As the pharmaceutical industry’s expansion into emerging markets meets the desire of Asian governments to speed approval of innovative products, demand for clinical trials is soaring in the Asian region. By 2021, the global market for clinical trials is expected to reach $60 billion, a 75% increase from 2015. The majority of the new demand is driven by a single region—Asia. With 60% of the world’s population and incidence rates of major diseases equalling or surpassing those in the United States and Europe, the Asian continent is ripe for pharmaceutical innovation.
The results are clear. The number of new clinical trials in East Asia rose 127% between 2006 and 2012. Clinical trials conducted in Japan in the same period increased by 39%. In China, expected to become the world’s second largest pharmaceutical market after the United States by 2020, the growth is also significant. The percentage of global clinical trials conducted in China rose from 2.1% in 2008 to 4.9% in 2013 to 9% in 2017.
Asian Markets Offer a Clear Path for Drug Clinical Trials
Western pharmaceutical companies face growing hindrances to conducting clinical trials at home, such as a lack of patient pools, growing costs, and lengthy regulation timelines. But most Asian governments are doing everything they can to prime the market for such drug clinical trials. They are strengthening intellectual property protection, allocating new resources to data collection and scientific infrastructure, and affording new access to patient populations. The environment for research and development is also steadily improving. The region hosts a growing pool of scientific and development expertise, advancing technology, and quality clinical outsourcing providers.
Clinical trials generally cost less in Asia than in the West. With cheaper resources and staffing, companies can save 25% to 40% on costs in China and India compared to in the United States and Europe. Japan is the only Asian country where clinical trial costs are comparable to those in the West.
Across the region, participation in clinical trials is a way for patients to access innovative therapies otherwise beyond their financial reach. And while the large, diverse Asian populations have increasingly similar disease patterns as those in Western countries, they are less likely to have received any earlier treatments for their illnesses, creating a rich enrollment for clinical trials. For example, according to a report by Frost and Sullivan, in 2016, 5.4% of the U.S. population were enrolled in clinical trials, as opposed to 0.2% in China and Japan.
While Western firms encounter a wide range of rules and data requirements from country to country, almost all governments in Asian countries have taken initiatives in recent years to develop favorable regulatory environments for clinical trials. Asian countries are increasingly following standard international procedures for clinical trials adopted from The International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). In some Asian markets, fast-track approval processes are available for rare or life-threatening disorders.
Also driving the trend is the growing tendency of pharmaceutical companies to outsource the conduct of clinical trials to contract research organizations (CROs), rather than doing them in-house. According to Frost and Sullivan, the CRO market in the Asia Pacific is expected to grow at a combined annual growth rate of 20% from 2016 to 2021, compared to 11.4% in North America.
Japan: High Quality Drug Trials, But Expensive
Japan has a good clinical trial infrastructure, medical workforce, and healthcare capabilities, as well as very high quality standards. Because of the “culture of compliance” in Japan, subjects are generally very compliant and eager to attend all study visits, which oftentimes leads to a quicker enrollment and higher retention rates.
Conducting clinical trials in Japan requires a thorough understanding of the Japanese regulatory framework and the regulations passed by the Ministry of Health, Labor and Welfare (MHLW) and Pharmaceutical and Medical Device Agency (PMDA). Japan has adopted ICH Good Clinical Practice (GCP) since 1998. In some aspects, Japanese Good Clinical Practices (J-GCP) are even more comprehensive than ICH GCP.
While the above points make Japan an attractive market for clinical studies, in many ways, the Japanese clinical trial environment has been less than welcoming due to a great deal of red tape and bureaucracy, which permeates much of Japanese society. According to the PMDA, historically, it takes 2.5 years longer for a drug to receive approval in Japan than it does in the United States. In addition, doing clinical trials in Japan is more costly than in China and India, being comparable to higher trial costs in the West.
China: Significantly Improving Clinical Trial Regulations
Commercial clinical trial sites in China numbered 5,628 in 2017, and foreign pharmaceutical companies are projected to increase their spending on research and development in the country to $29.3 billion by 2021.
The Chinese pharmaceutical market has taken steps to integrate with international standards. Last year, China joined ICH. Looking to speed up approval for innovative products, China is now accepting more foreign clinical data for product registration approval, including Phase I and Phase II clinical trials. Foreign drug companies are also now including more Chinese patients in Phase III global clinical studies. More foreign drug companies are conducting separate, independent Phase III studies for China approval as well.
The regulatory environment for pharmaceutical innovation in China is also improving. Looking to speed up approval for innovative products, China’s central drug regulatory authority has recruited more staff. The number of drug reviews completed by the regulatory body jumped from 5,300 in 2014 to 13,000 in 2017.
India: Huge Decline in Number of Clinical Trials
Since 2013, India has experienced a downward trend in its clinical trial environment due to concerns over quality and ethics in conducting local clinical trials. Past trials oftentimes treated Indian patients as guinea pigs. From 2006 to 2013, as many as 3,000 people died during clinical trials in India.
In March 2014, in response to serious concerns over trials causing serious adverse events (SAE) and deaths, the Indian Supreme Court directed the government to change the regulatory framework to ensure patient’s safety. Today, all clinical trials must be submitted online and reviewed by a Subject Expert Committee, a Technical Committee, and an Apex Committee. The number of clinical trials done in India now is still down about 80% from 5 years ago.
South Korea: Technical Innovation Drives Growth
With its generally affluent population and longstanding developed technological environment, South Korea is already ranked sixth in the world in the number of clinical trials conducted within its borders. Between 2007 and 2013, sponsor-initiated oncology trials in the country alone increased by 50%.
According to a report by the United Nations Educational, Scientific and Cultural Organization (UNESCO), South Korea ranks first in research and development spending as a percentage of gross domestic product (GDP), at 4.3%, compared to 3.6% and 2.7% in Japan and the United States.
Taiwan: More Government Resources Mean Shorter Review Wait Time
Like many of its neighbors, Taiwan is experiencing significant growth in the clinical trial industry. The number of Phase I clinical trials in the nation jumped from 12 in 2011 to 52 in 2017.
Over the past year, Taiwan’s Food and Drug Administration has taken a series of steps to cut the review process for new drugs. In October 2017, Taiwan shortened the average review time for approval of investigational new drugs, increasing the incentive for researchers to work on a wider range of pharmaceutical therapies. Shortly thereafter, it reduced its review timelines for first-in-human (FIH) clinical trial applications from 120 days to 30 days.
New Opportunities for Western Pharmaceutical Companies
As the demand and need grows for clinical trials in the Asian markets, new opportunities exist for Western pharmaceutical companies. Many Asian governments are dismantling onerous bureaucracies and regulations that led to delays in the past. Meanwhile, increased requirements pertaining to the safe conduct of clinical trials provide a clearer regulatory framework. While international CROs still dominate the CRO market, the number of local Asian CROs are growing, and their overall quality is increasing quickly. Historical problems with doing clinical trials in Asia like intellectual property violations and language barriers are also improving. Western drug companies should take advantage of these favorable conditions to register and sell their products in the Asian markets, although they must develop their Asian strategy carefully to ensure success.