CRO: Boom Time for India

Date:   Monday , May 31, 2004

India is quite ill, really. Not only do we have nearly every disease in the book, we also have them in alarmingly large numbers. If our life expectancy is 63, it’s an astonishing thing, considering the kind of blights that pervade India.

We have Alzheimer’s (1.5 million), asthma (40 million) bronchitis, cardiovascular diseases (30m), cancer (3m) diabetes (34m), epilepsy (8m), filaria, measles, meningitis, malaria, psychiatric disorders (10m), STDs, TB, tetanus and some yet-to-be-discovered symptoms in abundance. We even have horrible vector-borne diseases like kala-azar (curiously, also known as Dum Dum fever) which, in bad years like 1992, caused errant sandflies to bite as many as 75,523 unfortunates in Bihar, out of which 1417 died.

All this unhealth seem to have turned out to be a mixed curse: pharma companies from the United States and Europe are feverishly rushing to India to test out their drugs on the hordes of ill people.

Phase Value
As usual, there is the cost factor. Developing a new drug is a costly affair. A study by the Tufts Centre for the Study of Drug Development said that it cost as much as $802 million in 2001 to bring a new drug out, as compared to $231 million in 1987.

The interesting point is that while the total research costs increased at 7.4% per year, the cost of human clinical trials increased at nearly 12% every year, in real terms. This means that if companies can cut down on the cost of the clinical trials, then that’s quite a significant amount of money they can free for other projects.

And that is exactly why drug companies in the U.S. and Europe undergo roughly the same kind of emotions as a child does the morning after Santa drops by, on seeing India. The cost of conducting all four phases of the clinical trial is more than 50 percent lower in India. (Drugs are tested in four phases: the first is to test the safety and tolerability of a new drug, the second its efficacy on a small population, the next on a large population, and the last consists of post-marketing trials, including feedback from doctors.)

Rabo India Research, the analytical arm of Rabobank, estimates that for the first phase of the testing, it costs about $20 million. In India it can be done for $10-12 million. Phase 2 is even cheaper: what can be done for a mere $15-20 million in India takes a whopping $50 million in the U.S.

Small wonder that the Organization of Pharmaceutical Producers of India (OPPI) estimates that this market has burgeoned to a $70 million one today. Other estimates predict that it will grow to anything from $300 million by 2010, to $1 billion by 2008.

Less Patience, More Patients
Now this is one industry where time—or at least the money saved by saving time—is a greater driver than actual operating costs. And, as a McKinsey study found out, some 85 percent of days lost in clinical trials in the West were due to a failure to get enough patients.

No such problem arise in India. The time advantage is well over 30 percent for outsourcing companies. “If it takes one year to recruit patients in the U.S., in India it would happen in two months,” says Sudhir Pai, executive director of the Bangalore based clinical research organization (CRO), Lotus Labs.

It follows up that the time needed to get the drug into market decreases correspondingly, thus freeing up resources into developing new drugs. In addition, the pharma companies also get more time to iron out any problems with the drug and reintroduce it into the market.

Besides, there are costs galore to be saved. People have to be hired to do all the work, and you have to pay them. The investigators, nurses, computer operators all can be employed at costs far lesser than in the West. Then there is the patient recruitment—quite an expensive affair itself. While in the U.S. it would cost anywhere between $4,000 to $10,000 for every patient, it is less than half that amount in India.

‘Naive’ means ‘Smart’?
The patients offer a few other advantages. One is largely applicable to the less metropolitan parts, where the patient pool is largely non-migratory. Their lifestyles are similar, with few or no radical changes in their living. This makes it easier to test with unwanted “noise”.

The city and town residents have been increasingly adopting western modes of living and so their ailments also have taken a turn towards the West, not to mention those, like cancer, that are native to all the world.

And all these patients are all “treatment naive.” Dr. A.S. Arvind, who heads Clinigene, a CRO that is a subsidiary of Biocon explains: “This means that non-metro patients haven’t been bombarded with medicines all their lives. In the U.S., by the time you turn sixty, you would constantly be on at least five to six different medicines.”

India’s per capita spending on medicines is a mere three dollars. Compare this to the average Briton who spends $97 on health, or the Japanese who seems to spend a whopping $412. So the Indian’s bloodstream is relatively free of other chemicals that might interfere with test results.

The advantages do not end here—India’s medical infrastructure is, as Dr. Arvind puts it, “rather patchy,” but nevertheless quite extensive, besides having a good share of world class facilities. There are around 15,000 hospitals with well over 600,000 beds. Every year, the 162 medical colleges in the country disgorge some 17,000 graduates who enter the already sizeable pool of over 500,000 doctors. These are well trained in the western system of medicine and, of course, speak English.(India’s pharma market, it might be added, is the second largest in Asia.)

