The number of clinical trials being run in China increased 25 per cent between 2002-2004, by which point there were more than 250 trials in progress, all sponsored by multinational companies.
Leading the way are companies like Roche and AstraZeneca, which are now operating their own clinical trial centres.
In the US and Europe, drug companies now spend around $1 bn on developing a new drug, an amount that is buoyed by the increasingly high cost of clinical trials.
China can offer drug companies a way to slash these clinical trial costs and is already a well-established hub of low-cost manufacturing for the pharma industry.
In addition, drug companies looking to run clinical trials are being drawn to China by its expansive 1.3 bn patient population and broad disease profile, as well as the potential for rapid patient recruiting.
"Because the Chinese population is mostly concentrated in metropolitan areas that include formerly state-run hospitals, this provides for a large pool of potential patients with ready access to high-quality hospitals that qualify as clinical study centres," said Wenli Ding, a healthcare consultant in Kline's Shanghai office.
"There are also significant numbers of the rural poor, who otherwise do not have access to medical care, who often seek out clinical trials as a way to obtain treatment. In fact, this is one area where the State Food & Drug Administration (SFDA) is working to develop and implement ethics policies and practices," said Ding.
Since China's recent entry into the World Trade Organization (WTO), the SFDA has been developing a number of such infrastructure aimed at increasing confidence levels within the foreign investment community.
Many potential international outsourcing contracts have been kept away from China the past by drug companies who hold fears over the country's inadequate legislation on patent protection, regulatory issues and intellectual property (IP) rights.
Chinese contract research organisations (CROs) are now being encouraged to adhere to international good clinical practices (GCP) and IP standards and such initiatives are expected to drive the growth of clinical trials in China, particularly when this compliance becomes compulsory.