Clinical Trial Costs in Emerging
Geographies: China
R. Stephen Porter, Pharm.D
President, CEO and Chairman VDDI Pharmaceuticals
Director & Co-founder
Dragon Bio-Consultants, Ltd.
Hong Kong, SAR
VDDI Pharmaceuticals
• As its name suggests, VDDI Pharmaceuticals
utilizes a virtual business model.
• Virtual drug development entails: (i) a small core
group of employees responsible for strategic
management, regulatory strategy, and financial
control, (ii) outsourcing all non-core business
functions, including preclinical and clinical drug
development, and (iii) electronic data capture
and data submission to regulatory authorities.
Xemilofiban Summary
• Product has already been studied in both Phase
II and Phase III clinical trials 12K patient
experiences
• Proven safety and efficacy
• Advantages over existing products
• Growing total market flattening sales with
expanded indications
• Advantage of IV to oral conversion
PROPRIETARY
3
Strategy for Development
• Secure Local Operating Company agreement
• Meet with sFDA for Guidance
– Translation key documents
• CMC tech transfer
– PO and IV Formulation
• Phase II III Multi-Center Trials China and Then
US
PROPRIETARY
4
Dragon Bio-consulting:
Services Currently Being Provided
•
•
•
•
•
Clinical Trial Management Services - MASH™
Preclinical translational and toxicology services
Bioprocessing & Engineering Consulting
Inspection and diligence services for cGCP, cGLP, and cGMP
Business and commercial development services in the AsiaPacific pharmaceutical and biotechnology sectors
• Regulatory and resource mobilization services in the AsiaPacific markets
• Partnering and M&A
• Import Export services for Branded and Generic
Pharmaceuticals ( Green Channel Logistics)
Why China
Market:
China is expected to become the world's 3rd-largest prescription drug
market in 2011, and the market in China may be doubled by 2013
(IMS data)
Special SFDA Regulations:
• Clinical trials are required for all imported drugs before marketing.
So, trials for marketing registration will be greatly increase
• Data generated from Chinese sites in a global trial can be used for
an import drug registration, so that the clinical trial can be exempted
if the data comply with SFDA’s requirements. This may save 2-4
years for a new drug to be marketed in China. More global trials
are anticipated as more and more pharmaceutical companies
become aware of this regulatory strategy.
Why China
Trends of Drug Development :
There have been increasing number of R&D centers set up by major
global pharmaceutical companies in China in the last three years. As a
consequence, more and more global trials for new drugs are predicted
to be led from China
CRO’s – clinical development
ASIA
• Mainland China
– Local; Kendle, TigerMed ,
– MNC or JV; Accelovance, Covance, Excel (PPD), ICON (Fountain Medical), Quintiles
• Taiwan
– DCB
• India
– Local; Biocon (Clinigene),
– MNC
• Singapore (Malaysia, Thailand, Vietnam)
– Local; Gleneagle (pan-Asian and Australia)
– MNC; Covance, Parexcel, etc
• South Korea
– MNC and local
Business environment - China
• Perceived market – true market
–
–
–
–
–
Pharma market expected to grow 17% in 2010, becoming 3rd largest in 2015.
Resources needed to penetrate the many diverse markets
Pricing; Biologics 50 – 90% below west, so far sub-standard drugs
Ability/Inability to pay for a treatment
Public health insurance, pricing practices and change!
• Hidden / “Unaccounted” costs
– HR; turn-over, training, efficiency, foreign staff as local employees (rent, schools,
corporate credit cards, foreign currency exchange …)
– Unpredictable and changing regulations
– Corruption
– State sponsored industrial espionage
Business environment - China
 Tax incentive for new and high tech R&D
o Exempt of import duty and VAT for equipment and reagents.
o 1000 Talents program
o 5.85 B USD investment by PRC in Biotech and HC and Pharmaceuticals
 Price pressure on pharmaceuticals.
o New “Measures for the Administration of Drug prices” announced June 2010, offpatented originator pricing will go down
 Legal and Regulatory hurdles:
o Product registration 6-9 months minimum for approvals to begin trials often 1 year of
more
o Clinical trial data acceptance, 1601 trials have been conducted in China by MNCs since
2008. Mostly Phase III-IV
o Levies and import duties
o Competition watchdog ; M&A (In 2010 Pfizer forced to sell animal vaccine to local
company)
 Force foreign business to set-up manufacturing
and operations in China.
