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Report: Australia 60% cheaper than US for clinical trials

Melissa Fassbender

By Melissa Fassbender

26-Oct-2016
Last updated on 26-Oct-2016 at 17:50 GMT2016-10-26T17:50:54Z

(Image: iStock/AlexKosev)
(Image: iStock/AlexKosev)

With a tax incentive program making clinical trials up to 60% more cost-effective, Australia is a “gateway” to larger studies throughout Asia, says CRO.

According to the report published by Frost & Sullivan, the clinical trials market is expected to reach $615m by 2019, growing at a CAGR of 12%. Additionally, early phase clinical trials have been growing at nearly twice this rate and growth is expected to continue.

The magnitude of Australia’s cost competitiveness was quite surprising when we saw the like-for-like comparison of a benchmark early phase clinical trial in the US versus Australia,” Novotech Asia COO, Dr. John Moller told Outsourcing-Pharma.com.

Novotech, an Australian contract research organization (CRO), recently partnered with Deloitte to brief early stage companies on the benefits of tax benefits in the country – which can bring cost savings of up to 60%, compared to clinical trials in the US according to the report.

Often Australia is perceived as high cost but it is possibly the most cost-effective destination in the world,” explained Moller, who said the cost differential is driven by a government cash rebate for research and development, the efficiency of Australian research providers, as well as foreign exchange rate differences. 

Australian currency was probably overvalued for a number of years during the commodities boom but it has now returned to its long-term average,” he added.

A gateway to Asia

The CRO has been seeing an increasing interest from sponsors who view Australia as a “gateway” for conducting larger regional studies in Asia, Moller said.

Australia has a very close relationship with many Asian countries with geographical proximity, overlapping time zones and an increasingly high level of cultural and business understanding,” he explained.

Notably, Asia has a population of 4 billion people, 2 billion of whom are in readily accessible urban areas. 

This is very attractive for sponsors who are keen to accelerate their trials in a high quality environment,” said Moller, who added that a number of clients are adopting a regional strategy wherein “they look for early recruitment and potentially announceable milestones from Australia and New Zealand with high volume recruitment from a number of Asian counties.” 

With “such strong growth in this trend,” Moller said the company has moved the majority of its activity to Asia.

Continuing improvement

Moller said there have been several improvements over the past 10 years in clinical trial efficiently, including advances in online submissions and standard clinical trial agreements.

The country has also implemented a National Mutual Acceptance framework, which Moller explained means scientific and ethical reviews are mutually accepted by 90% of clinical trial sites. 

Clinical trial competition can therefore be one of the biggest challenges particularly in some ‘hot’ therapeutic areas, or where prevalence rates in Australia are low,” he added.

As for the future, Moller said the next five years will see continued improvement in efficiency, with implementation of standardized costing between sites and greater consistency in policies at a governance level.

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