Emerging Market for Clinical Trials in China - Communication Problems and Unresolved Intellectual Property Issues Restrict Growth by GBIResearch

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									             Emerging Market for Clinical Trials in China -
          Communication Problems and Unresolved Intellectual
                  Property Issues Restrict Growth
 Reference Code: GBIHC090MR                                                                                                              Publication Date: April 2011


                                      GBI Research has found that the presence of good infrastructural facilities and support from the
                                      regulatory and government authorities has increased the registration of clinical trials in China.
                                      Therefore, China is considered to be an emerging market for conducting clinical trials. In
                                      comparison across all the BRIC (Brazil, Russia, India and China) countries, China recorded the
                                      highest number of clinical trials in 2010. This increase in registration of clinical trials has made
                                      China the destination for many pharmaceutical companies to conduct clinical trials.
     In 2004, there were 36
                                      Rising Cost of Drug Development and Decrease in R&D Output has Resulted in Outsourcing
     NME/BLA approvals with
                                      of Clinical Trials to China.
     R&D spending of $47.6
     billion whereas in 2009            Clinical Trials in China, Global BLA and NME Approvals vs. R&D Spending, ($bn),
     there were 25 NME/BLA              1995-2009
     approvals with R&D
     spending of $65.3 billion                                         60                                                                                         70



                                                                                                                                                                  60
                                                                       50




                                                                                                                                                                       Research &Development Spending ($bn)
                                                                                                                                                                  50
                                         Number of NME/BLA Approvals




                                                                       40


                                                                                                                                                                  40

                                                                       30

                                                                                                                                                                  30


                                                                       20
                                                                                                                                                                  20


                                                                       10
                                                                                                                                                                  10



                                                                       0                                                                                          0
                                                                            1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

                                                                                              NME Approvals   BLA Approvals     R&D Spending

                                        Source: GBI Research, FDA, PhRMA.org



                                      GBI Research suggests that pharmaceutical R&D expenditure, over the years, has been increasing
                                      relative to the number of drug approvals. The decreasing number of New Molecule Entity (NME)
                                      approvals against ever increasing R&D expenditure has made it difficult for pharmaceutical
                                      companies to extract better ROI (Return on Investment) from their drugs as the cost of developing
                                      a single drug has increased exponentially.




Emerging Market for Clinical Trials in China - Communication                                                                          GBIHC090MR /Published APR 2011
Problems and Unresolved Intellectual Property Issues Restrict
Growth                                                                                                                                                            Page 1
                                                                                                   © GBI Research. This is a licensed product and is not to be photocopied
                                      China is an Attractive Market for Contract Research Organizations due to Infrastructural
                                      Benefits and Cost Compliance
                                      The US and Europe dominate the contract research organization market and account for the
                                      majority of clinical research activities. However, this trend is changing with the emergence of
                                      regions such as Central and Eastern Europe, Latin America, India and China as preferred locations
                                      for outsourcing. China provides access to a large patient population, good infrastructural facilities
                                      and a pool of healthcare professionals. China is also more cost effective with comparable quality
                                      standards to the developed regions such as the US and Europe. In addition, China has aligned its
                                      clinical research regulations with international standards and requirements, which allows it to
                                      conduct clinical trials and research on behalf of pharmaceutical companies in developed countries.
                                      Therefore, pharmaceutical and biotechnology companies will have good reasons to increasingly
                                      outsource clinical trials to China in order to benefit from the cost, time and expertise benefits and
                                      also to leverage emerging countries compliance with international standards such as the Good
                                      Laboratory Practices (GLP) and Good Clinical Practices (GCP).
                                      The Key Players in the Global Market Look to Strengthen Competitive Positions through
                                      M&A and Strategic Collaborations within the Industry
                                      M&A activities, service agreements and strategic collaborations have increased over the last two
                                      years. The increase in these deals suggests a highly competitive and active market. The majority of
                                      the deals conducted by contract research organizations have focused on establishing strategic
                                      alliances with other contract research organizations, technology providers and pharmaceutical and
                                      biotech companies. The players have entered into these strategic alliances and collaborations with
                                      other companies in order to enhance their competitive positioning. The increased number of M&As
                                      suggests a further consolidation which will increase the competition in the industry, and they are
                                      aimed at enhancing service portfolios and expanding geographic presence. Intense competition will
                                      force medium-sized players to expand services or geographic presence. Niche players focusing
                                      only on a specific function or therapeutic area will also continue to grow. Therefore, the larger
                                      diversified players or niche contract research organizations will be competitively placed in the
                                      future.
                                      Communication and Intellectual property Issues Restrict Growth
                                      China was a closed economy up until the last decade and had very few connections with the
                                      outside world. English has become a global language and many countries are now officially
                                      transacting in English. However, people in China are not conversant in English and this has been a
                                      major restraint for conducting business there. It has been observed that the local governmental
                                      authorities do not understand the questions raised by the representatives of the multinational
                                      companies. This has been a serious issue and the Chinese government is trying to overcome it by
                                      making English classes mandatory for all the officials.
                                      The Chinese patent law has been amended third time and the Chinese government in order to
                                      attract more investment is trying for patent protection and enforcement closer to international
                                      standards. But some issues are not fully addressed such as patenting issues between Chinese
                                      utility model and patents of design, issues between business and plant patents, Patent misuse
                                      prohibition still needs to be strengthened




