The pros and cons of outsourcing laboratory testing

Offshoring clinical trials can save money and time, but  practical difficulties and ethical problems may arise

Peter Mitchell/LONDON

Since 2000, Latin America and Eastern Europe have become favorite destinations for the clinical research of multinational pharma companies, while India and China have also joined in the action in the past two years.

So what are the reasons for this? “Conducting a clinical trial involves three key factors: time, cost and quality,” says consultant David Glover, former medical director of biotech firm Cambridge Antibody Technology, based in Cambridge, UK. “If you can get the same quality of data and materials at lower cost and/or quicker, why not go offshore?” While there are issues of management and coordination to factor in, “real-time electronic data transmission has totally changed the economics of that side,” he says.

Ken Kaitin, director of the Tufts University’s Center for the Study of Drug Development, in Massachusetts, US, regards “offshoring” as one of the hottest topics in drug development. It is now considered best practice by some of the industry’s best-performing firms, especially for so-called proof-of-concept trials – the “significant efficacy” tests typically done at the end of Phase 2 to determine whether there is a large enough therapeutic effect to continue forward into the large-scale Phase 3 safety trials.

“Many pharma and biotech companies are either conducting, or at least considering conducting, some or all of the discovery and research activities in these lower-cost countries,” says Kaitin. “The rapidly increasing time, cost, risk and complexity of drug development is driving nearly all large pharma companies and a growing number of small and medium-sized companies to look overseas to conduct clinical studies. The attractions are more rapid subject enrollment [a significant bottleneck in the West], reduced cost and, potentially, faster time to market.”

A WIN-WIN SITUATION

Kaitin cites figures showing that a clinical trial costing $10m (€6.6m) to conduct in the US or UK would cost $7.7m in Poland, less than $6m in India or China, and only $4m in Russia. “With the lower cost per subject, more indications can be studied in a single trial. Moreover, the ability to enroll subjects rapidly can speed up commercialization of the drug under test in the local market,” he says.

Kaitin’s analysis is backed by the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA), in Geneva, Switzerland, which says the trend is driven almost exclusively by the lower costs in these countries. IFPMA director of communications Guy Willis admits that the infrastructure in these countries, such as investigator skills and information technology, is often inferior. But he says this has led to a technology transfer effect under which the sponsoring companies help out the investigators with training and equipment, thus laying the foundation for future trials. “This is a first step to allowing developing countries to build up high-value-added economies,” he says.

Kaitin agrees with Willis that emerging economies have identified the interest of Western companies as a significant opportunity to bring in Western capital. “Countries such as China and India, as well as in Eastern Europe, and Latin and South America, have made a substantial investment in improving the local infrastructure to allow Western companies to achieve a seamless global drug development program,” he says.

The result has been a notable improvement in the research and development capabilities of these emerging economies, which further ratchets up their attraction to Western firms. Data from Tufts suggests that, although emerging economies have far fewer qualified investigators, their numbers are growing far faster: 15-25%/year for Eastern Europe, India and China as against 6-8% for Japan, Western Europe and North America.

“The clinical development capabilities of emerging economies are growing quickly,” says Kaitin. “They have much broader availability of trained and skilled staff than used to be the case, standards for pharma manufacturing have improved.” As a result, the number of service providers such as contract research organizations (CROs) is rising as they increasingly collaborate with multinational companies, leading to a “rapidly expanding” domestic market, he says.

Moreover, big pharma has established research centres in some of these countries, such as the UK’s AstraZeneca, which has established a tuberculosis research institute in Bangalore, India, and Swiss-based Novartis’ Institute for Tropical Diseases in Singapore, which is working on dengue fever, malaria and tuberculosis.

A more directly commercial example is the US-based contract research organization (CRO) Pharmaceutical Product Development (PPD). The company regards China as a high-growth clinical research market and already conducts clinical trials there. In January, it formed a partnership with China’s Peking Union-Lawke Biomedical Development (PUL), under which the latter would test samples from clinical trials locally. In return, PPD donated equipment to the Peking Union Medical College, where PUL will conduct the assays. PUL will also be able to use the equipment to conduct central lab testing for Chinese clients running clinical trials in China.

There are also signs that preclinical (animal) testing is increasingly being offshored to China. In January, US-based CRO Bridge Laboratories announced that it had raised $18m in order to expand the company’s toxicology lab in Beijing. Bridge believes it can “revolutionize preclinical development by delivering high-quality services in China at significant savings.” Its CEO, Tom Oakley, says the company is on target to more than triple its Chinese preclinical capability in 2008, and expects even greater growth when its second facility opens in 2009.

ETHICAL DILEMMAS

The practice has not been without controversy, although IFPMA insists there can be no cutting of corners in terms of trial protocols, as these have to be designed to meet the regulatory standards of the country in which the trial results are to be filed for approval – usually the US, Japan or Europe. “Companies try to ensure that patients in any country involved in a trial benefit from the same protection as patients in Europe or the US, and are treated with equivalent treatment paradigms,” says Willis.

According to Willis, most of the criticism of offshoring arises from a single case – the Trovan trial in Nigeria in 1996, said to be the inspiration for the book and film “The Constant Gardener.” In the midst of a bacterial meningitis epidemic that was overwhelming the government’s health services, US-based pharmaceutical major Pfizer offered to supply its experimental antibiotic trovafloxacin (Trovan). About 200 children participated in the trial, with half receiving Trovan and half receiving the standard treatment, Ceftriaxone. The results are still debated. There was some evidence that Trovan performed slightly better than the standard available treatment. A number of children who took Trovan died or suffered various disabilities, as did children who took Ceftriaxone, although the survival rate for both groups was better even than treated patients in the general population. However, 30 affected families sued Pfizer, alleging that they had not given informed consent. The Nigerian government has also sued the firm, so far without success.

Willis stresses that the Trovan trial was an exceptional event: “Certain activists have tried to make a lot of noise and imply that what happened was representative of developing country trials, but it wasn’t, it was very much an emergency situation.”

Offshore trials also raise issues related to the influence of genetics and ethnicity, Glover points out. Different individuals may respond differently to some medications, depending on their ethnic background. For this reason, regulators such as the US Food and Drug Administration (FDA) sometimes require an additional or bridging study beyond a submitted study conducted among the single ethnic group typical of many Asian countries.

However, the unique nature of regions can also drive offshoring. Drug sponsors may want to ensure that their trials cover different types of population, or to address diseases that are rare in developed countries.

“Large patient populations facilitate trials on disease subsets and individualized medicine,” explains Kaitin.

Moreover, it is easier to find “naive” populations in developing countries – that is, people whose diseases have not been treated by some other drug. This is important because trials can sometimes be confounded by other treatments.

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