Regulatory environment
• Formal regulatory frame work
–
–
–
–
•
•
•
•
SFDA moving towards PIC/S
KFDA moving towards USFDA
ASEAN’s mutual recognition scheme 2012
Central Drugs Standard Control Organization (CDSCO), India,
Directorate General of Health Services, Ministry of Health and Family
Welfare, Government of India (WHO CGMP)
200 Reviewers at SFDA, 2000 at USFDA
Enforcement/Graft
Generic- & TCM-traditions Vs. NCE & NBE
CRO/CMO; Mindset and level of understanding
Market Attractiveness Matrix for
Asia
12
Country
Patient
Access
Cost
Market
Opportunity
Regulatory Approval
timelines
Australia
++
+
+++
2 - 3 months
India
+++++
++++
++
3 -4 months
China
+++++
+++
+++++
10 - 12 months
Korea
+++
++
++++
3 - 4 months
Taiwan
++
++
++
3 – 4 months
Singapore
+
++
+
1- 2 months
Indonesia
+++
++++
+
3 – 4 months
Malaysia
++
+++
++
3 – 4 months
Thailand
+++
+++
+
3 – 4 months
Philippines
+++
++++
+
3 - 4 months
Vietnam
+++
+++++
+
4 – 5 months
N o r t h
A m e r i c a • E u r o p e • A s i a / P a c i f i c • L a t i n
A m e r i c a • A f r i c a
Business environment
The herd mentality in Pharma industry:
May06
Jan07
Dec06
Feb07
Mar07
Apr07
Jun07
AstraZeneca $100
M investment,
R&D Center
Novartis $100 M
investment, R&D
Center in
shanghai, 400
FTEs
Roche plans to
expand R&D
center in
Shanghai
GSK plans to
establish a fully
integrated R&D
center
AstraZeneca
China R&D center
will be located in
Shanghai
GSK sets up a R&D
center (CEDD) in
neurodegenerative
disease in Shanghai
Lilly $100M
investment in
5 years
Amgen sets up
clinical
development
center in Mumbai
Merck / Advinus
risk sharing deal
on metabolic
disease target
Eli Lilly / Nicholas
Piramal
$100M risk
sharing
partnership
AstraZeneca sets
up process R&D
lab in Bangalore
GSK / Ranbaxy
$100 M risk
sharing
partnership
BMS/ Biocon /
Accenture $300M
partnership
GSK / Tata
Consultancy
Service
partnership
China
India
Nov06
Recommended Second Tier Cities
2nd Tier Cities
•Changchun
•Chengdu
•Hangzhou
•Hefei
•Kunming
•Taizhou
•Tianjin
•Xian
•Zhenghou
Blood Draw
Procedure
Country
Blood Draw
Flag
Low (USD)
Medium (USD) High (USD)
USA
22
26
33
China
5
6
7
Hong Kong
7
7
10
Korea
5
6
7
Thailand
2
3
4
Taiwan
10
11
12
Source: GrantPlan® (www.ttc-llc.com)
ECG
Procedure
Country
EC G
Flag
Low (USD)
Medium (USD) High (USD)
USA
99
103
128
China
38
42
56
Hong Kong
32
47
49
Korea
14
21
34
Thailand
17
23
30
Taiwan
32
47
49
Source: GrantPlan® (www.ttc-llc.com)
Initial Physical Exam (~60 min.)
Procedure
Country
Initial
Physical
Exam
Flag
Low (USD)
Medium (USD) High (USD)
USA
202
239
260
China
61
97
151
Hong Kong
111
162
204
Korea
87
91
108
Thailand
53
67
80
Taiwan
55
98
101
Source: GrantPlan® (www.ttc-llc.com)
Physical Exam (~15 min.)
Procedure
Country
Physical
Exam
Flag
Low (USD)
Medium (USD) High (USD)
USA
130
151
152
China
36
50
60
Hong Kong
63
88
105
Korea
40
48
55
Thailand
39
56
89
Taiwan
51
73
94
Source: GrantPlan® (www.ttc-llc.com)
Keys to Success Factors : China
•
Talent – “Hai Gui”
•
Regulatory and compliance
•
Communication and client interface
•
Supporting mechanism – infrastructure and funding
•
Training – start with a clean slate
– Leadership – recruitment and retention
– Technical expertise – Clinical, industrial R&D, and regulatory experience
– Communication with international sponsors
– GLP and cGMP training and practice enforcement
– IND, NDA, ANDA experience
– Working language – English and Chinese, notebook, verbal and written communication
– Recognizing culture differences on both sides (“fee for service” and “guaranteed
results”)
– Need greater support – Ease of procuring patients, sample shipping and etc.
– cGCP, cGLP, cGMP
– Technical training ( Cato, Beckloff Associates etc….)
– Compliance training needs time
Risks: China
• Dynamic / fluid Environment
– Economics, work force training & retention
• (high cost of living & poaching in 1st Tier Cities)
– SFDA regulatory uncertainties
• leading to reluctant clients
• Delayed programs
– Governmental oversight / monitoring (Internet)
• Repatriating monies out of country
• Internet privacy data corruption
• Conflicts between different cultures, traditions, as well as value systems.
– Goal mis-alignment between partners
– Moral Hazard Situations
• Ethical concerns & corruption is endemic
– There are “no secrets” in China
– Contract law
– “Red Envelop mentality”
香港中環Hong Kong SAR
Central,
雪廠街10
號 Company No.: 1429099
HK Registered
新顯利大廈5
樓 55 室
SKYPE:
virtualdoc77
+86.15021242314 (Cell China)
香港公司註冊號碼：1429099
Contact Information
+1(615)445-5761 (Cell USA)
http://dragonbio-consultants.com
R. Stephen Porter, Pharm.D., FCP MRCP
Dragon Bio-Consultants, Ltd.
Suite 55, 5/F New Henry House, 10 Ice House Street
Central, Hong Kong SAR
HK Registered Company No.: 1429099
SKYPE: virtualdoc77
+86.15021242314 (Cell China)
+1(615)445-5761 (Cell USA)
Steve.P@dragonbio-consultants.com
http://dragonbio-consultants.com
香港中環
雪廠街10 號
新顯利大廈5 樓 55 室
香港公司註冊號碼：1429099
VDDI Pharmaceuticals
Chairman, President and CEO
115 Penn Warren Drive
Suite 300-389
Brentwood, TN 37027
(615)445-5761 (cell)
+86.15021242314 (Cell China)
virtualdoc@gmail.com
http://www.virtualdrugdevelopment.com