Emerging Market for Clinical Trials in China - Communication                                                GBIHC090MR /Published APR 2011
Problems and Unresolved Intellectual Property Issues Restrict
Growth                                                                                                                                  Page 2
                                                                         © GBI Research. This is a licensed product and is not to be photocopied
                                      1      Table of Contents
                                      1   Table of Contents ........................................................................................................................ 3
                                          1.1    List of Tables..................................................................................................................... 6
                                          1.2    List of Figures ................................................................................................................... 7
                                      2   Emerging Market for Clinical Trials - China – Introduction........................................................... 9
                                          2.1    GBI Research Report Guidance ..................................................................................... 10
                                      3   Emerging Market for Clinical Trials - China – Overview ............................................................ 11
                                          3.1    The Clinical Research Process – Overview .................................................................... 11
                                             3.1.1     Drug Discovery ........................................................................................................ 11
                                             3.1.2     Pre-Clinical .............................................................................................................. 12
                                             3.1.3     Phase I .................................................................................................................... 12
                                             3.1.4     Phase II ................................................................................................................... 12
                                             3.1.5     Phase III .................................................................................................................. 12
                                             3.1.6     Review and Approval from the Regulatory Agencies............................................... 12
                                             3.1.7     Post-marketing Studies ........................................................................................... 12
                                          3.2    Clinical Trial Design and Types....................................................................................... 13
                                             3.2.1     Types of Design....................................................................................................... 13
                                          3.3    Role of CROs .................................................................................................................. 19
                                          3.4    Sponsors of Clinical Trials............................................................................................... 20
                                          3.5    Intellectual Property Protection in China ......................................................................... 21
                                             3.5.1     Article 15 ................................................................................................................. 21
                                             3.5.2     Aritcle 20 ................................................................................................................. 22
                                             3.5.3     Articles 22 and 23 .................................................................................................... 22
                                             3.5.4     Article 62 ................................................................................................................. 22
                                             3.5.5     Articles 48 and 50 .................................................................................................... 22
                                             3.5.6     Article 69(5) ............................................................................................................. 22
                                             3.5.7     Article 5 and 26........................................................................................................ 22
                                          3.6    The Need for Outsourcing Clinical Trials ........................................................................ 23
                                             3.6.1     High Risks and Costs Associated With Drug Development ..................................... 23
                                             3.6.2     Escalating Costs of Clinical Trials............................................................................ 24
                                             3.6.3     Global Increase in the Number of Clinical Trials Conducted ................................... 25
                                             3.6.4     Restructuring the R&D............................................................................................. 25
                                             3.6.5     Increased Screening Rates during R&D .................................................................. 26
                                             3.6.6     Expiring Patents Pressurize Pharmaceutical Companies to Reduce Costs ............ 27
                                      4   Emerging Market for Clinical Trials – China - Clinical Trial Trends ............................................ 28
                                          4.1    Registration of Phase l Clinical Trials.............................................................................. 28
                                          4.2    Registration of Phase ll Clinical Trials ............................................................................. 29
                                          4.3    Registration of Phase lll Clinical Trials ............................................................................ 30
                                          4.4    Registration of Phase lV Clinical Trials ........................................................................... 31
                                          4.5    Clinical Trials Registered in 2010.................................................................................... 32
                                          4.6    Comparative Analysis of Registered Clinical Trials in Brazil, Russia, India and China
                                                 (BRIC) Countries............................................................................................................. 33
                                          4.7    Comparative Analysis of Population Statistics in BRIC Countries................................... 34
                                          4.8    Population Forecast of China .......................................................................................... 35
                                          4.9    Analysis of Epidemiology and Prevalence of Major Diseases in China........................... 36
                                             4.9.1     Number of Recruiting Sites for Major Therapeutics in China ................................... 36
                                      5   Emerging Market for Clinical Trials – China - Market Environment Characterization ................ 44
                                          5.1    Increase in Growth of Global CRO Market will Foster the Growth of Chinese Clinical Trial
                                                 Market ............................................................................................................................. 44
                                             5.1.1     Increase in Multinational Sites to Conduct Clinical Trials will Drive the Clinical Trial
                                                       Market in China ....................................................................................................... 45
                                             5.1.2     Access to a Large Patient Population ...................................................................... 47
                                             5.1.3     Comparison of Population of Different Countries..................................................... 48
                                             5.1.4     Patient Availability for Major Diseases..................................................................... 49
                                             5.1.5     Subject Recruitment and Speed of Trials ................................................................ 56


