In the last 10 years, skyrocketing costs of R&D have led to a growth explosion in the clinical services industry as pharma companies scramble to cut costs.
The average cost of running a US-based clinical trials per patient is $5404 for Phase I, $6538 for Phase II and $7635 for Phase III.
CROs are the real winners, with drug companies now spending an average of 30 per cent of their clinical affairs budgets on outsourcing, according to a report by market intelligence firm >Cutting Edge Information.
CROs operating in Eastern and Central Europe and India are proving popular choices, as the standards of these countries are now falling in line with that of the US Food and Drug Administration (FDA) and are offering even further cost savings, primarily through cheap labour and facilities.
In India, for example, clinical trials can cost up to 60 per cent less than in the US, according to an analysis by Rabo India Finance.
These countries can also speed up the time of trials with quicker patient recruitment times due to a large treatment naieve patient population and a mass of physicians and patients eager to participate in drug trials.
This is a major draw card for companies, as the US is now enrolling half as many patients in clinical trials as it did five years ago due to tough competition in finding patients suitable or willing to participate, and patient recruitment is now consuming more time than any other clinical trial activity, costing the industry millions of dollars.
However, According to the report, titled >"Accelerating Clinical Trials: Budgets, Patient Recruitment and Productivity", the reality is that clinical trials outsourced to these emerging markets don't necessarily guarantee a strict per patient cost-saving compared to trials run in the US.
While local costs involving staffing and patients are lese expensive, other costs such as communication, travel and shipping can drive the overall cost of overseas trials into the range of US trials. Some companies even experience higher per-patient cost in overseas trials, said the report.
Taking this into account, the real benefit of conducting trials in off-shore locations lies not in the actual cost of running the trial, but the time that these trials can save through faster patient recruitment.
Each day saved in clinical development is one day earlier the drug can be released onto the market and start bringing in the bucks. And this can be the difference of millions in the case of a blockbuster.
So whether or not the actual trial costs may or may not significant, companies who outsource clinical work to Eastern Europe and India will accelerate clinical development and be in a better position to reach the market faster and leave the competition lagging behind.