GLOBALIZATION: OUTSOURCING OPPORTUNITIES IN CLINICAL RESEARCH

Krathish Bopanna PhD, DSc

President & Executive DirectorSemler Research Centre

Bangalore, Indiakrathishbopanna@semlerresearch.com17th March, IPA Convention, Manipal

Presentation Overview

ü Globalization of clinical trials

ü Rapid pace of changes

ü Clinical Trial Infrastructure in India

ü Case studies

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ü Case studies

ü Enablers & Challenges in the current scenario

ü The way ahead

Globalization of Clinical Trials

Nature Review/Drug discovery 2008. 1 (2007. 4)

Emerging markets : Increasing clinical trial density

India – a significant market for Phase II/III trials

85105 53 9460 6285 6077% growth

19042071

1066972

1111 1206 1152

687600 628 512

35133245

22991991 1971 1924

1767

1273 1165 1163

818

85 57 116

Number of industry sponsored sites

► The number of industry-sponsored Phase II-III sites in India has grown by sizeable proportion based on the US trial register

► India has moved from rank 18 to 12 across the

Source: Uninterrupted globalization of industry sponsored clinical trials – Johan Karlberg – Clinical Trial Magnifier Vol. 2:2 Feb 2009

2005-07: Number of industry sponsored sites registered with US trial register between Oct 2005 and September 20072006:2008: Number of industry sponsored sites registered with US trial register between January 2006 and December 2008

600 512261424

Ru

ssia

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lan

d

Ind

ia

Bra

zil

Arg

enti

na

Cze

ch R

Hu

ng

ary

Ch

ina

Ro

man

ia

Ko

rea

Tai

wan

Ph

ilip

pin

es

2005-07 2006-08

60 most active countries.

► India stands next to Japan in Asia in its number of industry-sponsored Phase II-III clinical trial study sites and accounts for nearly 20% of sites in Asia.

ERapid pace of changesE

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Rapid pace of changes

Large patient pool

Every Year, an estimated 1.15 Bn ailments are reported

Every Year, an estimated 30 Mn cases of hospitalization are reported

India’s disease burden and patient mix corresponds to the therapy areas for which global trials are being conducted

Oncology 16%

Nervous system 14%

Musculoskel

Respiratory 7%

Other 24%

Total R&D expenditure in 2007 by therapeutic area

Chronic diseases are expected to grow at a faster rate as compared to acute ailments in alignment with R&D portfolio of large pharma companies

1 Mn0.8 Mn

64 Mn38 Mn

60 Mn41 Mn

COPD & Asthma

Cardio-vascular

14%Anti-

infectives 9%

Alimentary &

metabolism 11%

Musculoskeletal 5%

India has one of the fastest subject recruitment rates globally

► Comparison with global averages► Average recruitment rate : Nearly three to five times higher► Screen failure and drop out rates : Lower by nearly 40–50%

► Patient contribution for a global multi-centric study : 15–30%

2005 2015

64 Mn38 Mn

46 Mn31 Mn

Diabetes

Public & private medical infrastructure - large pool of potential clinical research sites

0.6

0.8

1

1.2

Currently India has over► 42,000 Private Hospitals► 9000 Government Hospitals► 9,42,000 Hospital Beds► 14,000 Diagnostic Labs ► 250 medical colleges

Over last six decades India has added significant physical infrastructure and human resources for healthcare…

Physical infrastructure and human resources – key ratio

0

0.2

0.4

1950-51 1960-61 1970-71 1980-81 1991-92 2004-05

Doctors ( per 1000 Epopulat ion)

General Nurses ( per 1000populat ion)

Medical Colleges ( per 50lakh populat ion)Beds per 1000 populat ion

Source: Fostering Quality Healthcare for All – EY FICCI HEAL 2008

► 250 medical colleges► 6,00,000 English speaking physicians

Rapid changing in trial geography

The healthcare infrastructure is largely concentrated in urban areas which is the key catchment area for subject recruitment

1

8

3.32.53

1 1 1

Ailments ratio Beds per Physicians per Nurses per

Urban Rural

Healthcare distribution across Rural and Urban

► Bangalore, Mumbai, Hyderabad, Chennai, New Delhi, Pune and Ahmedabad have the highest concentration of sites in India

Source: WHO World Health Survey 2003, Morbidity,Healthcare and Condition of the aged NSSO 60th Round, “Financing and Delivery of Health Care Services in India”, Background papers of the National Commission on Macroeconomics and Health”, 2005