Emerging Market for Clinical Trials in China - Communication                                                                           GBIHC090MR /Published APR 2011
Problems and Unresolved Intellectual Property Issues Restrict
Growth                                                                                                                                                                        Page 3
                                                                                        © GBI Research. This is a licensed product and is not to be photocopied
                                           5.1.6    Cost Comparison China Vs the US ......................................................................... 56
                                           5.1.7    Annual Median Salaries of Doctors in China ........................................................... 57
                                           5.1.8    Annual Median Salaries of Doctors in Different Provinces of China ........................ 58
                                           5.1.9    Infrastructural Facilities Improve the Clinical Trial Environment .............................. 59
                                           5.1.10 Increase in Number of Graduates in Colleges and Universities of China ................ 61
                                        5.2    Market Restraints ............................................................................................................ 64
                                           5.2.1    Slow Regulatory Approvals ..................................................................................... 64
                                           5.2.2    Insufficient Communication Platform ....................................................................... 64
                                           5.2.3    Intellectual Property Issues are not Fully Resolved ................................................. 64
                                           5.2.4    In depth Training in Good Clinical Practices (GCP) for Health Care Professionals . 64
                                        5.3    Clinical Trial Market Size in China .................................................................................. 65
                                      6 Emerging Market for Clinical Trials – China - Regulatory Landscape........................................ 66
                                        6.1    Introduction ..................................................................................................................... 66
                                           6.1.1    Drug Administration Law ......................................................................................... 66
                                           6.1.2    Implementing Regulation of Drug Administrative Law ............................................. 67
                                           6.1.3    Good Clinical Practices (GCP) of Pharmaceutical Products (1999) ........................ 67
                                           6.1.4    Work Rules for Clinical Research of Drugs (2000) .................................................. 68
                                           6.1.5    Structure and Procedure for Monitoring Adverse Drug Reactions in China ............. 69
                                        6.2    The Ministry of Health ..................................................................................................... 70
                                        6.3    State Food and Drug Administration (SFDA) .................................................................. 70
                                        6.4    Clinical Trials Registry China (ChiCTR) .......................................................................... 71
                                        6.5    Clinical Trial Regulation in China .................................................................................... 72
                                           6.5.1    Approval Process for Clinical Trials in China ........................................................... 72
                                           6.5.2    Number of Days Required For Getting the Approval for Clinical Trials (Individual
                                                    Procedures) ............................................................................................................. 73
                                           6.5.3    Approval Process for Clinical Trials in China for Imported Drugs ............................ 74
                                           6.5.4    Number of Days Required For Getting the Approval for Clinical Trials for Imported
                                                    Drugs (Individual Procedures) ................................................................................. 75
                                           6.5.5    Documents Required With the Investigator of Clinical Trials ................................... 75
                                           6.5.6    Documents Required With the Sponsor of Clinical Trials ........................................ 77
                                        6.6    Recent Regulatory Changes in Clinical Trials ................................................................. 79
                                           6.6.1    Longer lead-times on specified exports ................................................................... 79
                                           6.6.2    Need for Chinese-based applicant. ......................................................................... 79
                                        6.7    Government Incentives ................................................................................................... 79
                                        6.8    Activity of International Pharmaceutical Companies in China ......................................... 80
                                      7 Emerging Market for Clinical Trials – China - CRO Landscape ................................................. 81
                                        7.1    Classification of CROs in China ...................................................................................... 81
                                        7.2    Number of CROs in China Based on Types of Services Rendered ................................ 82
                                        7.3    Acquisitions of Chinese CROs ........................................................................................ 83
                                        7.4    Recent Alliances of Chinese CROs ................................................................................ 83
                                        7.5    CRO Profiles ................................................................................................................... 84
                                           7.5.1    BO JI Medicine Services Co. Ltd ............................................................................. 84
                                           7.5.2    Giant Med-Pharma Services Inc .............................................................................. 85
                                           7.5.3    InCROM .................................................................................................................. 86
                                           7.5.4    Pharmaron ............................................................................................................... 87
                                           7.5.5    Venturepharm Service Group (VPS) ....................................................................... 88
                                           7.5.6    PPD ......................................................................................................................... 89
                                           7.5.7    CCBR-SYNARC ...................................................................................................... 90
                                           7.5.8    Quintiles .................................................................................................................. 91
                                           7.5.9    Kendle ..................................................................................................................... 92
                                      8 Emerging Market for Clinical Trials – China - Appendix ............................................................ 93
                                        8.1    Market Definitions ........................................................................................................... 93
                                        8.2    Abbreviations .................................................................................................................. 93
                                        8.3    Research Methodology ................................................................................................... 94
                                           8.3.1    Coverage ................................................................................................................. 94


