Testing bed

Recent efforts by China’s State Food & Drug Administration (SFDA) to tighten requirements for drug testing have also meant added time and costs for companies drawn to China as a low-cost base for clinical trials.

“We [pharmaceutical companies] all feel that in the future to get any drug approved will be more difficult, and standards will be increasingly higher,” says Chris Peng Mao, CEO of Jiangsu-based China Biopharmaceuticals Holdings.

Once the company completed the required clinical trials for its Desloratadine hay fever tablets, the SFDA took another five months before it approved the results for manufacturing and marketing approval. The time lag may be annoying but China Biopharmaceuticals is not going anywhere else.

Low-cost trials

Like a growing number of pharma firms, China Biopharmaceuticals has overcome lingering worries about red tape and intellectual property rights and outsourced all of its clinical testing to China. It usually engages between five and 10 SFDA-certified hospitals to conduct trials on new drugs it is developing for diabetes, cancer and cardiovascular diseases.

The principle motivating factor is cost. According to data compiled by pharmaceuticals industry consultancy Excel PharmaStudies, the cost of recruiting patients in China is one-third of the going rate in the US. Hospitalization costs are just US$40-100 per day in China compared to America’s US$750-1,000 per day.

Since clinical trials represent around two-thirds of the costs of drug development, any reduction in these costs helps bring drugs to market more quickly.

Approximately 86% of clinical studies fail to enroll sufficient patients in the US, forcing average delays of up to a year in drug development with estimated costs of US$2.8 million a day in potential sales, according to Boston-based clinical research listing service Center Watch. As a result, more than half of US clinical trials are now outsourced.

But the US Food and Drug Administration does place a few restrictions on data it accepts from clinical trials in China, requiring the demographic to be roughly equivalent to the ethnic group of the American population. However, it is more accepting of data from hepatitis trials since the disease is more prevalent in Asia than in North America.

“It’s very product specific,” Mark Engel, CEO of Excel PharmaStudies, said.

Of the big pharma contingent, Pfizer, GlaxoSmithKline, Sanofi-Aventis, Novartis, Roche and AstraZeneca all run clinical trials in China.

There are gains to be found on all sides. In addition to exploiting the lower costs, international drug companies value China’s vast pool of test subjects and a relatively large medical science sector, which boasts 2.5 million doctors and other staff. According to World Health Organization statistics, China ranks first for clinical trials outsourcing, followed by India and Russia.

A lucrative market

The big companies also see the trials as a useful marketing tool: By testing in China, they may save time and money in securing approval for future imports. As Engel notes, this is particularly important given that China is set to become the world’s largest drug market by 2020.

From a local perspective, clinical trials are a lucrative business for the 250 local medical institutions licensed by the SFDA. For the patients, it is more about treatment than money, according to Dr Qiao Youlin, chief of the Department of Cancer Epidemiology at the Beijing-based Chinese Academy of Medical Sciences. He currently oversees a five-year program funded by the Bill & Melinda Gates Foundation to test cancer screening methods on 12,000 Chinese patients ranging from 18 to 60 years old.

“Patients get free screening. If they have cancer, we give them free treatment,” he said.

Given the threadbare nature of health care coverage in China, it’s not surprising to find many keen participants. “When it’s cancer treatment you need and you have no access to medicine or medical care, then it’s very obvious you would enroll,” Engel said.

Market needs

The fact that many Chinese people have neither the money nor the insurance coverage to seek treatment actually makes them more attractive subjects for tests. Approximately 60% of the population is “treatment naïve” – they haven’t been exposed to other drugs so their physical response to tests will be a relatively pure and untainted.

In addition, the rising prevalence of conditions such as cancer and heart disease makes China the perfect testing ground for multinational drug makers. Dr Qiao says a worrying 67 in every 100,000 Chinese suffer from lung cancer, with heart disease and bronchitis among the other leading causes of death in the country.

However, starting clinical trials in China is more challenging than in Western markets. As China Biopharmaceuticals might attest, this could be put down to an intensely bureaucratic process which may mean applicants wait a long time to get an SFDA license for Phase II trials.

“Restrictions on the export of blood and tissue samples have recently eased… but the Chinese government is very concerned with safety,” Engel said.

The bulk of clinical trials testing in China is Phase III – human clinical trials carried out before new drugs enter the market. But the SFDA requires the assessment of a new drug’s safety in Phase I and II tests before human trials can begin in China. In most cases, foreign pharmaceutical companies can only start tests with Chinese patients after Phase I and II tests on humans and animals are completed in foreign markets.

China has an incentive to promote clinical trials and encourage foreign investments as it improves its R&D and drug development among its own domestic market, largely dominated by generic drugs. And for foreign drug makers with designs on the China market, there is an incentive to establish their footprint sooner rather than later.