Asia becomes the preferred destination for clinical trials of global CROs

CRO market significantly growing in the Asia-Pacific region, with 5-year CAGR approaching 20%

The international market of CRO industry has increasingly become mature, and the Asia-Pacific region has quite significant growth as an emerging market. According to the forecast of the consulting firm Frost & Sullivan, the global clinical trial market will reach about USD 57.0 billion in 2020, far higher than the USD 31.8 billion in 2015, with a CAGR (compound annual growth rate) of 12.4%. Even though the Asia-Pacific market (only consists of those countries in the western section of the Pacific Ocean) will still only take up less than 18% of that global market in 2020, its CAGR will approach 20% from 2015 to 2020.

Three factors restricting the development of CROs in the European and American markets

The CRO industry in the European and American markets has increasingly become mature, with the top 3 CROs in the world: Quintiles, Covance and PAREXEL all from the Europe and America, however, clinical CROs have entered a bottleneck period in the Europe and America mainly due to the following 3 reasons:

Firstly, patient recruitment and retention are key factors that result in the failure and delay of clinical trials in the Europe and America, and low participation rate is also an important reason affecting the clinical trial quality. For example, only 25% of elderly cancer patients were enrolled in a clinical trial, although they accounted for 63% of new cancer cases. Secondly, high trial cost also restricts CRO development. According to one investigation in 2014, the time and costs associated with conducting clinical trials in the Europe and America have grown significantly due to higher insurance fees and increased administrative and resource cost, etc. for the trials, and it would cost about USD 2.6 billion to launch a prescription drug to the market; finally, the complex administrative approval procedures dishearten the CROs. For instance, relevant provisions of the Health Insurance Portability and Accountability Act (HIPAA) and unclear regulatory pathways for certain diseases extend the duration of clinical trials. In the U.S., sponsors of multi-site clinical trials must not only follow federal regulations but also adhere to local policies. The same situation exists in the EU.

6 advantages of the Asia-Pacific region attracting CROs to enter

There are mainly 6 advantages of the Asia-Pacific region that attract CROs to conduct clinical trials, according to the report.

Firstly, the population base is large and it is easier to fast recruit treatment-naïve patients. There are about 4 billion people in Asia, including around 2 billion living in urban areas, contributing to more than half of the world’s urban population. Clinical trials are much sparsely carried out in those countries, in comparison. For example, the clinical trial density (the number of clinical bases divided by the country’s population in millions) in the two largest populated countries: China and India was only 2.0 and 0.5, respectively, while that of the U.S. and UK was 166.0 and 64.4, respectively;

Secondly, the data quality is accepted worldwide. According to survey, Asian countries have high-quality international compliance compared to North American countries;

Thirdly, clinical trials are more attractive to patients in Asia-Pacific region. Per capita medical expenditure in Asian countries is lower than the EU countries. As a result, clinical trials are more attractive to most patients in the region as innovative therapies;

Fourthly, the disease patterns are similar. Asian countries show similar disease patterns for major diseases to Western nations, providing a favorable environment to conduct clinical trials. And high incidence and prevalence of some diseases in Asia make the region extremely suitable for conducting clinical trials;

Fifthly, the infrastructure has high quality. Numerous specialized clinical trial bases boast international first-class equipment and technology, and the fast-growing economy of Asian countries also provides some material basis;

Sixthly, the cost is relatively low. Clinical trial costs in China and India are 25% to 40% lower than that of Western countries.

Opportunities and challenges faced by Chinese CROs

Where should Chinese clinical CROs go, with increasingly more international CROs conducting clinical trials in Asia-Pacific region? In my opinion, there are both opportunities and challenges for Chinese CROs. International top notch CROs will inevitably recruit local experts and technicians in the establishment of clinical trial bases in Asia, and Chinese CROs can learn from each other with the said international CROs and learn the advanced technology and management ideas to improve themselves; but this is also a crisis to Chinese CROs: survival of the fittest, some Chinese enterprises may choose to cooperate with foreign excellent CROs as the latter are more specialized, and Chinese CROs will face a great shock.

It is worth mentioning that CFDA has issued the China Food and Drug Administration on Adjusting Issues concerning the Administration of Imported Drug Registration (Draft for Comment) recently. It is an extension of the official policy for further encouraging pharmaceutical product innovation, which is generally considered to be in favor of CROs which are strong in innovative drug clinical trial business and conduct layout of international multi-center clinical trials.