“India need to improve the regulatory milieu to compete with other Asian countries”

Dr Subir Basak,
President, Jubilant Drug Discovery and Development Services
Dr Subir Basak, President, Jubilant Drug Discovery and Development Services in an interview with Pharma Bio World discusses emerging role of CROs in Indian pharmaceutical market

Please brief us about the characteristics of the CRO sector in general, and in non-traditional trial regions in particular?
Pharmaceutical companies are under pressure to reduce R&D costs and increase productivity in the form of launching novel drugs into the market to address unmet medical needs. CROs provide biotech/pharmaceutical companies access to global reach, different science and to new technologies with less investments, and enable them to shift large fixed costs to variable costs. About 50 per cent of the clinical research is outsourced to CROs and the global CRO market is expected to be around USD 24 billion in 2014.

The major CROs capitalise on the huge spending of global pharma companies in clinical outsourcing which is growing at an annual rate of 13.4 per cent by offering them faster, cost effective clinical trials and they have facilities in non-traditional locations like Latin America, India, China,Central and Eastern Europe and Russia.

The non-traditional regions are gaining popularity due to ease of recruitment, prevalence of wide range of diseases, human resource with skill sets and most importantly treatment naïve population.Recruiting from non-traditional regions are becoming important for crucial clinical trials used for MarketingAuthorisation Applications (MAA) submission in EU.

In non-traditional regions clinical trials are faster and cost effective and most of the major CROs have a presence in these regions. Most of the clinical trials in these are conducted by CROs. For eg, 70 per cent of trials in Peru and 30 per cent of trials in Argentina were conducted by CROs. In India and Brazil the regulatory process underwent some changes but still further reforms are required to ease and regularise the approvals.

What are the differences between CRO and Functional Service Provider (FSP)?
CRO’s provide end to end services from patient requirement, monitoring, data management and submission. Most of the CROs have global presence and can carry out trials in popular destinations. CROs are popular with pharma companies that do not have clinical development facilities.

FSP model involves providing specific services within the clinical research like Data-Management, medical writing, biostatistics, and clinical programming. As FSP models gain maturity other functions like clinical site management, clinical & medical monitoring, pharmaco vigilance can be integrated. These functions can be efficiently operated independently in a cost-effective manner especially at non-traditional regions with little oversight from sponsors. FSP are quite popular with the small CROs.

Please elaborate on offshoring in pharmaceuticals?
Offshoring means the clinical trials are conducted in non-traditional regions which are the emerging markets or the developing countries. These regions provide pharmaceutical companies faster clinical trials, ease of recruitment and importantly treatment naïve population. Since these regions are emerging markets and their potential in healthcare spending is rising, the pharma companies see them as lucrative markets and marketing approval of drugs in these regions would require local trials.

The other factors contributing to trials in these regions is the availability of skilled human resource, cost advantage, varying ethnic response to drugs, IT infrastructure and data management facilities.

What are the pros and cons of a company establishing its own captive unit rather than outsourcing to a third party?
Establishment of a captive unit for clinical development in India involves huge investment, excessive use of internal resources that might require the commitment from top management, recruiting local employees sharing the values and cultures of the parent company. With captive unit the operations, management will be more or less similar to the parent company.

As a CRO, how you see the relationship between sponsors and CROs?
Relationship between a CRO and Sponsor had been Transactional, tactical or fee-for-service arrangement. In recent times this price dominating relationship has evolved into a strategic partnership with risk-shared business models and core competency is the dominant factor of the relationship.

In general, the sponsor/CRO relationships are generally a blend of both tactical and strategic elements as per the requirements of the players. Tactical activities include execution of a contract, assessment of study-based cost and performance and decision making based on availability and cost. Strategic activities encompass shared decision making, performance assessment, shared risk and reward structures and decision based on long term objectives.

What factors to be considered while choosing an outsourcing partner?
Outsourcing of clinical services is not inclined to cost advantage alone but is increasingly tilting towards high quality services. This change makes it imperative to choose the deserving or right CRO. The following factors are essential to look for in selecting a partner;

  • Demonstrated expertise in conducting trials.
  • Experience in specific therapeutic area
  • Ability to recruit patients.
  • Access to investigators.
  • Financial stability.
  • Cost effectiveness.
  • Time advantage and ability to handle projects in varied regions.
What are the drivers of CR environment in India?
Globalisation of clinical research has been evident with the shift of clinical activities into Asia Pacific (APAC). India is evolving from being a manufacturing powerhouse in Pharma industry to a preferred destination for drug development and clinical research. Emerging markets like India are becoming the preferred off-shoring destination to conduct clinical research.