Emerging Market for Clinical Trials in China - Communication                                                                         GBIHC090MR /Published APR 2011
Problems and Unresolved Intellectual Property Issues Restrict
Growth                                                                                                                                                                    Page 4
                                                                                       © GBI Research. This is a licensed product and is not to be photocopied
                                             8.3.2    Secondary Research ............................................................................................... 95
                                             8.3.3    Primary Research .................................................................................................... 95
                                             8.3.4    Expert Panel Validation ........................................................................................... 95
                                          8.4    Contact Us ...................................................................................................................... 96
                                          8.5    Disclaimer ....................................................................................................................... 96
                                          8.6    Sources ........................................................................................................................... 96




Emerging Market for Clinical Trials in China - Communication                                                                           GBIHC090MR /Published APR 2011
Problems and Unresolved Intellectual Property Issues Restrict
Growth                                                                                                                                                                       Page 5
                                                                                        © GBI Research. This is a licensed product and is not to be photocopied
                                      1.1       List of Tables
                                      Table 1: Clinical Trials in China, Global BLA and NME Approvals vs. R&D Spending, ($bn), 1995-
                                                 2009 ............................................................................................................................... 23
                                      Table 2: Clinical Trials in China, Drug Patent Expiry, Global, ($m), 2009-2016 .............................. 27
                                      Table 3: Clinical Trials in China, Number of Phase l Clinical Trials Registered, 2005-2010 ............ 28
                                      Table 4: Clinical Trials in China, Number of Phase ll Clinical Trials Registered, 2005-2010 ........... 29
                                      Table 5: Clinical Trials in China, Number of Phase lll Clinical Trials Registered, 2005-2010 .......... 30
                                      Table 6: Clinical Trials in China, Number of Phase lV Clinical Trials Registered, 2005-2010 ......... 31
                                      Table 7: Clinical Trials in China, Number of Clinical Trials Registered, BRIC, 2010 ....................... 33
                                      Table 8: Clinical Trials in China, Distribution of World Population among BRIC Countries, (%), 2010
                                                 ....................................................................................................................................... 34
                                      Table 9: Clinical Trials in China, Population Forecast, (Millions), 1950 – 2050 ............................... 35
                                      Table 10: Clinical Trials in China, Number of Recruiting Sites for Major Therapeutic Areas, 2005-
                                                 2009 ............................................................................................................................... 36
                                      Table 11: Clinical Trials in China, Number of Sites Recruited by MNCs, (%), 2005-2009 ............... 37
                                      Table 12: Clinical Trials in China, Number of Clinical Trials by MNCs, 2010 ................................. 38
                                      Table 13: Clinical Trials in China, Number of Clinical Trials by MNCs, Hong Kong, 2010............... 39
                                      Table 14: Clinical Trials in China, Number of SFDA Study Sites by Therapeutics, 2008 ................ 41
                                      Table 15: Clinical Trials in China, Number of Institutions Accredited by SFDA for Therapeutic
                                                 Areas, 2008 .................................................................................................................... 43
                                      Table 16: Clinical Trials in China, Global, CRO Market, 2006-2015 ................................................ 44
                                      Table 17: Clinical Trials in China, Number of Local and Multinational Sites, 2005-2009................. 46
                                      Table 18: Clinical Trials in China, Number of Patients, 2010 .......................................................... 47
                                      Table 19: Clinical Trials in China, Global, Population of Different Countries, (Million), 2009 - 2011
                                                 ....................................................................................................................................... 48
                                      Table 20: Clinical Trials in China, Incidence Number of Common Diseases, 2009 ......................... 49
                                      Table 21: Clinical Trials in China, Number of Deaths by Diseases, (%), 2009 ................................ 50
                           
								
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