Costs and finances in clinical trials

India: Hub for clinical research

• Large number of patients
• Faster recruitment
• Highly qualified professionals
• Global quality medical care
• Low trial costs
• Highly developed IT and data collection
• More and more global sponsors are moving to India for clinical trials
• Exponential growth in no. of CTs and the industry

India and clinical research..

Until recently, there were few clinical trials conducted in India by Western pharmaceutical and biotech companies, primarily because of regulatory hurdles. In January 2005 it was recognized that the significant advantages that India offers to multinational companies and the potential and benefits of conducting clinical trials in India, should be utilized. The Government of India upgraded Schedule Y of the Drugs and Cosmetics Act of India, the equivalent of the sections of the Code of Federal regulations applicable to the FDA, to harmonize it with U.S. and International Conference on Harmonization (ICH) standards.

These changes removed a number of regulatory barriers to performing clinical trials in India

• The changes formalized the definition and conduct of clinical trials

• Specified the responsibilities of the sponsor, the investigators, and the Ethics Committees

• Developed guidelines and procedures for importing drugs for clinical trials

• Instituted required compliance with GCP

• Specified the requirements for informed consent

• Defined the structure, content and formats of clinical study reports

• In addition, the Indian Government provided increased protection for intellectual property (IP).

India….Clinical Trial costs                                                                                                                                                             The cost per patient for trials in India is approximately 40 to 60% of the cost in Western nations. More importantly, patient recruitment can be greatly accelerated, and this provides a major advantage in terms of shortening the time to market for a new drug. Based on these many advantages, the number of clinical trials in India is expected to grow exponentially over the next five to ten years. The average cost of running a US-based clinical trial per patient is $5,404 for Phase I, $6,538 for Phase II and $7,635 for Phase III.According to an analysis in 2006, conducting a clinical trial in a lower-cost destination such as India, for example, can cost up to 60 per cent less than in the US. However, while quickly gaining momentum, India’s much hyped clinical research industry is still yet to really take off. Since the introduction of patent protection laws in 2005, the industry has been growing three digits. However, this growth has not been as fast as many have predicted.

While deciding the costs for a clinical trial several factors are taken into consideration by the sponsor

In house costing plus out sourcing costs.
In house costing, all infrastructural expenditure has to be accounted for.
For outsourcing costs: CROs have come to play a crucial role in clinical research. The government plays a crucial role in regulating clinical trial costs. A report by analysts estimated that clinical research in India will be a $1bn (€800,000m) industry by 2010.Although many analysts expect it will be closer to half that

The government initiative.
Indian govt. recently announced a tax exemption on all services carried out by its contract research and clinical trials industry – a saving of 12.24 percent. The decision removes a previous stumbling block that international pharmaceutical sponsors faced when considering contract research organisations (CROs) in India. This is designed to give a boost to this budding market. Cost-savings are a significant draw card for many pharmaceutical companies when deciding to outsource clinical research to countries in emerging markets such as India and Latin America. In the last 10 years, skyrocketing costs of R&D have led to a growth explosion in the clinical services industry as pharma companies scramble to cut costs

Tax exemption…in Clinical Research
It is hoped that this move by the Indian government will give the industry the kick that it needs to live up to expectations. To make India a preferred destination for drug testing.
This includes technical testing and analysis for testing of new drugs, vaccines and herbal remedies, on human participants by a CRO approved to conduct clinical trials by the Drugs Controller General of India. This will attract more clinical trial outsourcing as the pharmaceutical sponsors will heavily benefit on their cash outflows on account of their expenses on CRO fees

CROs and clinical research
CROs are rapidly emerging as important contributors in clinical research Currently; CROs are having to ask sponsors for reimbursement of this service tax and paying it to the government. This relaxation by the govt. has sent positive signals for the growth of the clinical trial industry

The pharma industry…
A biopharmaceutical company discovers, develops, and commercializes therapeutic medicines for the treatment of serious medical conditions. It has therapeutic candidates in clinical trials for the potential treatment of diseases. It has the ability to understand thoroughly the biology of specific disease states, discover potential therapeutic candidates and evaluate product candidates in clinical trials.

How the industry manages costs ?
Financing, budgeting and cost control are essential aspects of clinical trial management
Specifically trained professionals, like CAs, MBAs, etc. are employed by the industry to handle this problem. Responsibilities include estimating, budgeting, forecasting, monitoring, planning, and allocating resource for clinical operations.

The need….
Ability to analyze clinical financial data and prepare management reports and forecasts, including earned value management reports. Effective documentation and communication for interacting with and making an impact on functional teams .Accurate and timely financial budgets, forecasts, actual and variance analyses under tight deadlines. The ability to manage multiple competing priorities

So, Clinical trials are not only a scientific exercise but also involve administrative and financial aspects. Need for focused expertise, innovative processes, and integrated technology. High quality, efficient and cost effective service solutions are needed to address many of the critical financial and administrative issues that affect the clinical trial proces

This entry was posted on 8. February 2010 at 10:03 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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