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Outsourcing in Clinical Research - The Indian Perspective

Kapil Parab
Research Analyst-Healthcare Practice
Frost & Sullivan, India

Introduction

New pharmaceutical strategies pursue increased Research and Development (R&D) investments ranging 15-20% in contrast to late 80’s period where classical model across was 10%. The annual budget allocation spent with clinical research organizations (CRO) is approximately $12 billion in an attempt to increase throughput, which has predominantly benefited CRO’s who have seen their turnover boost growth of 20-30% year on year. The $9.57bn world market for contract clinical research services growing at 13.4% comprising of pre-clinical and Phase I, II, and III clinical services provided by CRO to pharmaceutical and biotechnology drug developers. U.S. still holds majority stake in the slice with more than half of 1000 companies engaged in the business having their base in US. This is primarily due to the status of U.S. as the world’s largest drug market and the favorable conditions it offers for contract research services. Recent trends have seen clinical research segment gaining weight outside US boundaries, getting established in Europe and Asia. India and China share the major chunk of benefits from a rise in clinical research activities in Asia. The revenues still remain relatively low in comparison to overall CRO sales because of the extremely low currency valuations in these regions.

Reasons for outsourcing in Clinical Research in India

Indian Clinical Research focus is shifting from cost advantages to quality and rapid response. India, with second largest population in the world, and with every sixth patient in the world being an Indian, is going through an upheaval economically, socially and scientifically. Increased awareness of Good Clinical Practices (GCP) requirements, stronger desire of international acceptability of research done in India has brought favorable changes in the attitude of clinicians in India towards participation in clinical trials. Investigators are eager to take part in GCP clinical trials and are also willing to adhere to constraints of the protocol. Current outsourced clinical trial activity in India is at around Rs. 3.5 billion (about US $ 75 million) and is estimated to go up to Rs13.2 billion (about US $ 281 million) by 2010. According to statistics compiled by the Indian Council of Medical Research (ICMR), the total turnover from clinical trials in India in ’03 was Rs 2.25 billion. Just 800 people are full time employees, while an additional 1,500 people work as site staff. The total number of patients undergoing clinical trials is 10,000. The clinical trials legislative requirements are guided by specifications of schedule Y of Drugs and Cosmetics Act in India. Recently the Ministry of Health, along with DCGI and ICMR has come out with draft guidelines for research in human subjects. These are essentially based on Declaration of Helsinki, WHO guidelines and ICH requirements for GCP. The Department of Science and Technology has taken initiative for establishing quality requirements by setting up National Board for Accreditation of Testing and Calibration Laboratories for clinical and diagnostic laboratories (NABL).

The following figure outlines the advantages offered for conducting clinical trails in India.

Source: Frost & Sullivan

Revenues of Clinical Research Organizations, India (2003-04), Source: Frost & Sullivan.

(*Note: SiroClinpharm has not confirmed it revenues. In 2003-04, its service revenues were Rs 312.0 million and in 2003-04 it might have crossed over Rs 500 million. Its number of projects has doubled in 2003-04.)