Business Accent

Specialists in preclinical sciences

Dr T S Kumaravel, Director, Preclinical Consultations UK and Dr S S Murugan, Scientific Director, RCC India consider the scope for Indian CROs to specialise in pre-clinical sciences

The economic recession, coupled with several blockbuster drugs going off patent in the next few years, has affected many biopharmaceutical industries, with many pharma companies decreasing their in-house pre-clinical facilities and staff and diverting their financial resources to late phase clinical developments. When the economy improves, companies will resume drug discovery/pre-clinical testing, but instead of developing pre-clinical facilities in-house, many pharma companies will resort to using Contract Research Organisations (CROs) to fill pre-clinical gaps in their own organisations. Additionally, biotech companies will prefer to use CROs as their working partners. This change in organisational philosophy will make pharma companies even more dependent on CROs. The concept of 'in-situ CRO' is an extreme example that clearly demonstrates how closely pharma companies are interconnected with CROs. In this business model, currently being explored Europr, CROs conduct the outsourced work while physically located within the pharma company's facility. This gives pharma companies very good control on outsourced work. Until about 10-15 years ago, CROs were merely seen as service providers for pharma companies. The CROs generated routine data at the request of the client companies and did not contribute more widely to the drug development process. To keep the costs down, CROs were staffed by technicians who merely maintained good laboratory practices (GLP) as per agreed protocols and standard operating procedures (SOPs). They did not have any scientific credibility of their own. This system began changing during mid to late 1990's, when big CROs, like Covance Laboratories, started attracting highly qualified scientists and developed as a centre of scientific excellence in drug development. By doing so, CROs, instead of only conducting work for their clients, were also able to guide them through the entire drug development process. The dynamics of interactions between CROs and pharmas in recent times changed from "service providers" to that of "working partners" - a major step forward in the history of CROs. CROs with good scientific profile gained massive experience and captured the majority of the pre-clinical market.

CROs in India currently find themselves in the same position their Western counterparts held 10-15 years ago. In today's economic climate, most Indian CROs focus on providing pre-clinical services to Indian and few international markets. It is expected that Indian CROs will be in the limelight when the recession ends, because all companies will focus on cost effectiveness and look for cheaper CROs in Asia that can do quality work in a systematic, timely manner. Furthermore, a substantial growth in pre-clinical outsource market is predicted from 2011 onwards, due to the implementation of REACH legislation and ever tightening control on chemical, tobacco, cosmetics and food safety. These factors will further drive pre-clinical market towards Indian CROs.

Changing the perceptions

Dr T S Kumaravel

We have recently interviewed several European companies (pharma, cosmetics, metallurgy, agrochemical and medical devices) on their views on outsourcing pre-clinical studies to India. All these companies are planning to outsource work to Indian CROs over the next few years. However, there was some hesitation, relating firstly to interaction with Indian CROs (due to difference in work culture, time difference and study monitoring) and secondly, due to the GLP status of the Indian CROs, as India is still an observer to the Organisation for Economic Co-operation and Development's (OECD's) Working Group on GLP and not a sitting member.

The scientific profile of Indian CROs was another concern, with Europena companies worrying if Indian CROs will be able to handle unexpected results. Not many scientists from Indian CROs attend international meetings and conferences and this too did not help perceptions. Quality of reports and timelines and logistics of sending the test materials, reports, etc were other concerns

These issues arise mainly due to lack of awareness, because western companies have not worked with Indian CROs before. Indian CROs can help them overcome this initial hesitation by fast tracking from the current passive "service provider" to a "proactive CRO" with services that match their western counterparts, and meet international client expectations. We analyse some critical factors that would help Indian CROs to tap the international pre-clinical market.

1. Governmental initiatives

India was unsuccessful in the last Mutual Joint Visit (MJV) by OECD in 2008, and this did not help Indian CROs. The Indian government should make this a top priority so that the Indian national GLP programme is approved by the OECD working group as soon as possible. They can do so by providing strong leadership and support necessary for the national GLP programme. It should be noted that most Indian CROs are currently accredited by German GLP authorities and that their work meets the internationally accepted standards.

We are disappointed to point out that certain western companies carrying out multi-site studies involving Indian laboratories are encouraged (by their in-house QA units) to treat the Indian test facility as a non-GLP facility, irrespective of whether or not they hold German GLP accreditation. We think such harsh treatment of Indian laboratories is not justified. This further highlights the need to get the Indian national GLP program approved by OECD at the earliest.

It is encouraging to note that Government of India has realised the business potential of the CRO sector and is gearing up for the upsurge in CROs. In recent times, the Indian government has taken several initiatives to boost CROs and pharmas in India (Report of the Task Force, Ministry of Commerce & Industry, December 12, 2008). They are looking at service tax exemption for pharma R&D, prioritising Venture Capital (VC) based funding to set up large CROs and simplifying approval procedures ie., CROs to be provided one-time clearances for export/import of materials. These initiatives will further boost Indian CROs and allow them to tap international markets.

2. CRO industry-wide initiatives

Dr S S Murugan

Indian pre-clinical CROs can take some collective initiatives to boost their image in the international market. One such initiative is to create national level platforms, such as conferences, workshop and meetings that allow for the exchange of ideas and encourage debates on science and regulation. Such development will be keenly observed by western companies and would promote the scientific profile of Indian CROs as a whole. Formation of industry-wide consortium such as the IWGT, ILSI, IGG; to drive science in India would be very helpful. Moreover, there are exciting opportunities for collaboration between CROs and educational institutions. New educational courses such as Master's degrees in pre-clinical toxicology, risk assessment, regulatory affairs, pharma MBA, etc. can be initiated. Such initiatives can be very rewarding both for the students and for the CROs while simultaneously increasing awareness of Indian service providers.

3. Individual company initiatives

Indian CROs are now at a stage where they are ready to capitalise the majority share of the international pre-clinical market. However, there are certain issues to be taken care of before this can happen. First is the challenge of meeting the western client expectations and to win their confidence. There are several ways of accomplishing this. Indian CROs should establish offices in Europe and US to coordinate all their sales and scientific activities. It would be preferable to staff these offices with employees who have worked both in India and abroad. Moreover, recruiting international scientists (NRIs) to key senior positions based in India would promote client confidence.

Indian CROs should increase their scientific profiles by publishing their research data; attending conferences; taking part in national and international meetings and workshops; and recruiting reputed scientists from abroad. The formation of scientific, regulatory and consultancy groups within CROs would help drive the scientific profiles of the company forward.

Building study director (SD) confidence is another key issue that needs to be addressed immediately. Many of the western companies we interviewed said they really did not have much interaction with SDs from Indian CROs. They were anxious to know how Indian SDs compare with those from western CROs; and how good their control would be on the outsourced studies. It would be beneficial to encourage SDs to accompany business development staff on their routine client visits as this would promote client confidence. SDs should also be encouraged to take on sales roles, because they clearly understand what the client wants. Programme management is another area that can help Indian CROs to communicate effectively with foreign clientele.

Based on our experience working with European and US companies we have analysed some critical factors that would help Indian CROs equip themselves to take on expected increase in the international pre-clinical outsource market in the near future. It is further advisable to look for clients not only from pharma and chemical industries, but also proactively approach other sectors such as cosmetics, food products, medical devices and tobacco. We therefore see the next few years as an excellent opportunity for Indian CROs specialising in pre-clinical sciences to develop and capture the majority of the international pre-clinical market.

Dr T S Kumaravel and Dr S S Murugan can be reached at 'kumaravelts@pre-clinicaltox.com' and 'siva. murugan@rccltd.in' respectively