  1. Huge and Fast growing pharmaceutical market in India with pharma sales expected to touch USD 27 billion in 2016
  2. Conducive clinical environment with large treatment-naïve population available for recruitment. Good infrastructure with well-trained English speaking investigators adds value to the clinical environment.
  3. Cost: India provides cost advantage to the pharmaceutical companies scrambling to reduce cost and the time taken to market drug. Clinical research in India is 30-45 per cent cheaper that in developed markets like US and EU.
Currently what are the major challenges for CROs?
Rising healthcare cost has put pressure on pharmaceutical companies to reduce cost and time to develop and market drugs. The Biotech/Pharma companies had to minimise their risk and their off-shoring partners CROs came up with innovative risk-shared models to drive global innovation. CROs are finance oriented service companies and CROs taking high risk approach similar to the biotech/pharma with the returns of CRO is a major challenge faced by CRO’s today. Regulatory bottlenecks which causes delay in approval strains the very principle of CRO being time advantageous.

Kindly brief us about the legal aspects of R&D outsourcing in pharma industry
The major legal aspect governing outsourcing in Pharma Industry is the adherence to Intellectual Property Rights. Intellectual property rights should be respected and forms the major clause in R&D outsourcing. Data security and confidentiality are important aspects in which all the data generated and process associated with project are included.

Now, many pharma companies are seeking co-development deals to handle excess intellectual property. How does CROs play into this situation?
Thousands of molecules discovered lie in the racks of several pharma companies. These molecules that have the potential to enter the clinic travel from bench to bed through co-development deals.

Co-development deals exists as risk shared models where the CROs offer innovative business models to mitigate the risk of Biotech/Pharma companies, but in turn are rewarded when milestones are achieved and also share profit and losses with the biotech/pharma companies.

In recent years, what factors have driven pharmaceutical companies to increase outsourcing?
Spiralling healthcare costs, decrease in approval of new drugs has brought the pharmaceutical companies under pressure to reduce R&D costs and increase productivity. In order to reduce cost and to gain access to different knowledge, technology and high quality services the global pharma companies started looking for external partners.

The global pharmaceutical companies through strategic collaborative partnerships gain access to large diverse pool of patients especially in India and China, educated medical investigators, conducive clinical environment possessing treatment naïve population ideal for recruitment as trial subjects, huge cost advantage as it is 30-45 per cent cheaper than the developed countries and state of the art IT infrastructure and professionals to document the clinical findings for the regulatory bodies. The investments to already existing good medical infrastructure are happening and the government bodies are streamlining the bottlenecks in regulatory reforms which will reduce the time taken for approval. The drug discovery and development collaborative partners mitigate the risk and in turn also gain royalties on drugs that enter the market.

The strategic collaborative partnerships provides cost & time advantage and also provides access to fast growing emerging markets with low cost manufacturing capabilities. All these factors contribute to increased outsourcing by pharma companies.

What is the Competitiveness of Indian CROs against the CROs of other countries?
Indian CROs have done well in manufacturing, chemistry and also in biology services. India is still a favoured destination for CRO, but still we need to develop our infrastructure and the government should do a lot more to create a sustainable model that makes us highly competitive as a CRO destination.

India has become an attractive destination to global CROs due to the advantages of having a large number ofnaive untreated patients - (who are difficult to find in the developed world) and potential for economic trials. The success for Indian Pharma industry lies in the ability to retain cost advantage while maintaining quality standards and innovation in drug discovery and development. India has been making strides in the field of drug discovery and development and has witnessed a great deal of linkages across the world in the recent past.

In India regulatory approval, in spite of recent moves to streamline process, takes 9 months; regulatory approval delays of up to 12 months are not uncommon in China. In contrast, approval times in Singapore take around three months which is on par with the west. Looking at the huge potential India holds as a CRO destination, we still need to improve the quality standards of clinical trials and regulatory milieu, to compete with other Asian countries.

Implication of KPOs in pharma, biotech space in India?
There are 300,000 postgraduates and 1,500 PhD students qualify annually in biosciences and number of fresh scientists and engineers available every year is 700,000 according to a Confederation of Indian Industries (CII) studyand there is huge shortage for clinical investigators and researchers in India. Growing KPOs in Pharma/Biotech space will create more jobs for these aspiring graduates.

The global biotech/pharma companies other than cost advantage will gain access to huge emerging market in healthcare industry with healthcare spending increasing phenomenally.

What development would you like to see in pharmaceutical outsourcing?
In the regulatory perspective for pharmaceutical outsourcing, single window approval for clinical trials that will ease the approval process and stronger regulatory reforms that are innovation friendly and addresses the issues of recruited subjects is essential. CROs strengthening ties with academics to provide high end technology services. The relationship between CRO and global pharma should evolve from finance oriented relationship and the CROs should act as their off-shore destination which would pave way for the integration of the companies.

Please tell us about the performance of Jubilant during the past few years?
Jubilant has carried out 52 collaborative partnerships in various therapeutic areas like Oncology, Metabolic disorder, CNS, Pain & Inflammation identified two candidates, placed three compounds in clinical development, and have a compound in Ph II trials for our collaborator. Our global partners have leveraged Jubilant’s fully integrated discovery platform that includes Informatics, Insilico, Structural Biology, In vitro/In vivo biology, DMPK, Tox, in addition to medicinal and process chemistry.

Recently we have expanded our drug discovery collaboration with J&J and also signed new drug discovery partnership deals with Orion and GSK in multiple therapeutic areas.