Opportunities and challenges for Indian CROs: End of a dream run…

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Opportunities and challenges for Indian CROs: End of a dream run…

Contract Research Organisations (CROs) provide support to pharma and biotech industries in the form of research services outsourced on a contract services. But today, CROs do not seem to be at its best time. A quick look at the present scenario of the Indian CROs.

According to various reports, India is fast emerging as a favoured destination for clinical trials by global pharma and biotech companies that are looking for partnerships or setting up new operations. Clinical trial industry in India touched $ 400 million in 2010, up from $ 230 million in 2008 and is expected to touch $ 1.09 billion by 2014. The cost of conducting clinical trials in developing countries like India and China is far lower when compared to their developed counterparts. There are several reasons for this. The reports show that easy access and availability of a large, diverse population with vast gene pool along with lower cost of technical services resulting into lower per patient trial cost are few of them. Additionally, India also has the advantage of having a talent pool of highly trained medical professionals (physicians, nurses and technical personnel); several world-class medical facilities along with well established IT infrastructure; a favourable IPR environment (post signing the World Trade Organization (WTO) agreement) and use of English as the primary business and medical language. The reports show that the Indian contract research market stood at $ 0.9 billion in 2009 and is expected to touch $ 3.4 billion in 2012, reflecting a Compounded Annual Growth Rate (CAGR) of over 55 per cent (2009–2012).
Sustaining afloat?

Today, in spite of ongoing research activities and several opportunities in place the current status of Indian CROs do not seem to be in sync. Elaborating on the present condition of the CROs in India, Nidhi Saxena, President & CEO, Karmic Lifesciences, avers, “The Indian CRO industry is currently going through turbulent times. While clinical trials from India still remains a huge potential opportunity, the business closures and materialisation of large scale deals have been slow. The industry is growing at a rate of 20-25 per cent and at a top line of approximately $ 1.0 billion still has less than 2 per cent of the global CRO industry.” She adds that it will take a few more years to get to an inflection point and start scaling. Also, the regulatory aspects need substantial reform and reconsideration by the policy makers to allow India to reach its true potential as a clinical research destination of choice. According to Saxena the market has two distinct segments, namely, Phase II-III clinical trials and the bio-analytical/bioequivalence market. For the former segment a few prominent Indian CRO names are Siro Clinpharm, Karmic Lifesciences, DiagnoSearch and Max Neeman, whereas for the latter companies like Veeda, Lambda, Ecron Accunova and GVK are well known. Further, global CROs including Quintiles, PPD and Paraxel also have large bases in India.

Nidhi Saxena

Researchers are of the opinion that the CROs in India are not in a stable condition. Dr R B Smarta, Founder & MD, Interlink Marketing Consultancy, explains, “When CROs came to India the entire situation was buoyant, even Government of India had taken up clinical trials as one of the important initiatives. This is primarily because India clearly wanted to grow in this field. However, gradually, the focus shifted to China and that is where the major thrust went off.” However, why did it happen? Answering the question, Dr Smarta raises few other questions. He asks, “Do we attract clinical trials work from originators as they may have qualifying parameters?,” “Do we have the systems and the infrastructure that we need to have to perform clinical trials?,” “Do we have the backing of such policies that keeps the interest of all stakeholders?.” He says, “If these questions were answered then I do think we would have got rightful position for CROs in the world. We have good clinicians, physicians, surgeons, pharmacists, intelligent resources, good number of patients, relatively low cost of operations! Thus, everything in context is available. We need to look at this point in totality.”
The brownie points!
India does not lack either talent or opportunity. According to Dr Smarta, “Here is a country that offers excellent patient pool for all conditions, well educated research team, scientific pool along with governing regulatory!” He reiterates that what is needed is a strategy to take up this initiative with focus at public and private level in collaboration is the opportunity area. But what remains is the ambiguity, whether it is all positive for the CROs or is there a long way to go? Discussing the primary challenges in this regard, Saxena elaborates that the key challenges revolve around regulatory issues, data quality issues and funding/ scale up issues. On one hand, regulatory delays, ambiguity and unpredictability followed by concerns over subject compensation issues have shaken up global as well as local sponsor confidence, and on the other hand, concerns over data quality and integrity are still not fully addressed. She highlights, “The investment community also has concerns about the industry scalability given that the boom that was predicted for the CRO industry never really concretised.” Seconding Saxena’s thoughts, Dr Smarta adds, “We must remember that CROs are agencies working on outsourced work, so if the client base and funding is not adequate it is very difficult to operate. We must remember the risk those funding agencies are carrying.”

Future ready

Dr Smarta

To operate in such a challenging landscape, Indian CROs need to get creative in terms of business models and scale-up strategies. Commenting on the situation of Indian CROs, Saxena remarks, “For one, while India can serve as the operational backbone for data management, biostatistics and pharmacovigilance opportunities, Indian players need to globalise and look at US, Eastern Europe, Latin America and Far East as key locations for clinical trial execution so as to de-risk from India specific challenges.” There are several areas that might be advantageous for the CROs to function. Also, there is a huge potential for co-development and licensing opportunities with mid to small biotech companies especially into biologics and biosimilars apart from medical devices development. Dr Smarta says that if challenges are overcome, then we can surely have a different kind of scenario. While the industry still has huge potential, there are several short term impediments and Indian CROs will find it an uphill task to cross this chasm and get to real scale up.

Chandreyee Bhaumik

chandreyee.bhaumik@network18publishing.com