Ministry of Health in the same way as commercial pharmaceuticals, with some of the standards being significantly less stringent than, say, EU regulations. Therefore getting a local depot to comply with EU Good Manufacturing Practice (GMP), for example, can be challenging, yet it is crucial to maintaining globally consistent standards in a global clinical trial.

INDIA

India’s pharmaceutical market is worth approximately €14 billion, and is the world’s fourth largest producer of pharmaceuticals by volume, accounting for around eight per cent of global production, the majority of which is generic drug manufacturing. This resulted in Indian researchers focusing more on making a difference ‘now’, rather than several years into the future, thus concentrating efforts on ‘reverse engineering’ or product copying, with strengths lying in lead optimisation and chemical synthesis capabilities.

With the tightening of patent laws and assurances from the Drug Controller General of India (DCGI) of greater collaboration with international patent offices, India is now increasingly encouraging its large pool of scientists and expertise in mathematics and information technology to move towards clinical research. Lower ‘cost per patient’ averages and a large and diverse patient base, allowing for fast recruiting coupled with a strong scientific infrastructure and an established base of local CROs, have made India an attractive place for clinical trials.

The Drug Standard Control Administration under the Department of Health is the body that approves new drugs.

Importing into India is the least problematic import process of the four BRIC countries. An import license is granted at the start of the study for a specific period of time, and needs to be presented at customs for each import (the original signed document is needed). If the sponsor wants to hold on to the original document for safe keeping, couriers must be used for each shipment to get it to customs and back. Although India is the only BRIC country where it is possible to ship into the country and deliver direct to an investigator site, it is still advisable to use a local depot due to the sheer size of the country and extreme weather conditions.

Sourcing a partner warehouse in-country can be tricky, as many organisations offering pharmaceutical grade warehousing for clinical supplies often have generic manufacturing businesses themselves; this can make sponsors nervous about storing their IMPs in such facilities. The alternative is using CROs that have the right storage capabilities.

Cold chain shipping can also be problematic; in India it is the norm for couriers to arrive at depots to pick up cold chain consignments using their own shippers. The couriers then pack the boxes themselves and use their own ice packs; while in transit the couriers will change the ice packs to maintain the cold temperature required. Managing the cold chain in this way – as opposed to a depot packing and sealing a validated shipper that has been stress tested to hold a temperature for a specific amount of time (as is the practice everywhere else in the world) – often leads to an increased amount of temperature deviations. Ensuring that the local depot manages the cold chain (and the shippers are not interfered with while within the validated time period) is an important factor when trying to maintain globally consistent cold chain standards.

Extremely hot weather conditions, torrential rains, natural disasters and an unfamiliar national holiday schedule are all factors that could affect supply. If the cold chain aspect can be addressed, and a good local depot is partnered with, India can be one of the easier BRIC countries to operate in from a supply point of view.

CHINA

China’s pharmaceutical market is worth approximately €44 billion, and is expected to overtake Japan by 2015 as the largest south east Asian market and the second largest in the world. Although the pharmaceutical industry is responding by setting up operations incountry, clinical trial approvals may not have spiked at the rate one would expect – China is second to Brazil in terms of registered clinical trials (see Table 1, page 22) yet the pharmaceutical market is twice the size of Brazil’s. This can mostly be put down to the lengthy CTA process, which can take up to a year. Measures are being put in place, however, to reduce this time and encourage clinical research to take place in China; the State Food and Drug Administration (SFDA) is keen to move China’s more traditional focus on copying drugs and herbal medicines to discovering and marketing medicines with a global potential.

A number of exemptions from import duties and other custom taxes for companies conducting clinical research are available, with greater incentives for companies entering into joint ventures or transferring technology to Chinese partners. The SFDA co-ordinates research through its China Administrative Centre for New Drug Research and Development.

Most of the supply issues in China can occur when importing the trial materials; different rules and requirements will apply for different products. Therefore a great deal of consultation is required with the Chinese authorities prior to shipping a trial material for the first time to understand the rules and regulations surrounding the products. This can cause considerable delays if not conducted sufficiently in advance of any shipment. A particular product can require a number of different certificates to be applied for prior to shipping. For example, an ‘endangered species certificate’ is needed if any ingredient is derived from what the Chinese regard as an endangered species, which must be applied for prior to each import and can take 30 days to be granted.

Like the other BRIC countries, it is advisable to use a depot to hold bulk stock. Once a product has been cleared and is in the country, supply is pretty straight forward. The main supply issues to consider, once in China, are lead times to reach further regions, or contingency plans when natural disasters occur such as flooding and earthquakes.

CONCLUSION

It is clear that significant opportunities exist to advance clinical research in the BRIC countries. Getting access to these opportunities by being able to supply the investigators with the trial materials in a planned and timely manner, without of course oversupplying, is an important hurdle to overcome if high rewards are to be achieved. Complexities and issues have been highlighted for each BRIC country, which in many cases are not insurmountable, but require a focus on supply chain management. With so much potential to uncover in the BRIC countries, and with the large cost of failure should drug supply hamper the progress of a clinical trial being so high, considering the logistics of entering BRIC countries should be a key activity.


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Alex Klim is the Product Manager for DHL Supply Chain’s Clinical Trials Logistics Service (CTL). Previous roles in DHL include implementing materials management programmes in UK hospitals, global depot setups and freight management. Alex has a Masters in Logistics and Distribution from Westminster University.
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