Clinical Development and Trials in India
New drug research and development hinges on successful, cost-effective and competent clinical development. It is estimated that clinical trials for a drug can cost up to US $350 million. The dual challenge of accelerating clinical development and reducing costs is driving global pharmaceutical companies to outsource clinical trials. India is emerging as a key country in this respect because of the presence of a large patient population, English-speaking medical practitioners, many of whom have been trained in the West, a significant pharmaceutical industry which has dominated world markets with its cheap generics and lower cost of clinical development. ICFDC presents an analysis of this emerging new sector.

Overview: The Pharmaceuticals Industry in India

The pharmaceuticals industry in India is estimated at Rs 20 billion comprising nearly 25,000 units. Of these, 300 players control close to 70% of the total domestic market. India is one of top five manufacturers of bulk drugs in the world and is among the top 20 pharmaceutical exporters in the world. The Indian market is dominated by formulations that constitute close to 80% of the market. Bulk drugs make up the rest. India is largely self-sufficient in formulations, with imports being restricted to drugs for cancer, etc. Bulk drugs are exported with the rest being used by manufacturers of domestic formulations. The anti-infective segment is the largest component of drugs being manufactured for domestic consumption, followed by respiratory and cardio-vascular drugs. With increasing price competition, companies such as Sun Pharma, Nicholas Piramal and Wockhardt are focusing on "niche" segments such as lifestyle-related illnesses. These include treatments for ailments such as diabetes, cardiac disease and anti-depressants.

Company	Financial Year	Net Sales (Rs Million)	Profit After Tax (Rs Million)
Ranbaxy Laboratories	December 1999	15590	1930
Glaxo L:td	December 1999	8880	770
Wockhardt	December 1999	8420	1050
Novartis	March 2000	7930	1030
Cipla	March 2000	7040	1330
Aurobindo Pharma	March 2000	6920	740
Lupin Laboratories	March 2000	4850	310
Hoechst Marrion Roussel	March 2000	4800	270
Cadila Healthcare	March 2000	4480	380
Dr Reddy's Laboratories	March 2000	4360	600

Source: Organisation of Pharmaceutical Producers of India

The domestic pharma industry got a boost, courtesy the Patent Act of 1970 which sought to recognise process patents rather than product patents. As a result, domestic players focused on reverse engineering complex molecules at lower costs. The companies would develop a process that was different from the patented one and manufacture the product with the same characteristics and therapeutic properties as the original molecule. A number of me-too products flooded the market and intense price competition was the key fallout. However, the pharma environment is all set for a major change when India, embraces the product patent regime in 2005 as a signatory of the WTO agreement. The new regime would mean that Indian manufacturers would no longer be able to duplicate products on which patents are held by using different processes.

The other regulatory body that oversees drug prices in India is the National Pharmaceutical Pricing Authority (NPPA). It is vested with the authority to implement provisions of the Drug Prices Control Order (DPCO). The NPPA also periodically revises the prices of both bulk drugs and formulations depending on the business environment. The role of the NPPA is to ensure that life-saving drugs at available to customers at a reasonable price and to prevent profiteering by companies that are in a position of monopoly. If the NPPA reduces the number of drugs under price control (from the current 74 to about 35), companies whose products are taken off the list will stand to gain as they can then price their products at market-determined rates. This would result in better returns for the companies and also provide them with the financial resources that they would need to deploy into research and development (R&D).

Given that Indian companies are now on the threshold of a new regulatory regime, the major challenge that they face today is in the area of R&D. Drug development requires huge financial resources which Indian companies clearly lack. Moreover, their R&D expertise has not been honed due to the process patenting system. As a result, Indian companies would have to rely on a strategy of "out licensing" molecules, beyond a certain stage of development, to a third party. The money would be made through milestone payments, as each subsequent stage in the development process is successfully crossed. This approach has been adopted by Dr Reddy's when it out-licensed an anti-diabetic molecule to Danish major Novo Nordisk. The fact that the clinical trials were suspended when problems surfaced only highlights the unpredictable and costly nature of new drug development.

New Thrust on R&D

The global pharma industry spends nearly US $70 billion on R&D activities, with the US leading with an estimated spending of $24 billion. About 40% of US pharma companies outsource some of their R&D work and about 27% of drug development funding is spent on outsourcing from Contract Research Organisations (CROs). It is estimated that in 1999, US pharma companies spent $7 billion on outsourcing research.

