Outsourcing Clinical Trials to India - Opportunities and Challenges

Raman Sehgal

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.
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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