‘‘CRO industry will develop vigorously in China’’
Clinical trial activity in China has been on the rise since 2007, and the number of Phase I–IV trials revealed a clear upward climb year-on-year, from 487 trials in 2007 to over 1,300 trials in 2016. Despite the bumps and regulatory hurdles that it faced this past decade, China is recognizably the secondlargest pharma market in the world, and its market value is forecasted to reach $200 billion by 2020. The current landscape of clinical trials registered in the country paints a well-balanced, healthy pipeline of drug innovations. Speaking to Aishwarya Venkatesh of BioSpectrum Asia, Wendy Wang, Managing Director, Linical Accelovance Group, elaborates on opportunities and challenges of China’s CRO industry. China-based Linical Accelovance is an awardwinning, niche Contract Research Organization (CRO) focused primarily on oncology, vaccines, and general medicine. With a presence in the US and China, Linical Accelovance has been honored as a Best CRO ViE Award nominee by industry leaders for the past 11 consecutive years, after being evaluated against global CROs for quality of services and performance. Edited
What is the current market size and trends in China’s CRO space?
The CRO market in China started to develop in 1990s, later than those in Europe and America. CRO companies can be divided into 3 categories in China: preclinical CRO, clinical CRO, and drug registration and approval agent CRO. The first two companies usually include the third one, a smaller share, in their “one-stop service”. In 2017, the size of China’s CRO market was over 55 billion RMB (~9 billion USD), with a 19 per cent year-on-year growth compared with 2016, according to the report published by Prospective Industry Research Institute. According to the data of WuXi AppTec, Tigermed, JOINN Lab, and Boji Phar., in 2017, the business income of the four enterprises in the contract R&D service totaled more than 7 billion RMB (excluding non CRO business), which accounted for 10.04 per cent, 3.02 per cent, 0.52 per cent and 0.22 per cent of the total Chinese CRO market, respectively.
What are the key drivers and restraints affecting CRO business in China?
The clinical trials in China include global multicenter clinical trials, import registration clinical trials, and the registered clinical trials of domestic generic pharmaceutical enterprises, in which clinical trials in domestic pharmaceutical enterprises mainly based on generic drugs are the mainstream. Only in the first half of 2018, there are 291 Bio Equivalence (BE) notification submitted to China Food and Drug Administration (CFDA), which is the result of reform of drug registration. Approximately 2793 clinical trials have been registered in Chinese Clinical Trial Register (ChiCTR) in the first half of this year, an increase of 81.63 per cent over the same period of last year. There are approximately 880 registered in CDE Drug Clinical Trial Register (CTR) in the first half of 2018, an increase of 45.45 per cent compared with those in the same period of 2017. These registered clinical trials consist of post-marketing drugs, clinical trials on new therapy, and others. All this indicates that clinical trials have had a huge burst in China. At the same time, there will be more global multicenter clinical trials because of relatively cheaper Chinese manpower and huge patients’ pool since China joined ICH in 2017. This means more opportunities for CRO companies in China.
There are many factors affecting the development of the CRO industry in China. First, the domestic pharmaceutical market is gradually integrating with the international market, and the investment of multinational pharmaceutical enterprises in China has been increasing. Multinational pharmaceutical companies such as Bayer, Merck, Pfizer and Novo Nordisk have invested more than 10 billion RMB in China, and dozens of research centers have been set up
since 2000. Second, domestic policy reform, generic drug consistency evaluation and other policy factors make the clinical trial outsourcing market expand rapidly. The domestic drug market is transforming from “generic drugs” to “innovative drugs”, and government policies encourage innovation. This brings more CROs involved in drug research to reduce uncertainty risks associated with these huge investments and improve research and development efficiency. Furthermore, the large treatment naïve patient pool and lower costs also provide abundant opportunities. On the contrary, there are many constraints affecting the development of CROs. The level of cognition and acceptance is limited. Only about 50 per cent potential subjects are willing to take part in a clinical trial. The development and operation of CROs are not mature. Compared with the foreign CRO companies, the local CRO services are less comprehensive, and the quality of service can be poor. There is a big gap between the authenticity and reliability of clinical trial data. The government supervision system is imperfect. In recent years, many regulations are being revised to make up for defects. There are also common problems, such as the quality of industry personnel, the poor execution of clinical projects, frequent turnover of personnel and low price competition.
Where do you see China’s CRO industry in the next five years?
The CRO industry will develop vigorously in China, with the improvement of the relevant regulations and policies of new drug research and development, the comprehensive reform of the medical and health system, and the development of overseas research and development centers. The growth is expected to be in double digits over the next five years.
Can we expect a CRO industry boom in China in the coming years?
There are many opportunities as well as challenges for China CROs. These include the patent expiration of innovative drugs, booming Traditional Chinese Medicine (TCM) research, CFDA improved supervision and requirements on clinical trial quality, and the government’s policy on the encouragement of innovative drug development.
In 2019, patents of 11 NCE drugs are to expire in China. Patent cliff will make pharmaceutical companies face fierce competition in generic drugs. CROs can help pharmaceutical enterprises achieve accelerated progress in the limited patent period, shorten the R&D cycle, and help bring new drugs on market sooner, which translates into increased demands for CROs. The research and development of TCM is also booming. A few of famous domestic TCM companies have already begun to explore promoting TCM to global markets, which provide opportunities for CROs not only within China but also overseas.
Since July 22, 2016, then CFDA (now National Drug Administration- NDA) has carried out a selfexamination and verification of clinical trial data of drugs, exposing some problems in the field of clinical research in China, such as poor quality of research, lack of research capacity, and nonstandard research behavior to falsification. These findings are helping pave the way for improvements to the quality of clinical research and a stricter regulatory system, which have brought both challenges and opportunities to the CRO industry.
The CRO market in China is closely related to the growth trend of innovative drug development. The generic drug consistency evaluation and the acceleration of drug review has promoted many large pharmaceutical companies to transform actively from generic medicines to new drug research since 2010, which brings huge opportunities for the CRO market. More CRO companies are getting involved in production and sales. The model of new drug research is emerging, that is, VC plus IP plus CRO plus OS. This mode combines venture capital (VC), intellectual property (IP), R&D outsourcing and operation support (OS), which bring lots of pressure to small and medium sized pharmaceutical companies.
In addition, the reform of drug regulatory policy has helped shape the Chinese pharmaceutical industry. The self-examination and verification of clinical trials imposed by CFDA, and the new regulation recommendation of GCP clinical trial institution notification instead of certification by CFDA will enable more hospitals to undertake clinical trials. All these factors contribute to growth opportunities for CROs in China.
Wendy Wang,Managing Director, Linical Accelovance Group, China