Investment in pharmaceutical R&D in India has been rising steadily. From Rs.3 billion in 1999-2000, R&D expenditure is projected to grow five times to Rs.15 billion by 2005. The good news is that R&D costs in India are much lower than in the developed world. According to experts, it is possible to conduct both New Drug Discovery Research and Novel Drug Delivery System programmes at competitive rates. While the Investigational New Drug stage may cost $100 to 150 million overseas, the same can be done for just Rs 400 to 600 million in India, says the R.A.Mashelkar Committee report. The report adds that while clinical trials cost approximately $300 to 350 million abroad, they cost about Rs.100 crore in India. Apart from a comparative cost advantage, the presence of a well-established network of research laboratories and a skilled pool of scientific personnel also gives India an advantage. (The R A Mashelkar committee set up by the government has proposed a series of recommendations to give a boost to R&D activities in the country. The report deals with a wide range of issues, such as fiscal incentives and an appropriate R&D regulatory framework).

Moreover, Indian companies have the potential in developing new chemical entities (NCEs) from natural sources. "The abundance of biologically and medicinally useful plants offers CROs the opportunity to utilise state-of-the-art technologies such as high throughput screening and synthesis for gnerating products with therapeutic usage," says a CII-Rabo India report titled Business of Biotechnology. The report points out: "Indian CROs are targeting a wide variety of services such as compound discovery and development, process development and synthesis, gene therapy and specialised services such as DNA library construction, differential gene expression analysis, isolation of genomes involved in genetic metabolic disorders, strain improvement and custom made technology development for specific needs."

Not surprisingly, the clinical trials business is fast emerging as a key area of expertise for the Indian pharmaceutical industry. According to CenterWatch, the estimated size of the Indian clinical trials market in 2002 (industry spending on CRO services and investigator grants) was US $30 to $35 million. The estimated number of ICH-GCP clinical studies was 40-50 and the number of GCP trained investigators was 200-250. Assuming 100 patients per study or 20 patients per investigator, this translates into 4000-5000 patients. At present, most studies are carried out in 20-25 major public hospitals in the large metropolitan cities. CenterWatch has predicted that by 2010, the industry will spend around US$ 250 - $300 million on clinical trials in India. McKinsey's estimates are in the region of US$ 1-1.5 billion. The Indian clinical trials market is expected to grow at a compounded annual growth rate (2002-2010) of 30-50 per cent.

Rising awareness about Good Clinical Practices (GCP) too has begun to set in: the Government of India issues GCP guidelines for all pharma-related clinical research in December 2001. These guidelines were formulated by an expert committee set up by the Central Drugs Standard Control Organization in consultation with experts. The Drugs and Cosmetic Rules Act has been amended and all clinical trials for new drugs have to seek approval from the DCGI. Further, post marketing surveillance studies (phase IV study) have been made mandatory in case of clinical trials for import and manufacture of new drugs. This is further expected to increase the demand for high quality clinical research services. The introduction of Ethical Guidelines for Biomedical Research in Human Beings and Indian GCP guidelines provided a boost to the clinical trials market in India.. The revision of Schedule Y too will enhance India's image as a clinical research destination.

At another level Independent Institutional Review Boards (IIRBs) are being set up to make clinical trials approvals as controversy-free as possible. The first of such boards, the 11-member Independent Ethics Committee (IEC), was set up in Mumbai in October 1999. Another 15-member IIRB, the Biomedical Ethics Committee (BEC) has been operational since February 2002 in Delhi. With Phase I clinical trials on foreign molecules being allowed in India, the review boards are expected to play a significant role in the approvals process.

The Pharmaceutical Export Promotion Council (Pharmexcil) has been set up as a joint initiative by the government and the industry to boost service capabilities including basic research, drug development and clinical research. In the area of clinical trials, Pharmexcil's mandate is to educate the companies conducting clinical trials, regulatory authorities and government. The council plans to ensure that regulations are strictly adhered to and that there si a transparent and accountable system in place to deal with any violations of regulations.

The government of India is also slated to announce its first official regulatory framework on the use of animals in clinical trials and other tests. The secretary (environment and forests) Pradipto Ghosh was quoted in media reports as having said that the guidelines would deal with the specifics of using animals for experiments. "Animals could be used for pharmaceutical research for significant gains in health care. But they can't be used for testing cosmetics." A feature of the new framework is that the Committee for the Purpose of Supervision and Control of Experimentation on Animals (CPSCEA) will now be procedurally accountable. Changes in the way the committee operates as well as in its membership profile are being mooted. The guidelines will also deal with pre- and post-trial care of animals and their import or export for trials. The guidelines are expected to be notified in October 2004.

