Growing pharma market driving CRO industry in APAC
At 31 per cent of the total, Asia Pacific has the second largest share of the CRO production market. Much of this growth is driven by pharmaceutical and biotechnology companies in the United States and Western Europe increasingly outsourcing their core research activities to
CROs in developing countries in order to contain costs. It is seen that many multinational CROs are themselves now expanding their operations to developing countries in Asia Pacific, taking advantage of lower costs for conducting clinical trials in these regions compared to the US and European countries. Speaking to BioSpectrum Asia Magazine, Karen Chu, Corporate Vice President, Global Clinical Operations, PAREXEL and Chang Lee, Vice President, PAREXEL Consulting APAC elaborated on opportunities, growth and challenges of the APAC CRO market. Edited excerpts;
In your opinion, what are the biggest challenges CROs in the APAC region face today?
Karen Chu: In the APAC region, a small talent pool continues to be the biggest challenge CROs are facing as the pharmaceutical R&D market grows in this area. Both China and Japan are experiencing a lack of talent in the drug development industry. In China, due to the most recent regulatory change and significant investment into small to mid-sized biotech/pharmaceutical companies, talent is needed in research and development, project management, regulatory strategy, and clinical operations. With the China National Drug Administration (CDA) adopting ICH-GCP, the workforce need to be well-versed in these procedures and be able to operate at a more advanced level.
In contrast, Japan’s R&D is much more wellestablished and robust, especially in the last decade, and regulations have also been more stable. As a result, in Japan there is greater need for talent with a regional and global project management skillset. English-speaking ability is also a mandatory component. In addition, as simultaneous global trials are running in Japan, the country is in need of operational staff who are able to address the differences in various cultures and different clinical trial landscapes.
Chang Lee: The biggest challenge CROs in the APAC region, especially in China, face today is the lack of adequate clinical research infrastructure specifically limited clinical research sites, lack of qualified Principal Investigator (PI) and research staff, and inefficient IRB/EC processes, among other challenges.
What according to you are some of the key drivers and restraints of APAC CRO industry?
Karen Chu: Key drivers of the APAC CRO industry continue to be the pharmaceutical market in the region. China is anticipated to become the largest pharmaceutical market by 2020, and Japan still remains in the top five. In addition, both have large patient populations which allow clinical trials to enroll much faster than other markets, and both countries continue to be an attractive region for biopharmaceutical companies to conduct clinical research.
Another key driver for CROs are the capital investments pouring into Chinese biopharmaceutical companies, as well as the traditional local pharmaceutical companies investing in transforming themselves into more innovative companies. Many of these companies lack the manpower to design drug development strategies and efficiently execute trials, which is another driver of opportunity for CROs in the industry. It is worthy to note that in previous years, China seemed to also offer another benefit of low costs, however recently as competition has
increased, this benefit has diminished. This presents a potential restraint for CROs, as clients in this region often expect a more cost-effective solution. One of the ways to curb the cost and also to ensure a steady in-flow of talent, PAREXEL has been investing in multiple fronts to development its own pipeline of talent, under strategic work force planning. In the past two years, there has been significant investment place into local talent development programs, exchange programs, etc.
Chang Lee: In my opinion, the major drivers of the APAC CRO industry include the growing of pharmaceutical market size, regulatory reform in China, increased investment and innovation in drug developments and more global pharma companies coming to APAC. Restraints include the shortage of adequate expertise, high turn-over rate in staff, increased study cost and selection of right technology for the region.
What are the countries in Asia exhibiting promising growth in CRO space and why?
Karen Chu: China exhibits some of the most promising growth in the pre-clinical, clinical, and big data space. There may even be a potential uptick in medical device development and trials. The second is Japan, where the most growth might concentrate in big data, new technology platforms and innovation.
Chang Lee: Yes, China has the largest opportunity for growth, due to the recent regulatory reforms and increased investment in innovation. Another growth area is Korea. The success of Samsung’s bio-tech venture has stimulated flows of investments from enterprises and government. These investments have resulted in ample lab spaces at many biopharmaceutical research complexes — a hallmark of industrial-research facilities — and sophisticated, state-of-the-art equipment.
What do you envision as the future for the CRO industry – 10 years from now?
Karen Chu: In China, I envision that the CRO industry will mimic that of the western countries – consolidation of local CROs and vendors. The service provider will become more of one-stopshop with global expertise sitting locally for the biopharmaceutical companies to tap into. In addition, we can expect very innovative ways to conduct trials with technology and tap into the large population in China. In 10 years, big data becomes even more powerful. We can also expect much more rigor in post-marketing surveillance – if that term still means the same thing in 10 years. Basically, there will be much more “management” from the government on products that are marketed.
Chang Lee: In the future, I envision that the traditional CRO model (i.e., clinical trial focused) is going to be changed to CRO plus (something else) model. For example, this might include CRO + Marketing Data; CRO + Clinical Lab; CRO + CMO; CRO + technology (e.g., AI, big data).
Could you please highlight some of the key milestones PAREXEL has crossed in the last 2-3 years? And how do these provide the company leverage in the APAC region?
Karen Chu: In the last 2-3 years, PAREXEL has successfully brought all its business services into Asia. Now, not only are the traditional clinical research services PAREXEL has delivered in the region for 20+ years, but also PAREXEL’s regulatory and market access services are able to support our clients in Asia. This is very meaningful as PAREXEL delivers an integrated service offering and one-stopshop for our clients based in Asia. PAREXEL’s longtime presence and depth of expertise in the region has enabled trust amongst our clients in APAC, and we look forward to continuing to advance these partnerships.
Does PAREXEL have any plans for further expansion in Asia?
Karen Chu: The APAC region is a top priority for PAREXEL and will continue to be as the industry grows. The region shows great promise and we are prepared to meet the needs of our clients as they work to deliver important new therapies across the globe.
Karen Chu, Corporate Vice President, Global Clinical Operations, PAREXEL
Chang Lee, Vice President,PAREXEL Consulting APAC
Karen Chu, Corporate Vice President, Global Clinical Operations, PAREXEL
Chang Lee, Vice President, PAREXEL Consulting APAC