Outsourcing in Drug Development
additional equipment, etc. This model is fading, but apparently not all outsourcing is strategic; contracts of both models continue to be employed relative to the sponsor’s specific requirements and outsourcing strategy.
Globalisation of Clinical Research Ageing populations – with the increasing prevalence of chronic diseases resulting in a growing demand for improved therapies – are the main driver of high growth of the pharmaceutical and biotechnology markets worldwide. The globalisation of clinical development programmes and the increasing complexity of trials are leading to a need for larger trials and greater numbers of trials. Drug development has been multinational for several decades, but the shift from the US and Western Europe towards emerging countries is more recent. The practice of moving research involving human subjects from developed countries to developing nations has grown in recent years, raising a number of ethical and scientific issues that need to be addressed.
Glickman and colleagues2 reviewed 300 articles reporting the results of
clinical trials in the New England Journal of Medicine, The Lancet and the Journal of the American Medical Association in 1995 and 2005. They found that the number of countries serving as trial sites outside the US more than doubled within 10 years whereas the proportion of trials conducted in the US and Western Europe decreased. What led to this dramatic shift in the location of clinical trials? According to Glickman and co-authors one explanation is that pharmaceutical and device companies can realise substantial cost savings by conducting trials in developing countries, so they are increasingly moving phase II and III trials to places such as India and South America.
Shortened recruitment time due to easier access to patient populations is still the main driving force, although interest in market access to growing economies is catching up. According to a Global Insights report,3
Many people in developing countries tend to be poorer and they have extremely limited access to healthcare compared with citizens in the US or the EU. For such patients clinical trials can be seen as a means to receive medical treatment and care for free.
According to article 17 of the Declaration of Helsinki:5 “Medical research
involving a disadvantaged or vulnerable population or community is only justified if the research is responsive to the health needs and priorities of this population or community and if there is a reasonable likelihood that this population or community stands to benefit from the results of the research.” This matter is subject to on-going intensive discussions between the main stakeholders (regulatory authorities, ethics committees and pharmaceutical companies).
Economic Outlook
Forecasts predict that there remains sufficient growth opportunity for the CRO industry until 2015. The past year has been turbulent for the economy, with increased merger and acquisition activities of pharmaceutical companies in order to expand their market capitalisation and to tackle the problem of thinning pipelines. Complete R&D portfolios have been subject to thorough reviews. Sanofi-Aventis for instance announced the discontinuation of 14 development programmes, four of which had already reached phase III, leaving 51 projects in the development pipeline. Biotech companies have been struggling to complete financing rounds and to manage the process of projects without increasing the cash and burn rate.
The recession resulted in a reduced growth rate in 2009,1 but the
mid- and long-term effects of the recession with downsizing of R&D in the pharmaceutical industry have created opportunities for contract researchers.
the so-called BRIC countries (Brazil, Russia, India and China) will account for a third of global gross domestic product (GDP) in 2030, while other countries such as Japan and Germany will fall behind and countries such as France and Italy will even leave the top 10 rankings. Taking this into account, numerous pharmaceutical companies have been investing in some of the BRIC countries, because they have seen their competitors do so. In such a competitive environment late entrants into those markets may be unable to take advantage of the potential opportunities that exist, as the early birds have already gained a head start.
A matter of concern for competent authorities is the question of whether a robust framework exists for the oversight and conduct of clinical trials, no matter where in the world the sites of the clinical investigators are located and patients are recruited. This framework is not in place, as the European Medicines Agency (EMA) suggests.4
1. 2.
Contract Research Annual Review 2010, Biopharm Knowledge Publishing, 28 June 2010.
Glickman SW, McHutchison JG, Peterson ED, et al., Ethical and scientific implications of the globalization of clinical research, N Engl J Med, 2009;360(8): 816–23.
3. 4.
The global outsourcing market is different compared with other industry areas such as steel or car production where two or three companies represent the majority of sales in this market. The CRO market is highly fragmented and the number of CROs worldwide has reached over 1,200. A consolidation of the customer base through mergers/acquisitions should therefore not pose a problem for the majority of CROs.
The large global contract research providers such as Quintiles (market leader), Covance, Pharma Product Development, Charles River Labs and ICON hold 50% of the total market, will expand their capabilities in emerging markets for cost reduction purposes.6
The
unmet medical needs in oncology and central nervous system (CNS), cardiovascular and infectious diseases will continue to be major drivers for drug development. CROs focusing on full-service offerings in these therapeutic areas will continue to grow sales and profits. Niche players focusing only on a specific function or therapeutic area will also continue to grow. The competition is on. n
IHS Global Insight Report, World Markets Healthcare, 2005.
Reflection paper on ethical and GCP aspects of clinical trials of medicinal products for human use conducted in third countries and submitted in marketing authorisation applications to the EMA, Draft, EMA/712397/2009.
5. 6.
WMA Declaration of Helsinki, Ethical Principles for Medical Research Involving Human Subjects, 59th WMA General Assembly, Seoul, October 2008.
Future of Contract Research Outsourcing – Market Forecasts to 2015, Geographical Landscape and Competitive Benchmarking, GBI Research 2010.
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