Why India is a Potential Destination for Clinical Trials and Pharma Related Manufacturing

• · India provides a large pool of "treatment-naive patients" who hail from multi-ethnic backgrounds.
• · Patient recruitment is rapid thereby collapsing the time needed for the clinical development process.
• · India offers the opportunity to pharma companies to develop drugs for a wide spectrum of diseases, including multidrug-resistant pneumonia, hepatitis B, diabetes, and cancers.
• · The cost of conducting trials in India is cheaper by 30-50% as compared to that in the West.
• · Indian research/data generation capabilities are of international standards and Indian data is accepted by all major medical conferences and journals.
• · A large pool of talented investigators is available. Many of them have been trained in the US and/or Europe and are exposed to ICH guidelines for GCP.
• · All hospitals and private institutions store comprehensive source data in English.

But there are challenges ahead too. For the market to grow rapidly, a large number of quality professionals in medical and clinical research can be developed only through cooperative and collaborative efforts between industry, academia and government. Besides the industry will have to invest in training - it is estimated that the US industry spends nearly $300 million on training.

According to a survey by the Outsourcing Institue, the top five criteria for the selection of an outsourcing partner by global pharma companies are: price, commitment to quality, flexible contract terms, reputation and scope of resources. Among the range of manufacturing related activities that pharma companies outsource are: primary and secondary packaging, formulation, active ingredient manufacturing, labeling, clinical supplies, sterilisation, manufacturing of chemical intermediates, and stability packaging.

Trends and Developments

Partnerships between domestic pharma companies and global majors are being forged in order to focus on the area of co-developing new drugs that are currently in the research pipeline. Global pharma players have shown an interest in joint research with Indian companies as it helps them to cut the cost of drug development. One such domestic company that is exploring the option of tie ups with large global players is Nicholas Piramal India Ltd. In 2003, the company announced an investment plan of Rs 750 million for its R&D centre at Goregaon in Mumbai. The 200,000 square feet research centre is equipped to work on a wide array of research areas and will be among the largest pharmaceutical facilities in the country. The company plans to have at least 400 research scientists working in this facility. Nicholas Piramal is focusing its own R&D efforts on development of NCEs and new drug delivery systems (NDDS) in select therapeutic areas including cancer, diabetes and metabolic disorders, inflammation, oncology and anti-infectives.

Another domestic major, Ranbaxy Laboratories has entered into an alliance with GlaxoSmithKline for research on NCEs. GSK will provide leads on the prospective NCEs while Ranbaxy will be responsible for a range of activities from optimisation of a lead compound to generation of a development candidate. Once the candidate is selected, GSK will complete the development work.

The Mumbai-based CRO, SIRO Clinpharm, hopes to do business worth $6 million in 2004, and has tied up with Ecron, a Germany-based MNC CRO which has a presence in several countries. It is also working jointly in India with the US-based Covance. Another home-grown CRO, based in Mumbai, DiagnoSearch is collaborating with the US-based IT solutions company iGate. The latter has taken a majority control in the company.

Quintiles, a $1.5-billion clinical research outfit which started drug trials in India in the late-1990s, has moved its sole electrocardiogram (ECG) reading centre from London to Mumbai. As a result ECGs of patients taking experimental drugs all over the world are now read in India. The centre now employs 75 people (up from 30 in 2002), including doctors and cardiologists who work either full-time or part-time. The ECGs are digitally transmitted to India from Quintiles' various trial sites around the world and stored in a server in the Mumbai office. Doctors measure and analyse the ECGs and reports are transmitted back. All quality controls are in place.

Jubilant Organosys Ltd is setting up two wholly-owned subsidiaries, Jubilant Chemsys Ltd and Jubilant Clinisys Ltd to offer chemistry and clinical research services. New R&D centres have been set up to focus on drug discovery and development. It new laboratory in Noida, near Delhi, will work on medicinal chemistry projects. Jubilant Clinisys will conduct bio-availability, bio-equivalence, pharmacokinetic and phase I studies. The company is setting up a 40-bed facility at Noida which will be functional by end 2004.

Public-private partnerships too are a component of the new thrust on drug discovery. Recently the collaboration between Council for Scientific and Industrial Research and Lupin Laboratories was hailed by science and technology minister Kapil Sibal who commented: "India can emerge as a world leader in drug development as our pharmaceutical companies have the capability."

Increasingly, Indian pharma companies are focusing on new research in biotech products. Wockhardt which has set up a Rs 2 billion facility, designed according to US FDA standards, is currently working on half a dozen biotech products. "We are targeting a 100 fold jump in biotech exports to Rs 100 crore by 2006," Wockhardt chairman Habil Khorakiwala recently announced. Reliance Life Sciences has drawn up an ambitious plan to set up a Rs 10 billion medicinal and aromatic plant project at Jamnagar, Gujarat.
 

[22 October 2004]