Ailments ratio Beds per

'000 ratio

Physicians per

'000 ratio

Nurses per

'000 ratio

Companies are beginning to move into Tier 2 cities and towns to access a larger group of patients

► Trials are increasingly being carried out in towns such as Jaipur, Nagpur, Lucknow, Thiruvananthapuram, Coimbatore, Cochin, Vellore, Ludhiana, Madurai, Vishakhapatnam, Mangalore, etc…

concentration of sites in India

Overall costs competitive compared to developed markets

0.73

0.4

0.52

0.56

Australia

Russia

China

India

Overall Indexed Clinical Trial Costs

Significant cost advantage in manpower cost, rental cost, IT cost and operational cost, over most developed nations like the US and most of the European countries

Overall Indexed Clinical trial costsHourly rate comparison in India & other developed economies

USD / Hr India US

CRA 40-55 120-150

Project Manager

50-60 160-180

Source: FastTrack Systems Global Cost Databases, 2006

0.77

1.09

0.71

1.2

0.93

1

0 0.2 0.4 0.6 0.8 1 1.2 1.4

Poland

UK

France

Germany

Spain

US Source: Industry analysis

Charge-out rate (USD/hr)

India Developed economies

Data Entry operator 10-20 30-50

Bio-Statistician 30-70 100-150

Pharmacovigilance professional

50-100 140-250

Note: The charge-out rate may also vary based on the qualification and experience of the employee hired for the job

However, investigator grants, site and ethics committee fees, etc have been gradually increasing over the past few years (especially for experienced sites)

Significant evolution of the regulatory processes in the last few years

Government of India envisions the country’s transformation into a Pharma innovation hub by 2020

► Multi-billion dollar initiative with 50% public funding through a public private partnership model► Focus on building infrastructure for talent and research and offering financial incentives to encourage

and incubate innovation

Steps to improve quality of governance and oversight for clinical trials► Registration and regular audit of CROs in India► Registration of trials with the Drugs Controller-General of India (DCGI) mandatory from June 2009► Potential 10-year imprisonment for violation of ethics or norms in clinical trials

60

30

6040

90

120

90

4060 60

30 20

2000-06 2006-07 2008 2009

MNC trials Domestic company trials Query resolution

Clinical proposals review timelines (days)

Clinical proposal review timelines by Indian regulators are on the decline and expected to further reduce…

Source: Clinical Trials – New Horizon India, DCGI Presentation, March 2009

► Potential 10-year imprisonment for violation of ethics or norms in clinical trials

Drug Company Molecules / Brands researched

Alcon Vegamox

AstraZeneca Meropenem

Cangene Hepatitis B Vaccine

Eli Lilly Alimta, Gemcitabine

Glaxo Lamotrigine

US FDA – NDA (Data generated from India)

Reference : CDSCO , Mckisney 2008

Glaxo Lamotrigine

Jannsen Resperidal

Novartis Tegaserod

Pfizer Voriconazole

Roche PEG-Interferon

Santen Quixin

Wyeth Influenza A Vaccine

Exponential increase in Pharma & CROs promoting clinical research

Eli Lilly & Pfizer (1995) SmithKline Beecham (1998)SmithKline Beecham (1998)

Novartis (2003)Novartis (2003)

Aventis (2002)Astra Zeneca (2002)Bayer (2002)

Aventis (2002)Astra Zeneca (2002)Bayer (2002)

Merck (2005)GSK (2005)BMS (2006)

Merck (2005)GSK (2005)BMS (2006)

Small Biotech companies &Mid Size Pharma(2006)Biogen (2007)Amgen (2007)

Small Biotech companies &Mid Size Pharma(2006)Biogen (2007)Amgen (2007)

Pharma/ Biotech

Biotech companies (2005-7)

Biotech companies (2005-7)

Pharmanet (2005)PPD (2005)

GVK (late Phase) (2005)Kendle (2005)Parexel (2005)CliniRx (2006)

Pharmanet (2005)PPD (2005)GVK (late Phase) (2005)

Kendle (2005)Parexel (2005)CliniRx (2006)

Early MoversEarly Movers

1993

CROs DiagnoSearch (1996)Siro Clinpharm (1996)Quintiles (1997)

DiagnoSearch (1996)Siro Clinpharm (1996)Quintiles (1997)

Wait and Watch PlayersWait and Watch Players Serious PlayersNew Entrants

2009

ICON (2000)Asian Clinical Trials(2001)Neeman (2001)Omnicare (2001)ClinTech (2002)PharmOlam (2003)Reliance (2004)Veeda (2004)