Writing Wrongs
Now if there is one thing that these life-saving personnel lack in India, it is the habit of writing things down. In the U.S., treating even a small ailment is a well-documented process, while Indians are “not good documenters traditionally,” says Arvind. “And abroad, what is not written, is not done.”

A rather more serious question is that of intellectual property rights. WTO entry, and the allied signing of TRIPS has meant that we must conform to the product patent regime by 2005. This involves a major and troublesome shift between systems. The judiciary is not really noted for dispensing speedy justice, and investors shouldn’t be blamed if they shift uneasily from foot to foot at the thought of settling cases of violations of intellectual property rights. Besides, it is doubtful if the Indian Patents Office is really capable of handling a boom in the number of patents applications.

However, on the positive side, the government has shown remarkable alacrity in making India a tempting proposition for big pharma. Customs duties on materials imported for clinical trials used to be a high 55 percent several years ago; these have now been brought down to zero. Ten year tax holidays are also being offered to companies making R&D investments.

Then there is the question of ethics, always a delicate one, but even more so with people making noises about making guinea pigs out of humans. But, like those who named the creatures guinea pigs (they are rodents not pigs; and they were domesticated in Peru as a part-pet, part-meal), these naysayers might be a little off the mark.

An instance that is often quoted is the case of the John Hopkins University’s rather unfortunate episode in Kerala. It performed clinical tests on (mostly illiterate) oral cancer patients in Kerala, without informing them. There was a huge uproar over the issue, and the testing was stopped.

Dr. Chetan Tamhankar, GM of SIRO Clinpharm, a CRO primarily into phases 2 and 3, calls the event “unfortunate,” something that could affect the credibility of India as a clinical trials destination. But he says such incidents are rare and the leading CROs are very careful with their ethical conduct.

An interesting point he notes is that every study needs to be approved by the Drugs Controller General of India under the Ministry of health. Besides, each participating investigator has to seek written permission from their institutional ethics committee, which is expected to review each protocol, from both ethical and scientific angles, before giving its okay.

Now what was clearly amiss with the John Hopkins study was the awareness and consent of the patient. At SIRO, Tamhankar says, they consider ‘patient informed consent’ as an “extremely important and crucial element of the ethics of the clinical trial.” In their multi-centric trials, the consent forms are translated in each regional language. What’s more, the translations are two way: the English to vernacular is done by one person, and the reverse to English by someone else. “These two versions are compared to ensure that the meaning is not lost in translation,” he explains. It is also made clear to the investigating staff that informed consent is a process that needs to be taken diligently, and “not merely a signature on a dotted line.”
On the face of it it seems reasonable to worry about drugs under test being administered on illiterate patients. Pai of Lotus Labs thinks not: “The test wasn’t dicey, and there was no mistake. The tests were all on terminally ill patients. There was no other medication to be offered, and left to themselves, the patients would have died anyway. The whole issue was politicized.”

To avoid all such issues detrimental to all concerned, leading CROs abide by the Good Clinical Practices (GCP) guidelines. These are framed by the rather wordily named International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH).
Regulatory authorities of the United States, Europe and Japan, as well as experts from the pharmaceutical industry, come under the ICH umbrella come to discuss scientific, technical and ethical issues. Its GCP guidelines were “recommended for adoption” in May 1996.

The GCP has several points to make: a trial should be initiated and continued only if the anticipated benefits justify the risks; the available nonclinical and clinical information on an investigational product should be adequate to support the proposed clinical trial; it should be described in a clear, detailed protocol, to mention a few.
Some firms, like SIRO, have taken it further. Several of the protocols they are working on have been submitted to the U.S. Food and Drug Administration, no small a standard to comply with. Now, the GCP stipulates that clinical trials should be conducted according to the Declaration of Helsinki (1964), which consists of “recommendations guiding physicians in biomedical research involving human subjects,” a sort of modern Hippocratic oath.

This Declaration states that “each potential subject must be adequately informed of the aims, methods, anticipated benefits and potential hazards of the study and the discomfort it may entail,” so John Hopkins weren’t quite in the right after all. However, a little later, one comes across “the physician must be free to use a new diagnostic and therapeutic measure, if in his judgement it offers hope of saving life, re-establishing health or alleviating suffering”.

After all, as Dr. Arvind points out, for all those medicines that we pop so faithfully on doctor’s orders, there was someone who took it the first time to see if it worked.