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Abstracts: Recent reports suggests that the cost
of new drug development has gone up alarmingly by 23
times in last 3 decades, touching an all time high of
$1.25 billion per new chemical entity (NCE).
Simultaneously, the drug development time has gone up
from approximately 11.6 years in the 1970s to 14.9 years
in 2001, thus reducing the patent protected market life
and consequently depriving the innovator company off the
potential revenues. With the pharmaceutical R&D pipeline
thinning, the possibility of a long term recession; the
current economic slow down worldwide is changing the way
Pharma MNCs are approaching their business model. The
MNCs are looking for potential blockbusters which are
now becoming essential for their survival. The article
explores the opportunities for outsourcing clinical
trials to India which is the most cost and time
intensive phase of the R&D process.
Introduction
New drug discovery is a complex and costly process. It
involves screening of more than 12,000 compounds over a
period of 8-10 year period and costs about US $1 billion
before a new drug is successfully launched into the
market. The major cost in drug discovery is spent in the
Phase I, II & III of clinical trials. Also, clinical
studies take up between 30 to 50% of the time spent in R
& D. With patent protection being limited to 20 years
including the R & D stage, every year saved here can
bring in additional revenues of a billion dollars for
the innovator company. The expansion of western
pharmaceutical companies around the world and the
emergence of local rivals in developing countries have
meant that the number of trials taking place in the
emerging economies of China, India, eastern Europe and
Latin America is catching up.
In the pharmaceutical industry, Clinical Research
Organizations (CROs) speed up the drug discovery and
lower the product development costs with improved
clinical research processes. Pharmaceutical firms are
now looking towards CROs as vital resources that are
able to cost-effectively fill critical staff expertise
shortages, maximize patient recruitment within narrow
timelines and reduce the overall drug development time.
Thus, the number of CROs servicing global markets has
risen as the Pharma MNCs struggles to fill their drug
pipelines.
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