ICON (2000)Asian Clinical Trials(2001)Neeman (2001)Omnicare (2001)ClinTech (2002)PharmOlam (2003)Reliance (2004)Veeda (2004)

2005

Industry sources

► Over 50 CROs present in different regions in India ► Primary locations: Bangalore, Hyderabad, Mumbai, Delhi, Ahmedabad)

Semler Research centre (2006)

EThe Clinical Research

E

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The Clinical Research Infrastructure

Clinical Research: Service Infrastructure

Medical

Writing

► Pfizer► Eli Lilly► Novartis► GSK► AZ

► Max Neeman► Excel

Lifesciences► SMO-India…

Sponsors SMOs*► Covance Labs► Icon Labs► Metropolis► SRL► Quest

Laboratories

Clinical Operations

Central Lab

► World Courier► DHL► TNT► Blue Dart

Couriers

Clinical research

Key com

ponents

Clinical Data Sciences

*Site Management Organization

Pharmacovigilance

Writing

► Quintiles► Icon► Parexel► Clintec► PPD

► Siro Clinpharm► Diagnosearch► Semler R C► Veeda CR► Clinigene

Global CROs Indian CROs

Central Lab Analysis

► Cognizant► Accenture► TCS► Wipro

► Sciformix► Symogen► Indegene► Sristek

IT / ITESNiche service providers

► Oracle► PhaseForward► Argus► Forte

IT Vendors

Full service providers

Clinical research

Key com

ponents

Other niche services such as cardiac safety testing, imaging, patient recruitment, etc not depicted above

Sciences

E&Y, 2009

Efficiency: % Active/Total Sites

USARecR

Case Study of a Major Multinational Phase III study

RUITMENt

Speed of Enrolment

# of Patients Enrolled Per Month Per Site

USARecR

Case Study of a Major Multinational Phase III study

RUITMENt

Planning Accuracy

N. America W. EU5 CEE

% recruitment (Planned vs Actual)

USAR

Case Study of a Major Multinational Phase study

RecRUITMENt

Subject Retention

Site Randomization Loss

Case Study of a Major Multinational Phase study

EEnablers & Challenges of the

E

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Enablers & Challenges of the clinical trial ecosystem

Rapidly evolving clinical trial eco-system

CROs & sponsors GCP-compliant sites

► Big Pharma - e.g. Pfizer, GSK, Eli Lilly, Novartis, Sanofi Aventis, Bayer, J&J, etc

► Global CROs with direct and indirect presence

► Indian CROs steadily globalizing reach and scale

► Over 2299 industry-sponsored Phase II-III clinical trial study sites (registered with the US trial register)

► Over 1500 trained

Human resource expertise

Ethics committees (ECs)

Site management organizations (SMOs)

Central labs Clinical trial eco-system

► Twenty CAP-certified central laboratories including international players providing esoteric services

► Entry of international SMOs

► Increasing sponsor interest

► Over 1500 trained investigators (based on 1572s filed with USFDA)

► Trials conducted as per the ‘Ethical Guidelines for Biomedical Research on Human Participants’ issued by ICMR* in 2006

► Regulators increasing focus on training & oversight of ECs*Indian Council of Medical Research

Key Enablers

q Patient pool

q Institutional infrastructure & Investigator resourcesq Regulatory/ECq Other support services (IT, Travel connectivity, Logistics, Courier)q Public awarenessq Formal – Clinical Research educationq Formal – Clinical Research educationq Support from Govt. bodies (funding & active participation)

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Challenges

ü Regulatory: Review Timelines

ü Institutions : Institutions participating in clinical research – smaller in percentage.

Overcrowding of experienced sites

ü EC : Limited governance mechanism on work processes and compliance of ECs

ü Medical documentation : Variation in standards of source documentation practicesü Medical documentation : Variation in standards of source documentation practices

ü Lab accreditations : Local labs associated with hospitals non accredited –

necessitating involvement of central labs

ü Training – Variations in degree of training (especially at sites)

ü Manpower: Availability & retention of manpower

ü Cost escalation : pricing pressure

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E

Creation of a world class clinical research environment – The way E

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research environment – The way ahead

Creating world class clinical research

• Drug development costs & timelines – key challenges (patient enrollment – rate limiting)

• Accelerated regulatory processes – single window clearance• Institutions – develop centers of excellence• Integrated management models – combining creative study approaches, training

methodology & technology to address issues related to study planning, site productivity

• End to end approach• Capacity expansion – infrastructure , human resources• Evolution of metrics to define and understand improvement parameters at

organizational & site levels• High compliance (inspections and oversight)

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