Over the last decade pharmaceutical and biotechnology companies have entered a period where they have become confronted by a variety of complex issues affecting their operational efficiency and profitability. It has now become generally acknowledged that the current business models have become both economically unsustainable and operationally unsuited to act quickly enough to produce the types of innovative treatments that will be demanded by global markets. Major issues confronting both the pharmaceutical and biotechnology market are: the requirement to reduce the escalating costs and risks associated with drug development; and reduce clinical trial timelines by improving patient recruitment and improving the efficiency of clinical trial results analysis and reporting. The biopharmaceutical industry has recognized the opportunities and advantages that exist by conducting clinical trials in what are referred to as the emerging markets. This report identifies market dynamics and key regulatory changes, and analyzes the implications and factors which need to be taken into consideration when conducting clinical trials in China.

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Emerging Clinical Trial Locations ' China: Market dynamics and the
changing healthcare and regulatory environment
Published on June 2009
Report Summary
Over the last decade pharmaceutical and biotechnology companies have entered a period where they have become confronted by a
variety of complex issues affecting their operational efficiency and profitability. It has now become generally acknowledged that the
current business models have become both economically unsustainable and operationally unsuited to act quickly enough to produce
the types of innovative treatments that will be demanded by global markets. Major issues confronting both the pharmaceutical and
biotechnology market are: the requirement to reduce the escalating costs and risks associated with drug development; and reduce
clinical trial timelines by improving patient recruitment and improving the efficiency of clinical trial results analysis and reporting. The
biopharmaceutical industry has recognized the opportunities and advantages that exist by conducting clinical trials in what are
referred to as the emerging markets. This report identifies market dynamics and key regulatory changes, and analyzes the
implications and factors which need to be taken into consideration when conducting clinical trials in China.
Table of Content
Table of Contents
Emerging clinical trial locations - China
Executive summary 10
Introduction 10
Conducting clinical trials in emerging markets 11
China 12
Chapter 1 Introduction 14
Summary 14
Introduction 15
Generic competition 15
Intellectual property protection 15
Managing regulatory compliance 17
Cost containment and government funding restrictions 18
Obtaining and maintaining competitive advantage 18
Recruitment and retention of a skilled workforce 19
Improvement to R&D productivity 20
High risks and costs associated with drug development 20
Escalating costs of clinical trials 20
Global increase in the number of clinical trials conducted 23
Longer R&D timelines 24
Increased attrition rates during R&D 26
Clinical trial study design and planning 27
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Clinical trial study design 27
Clinical trial study protocol 28
Clinical trial sponsors 28
Identifying and recruiting patients 28
Role of CROs 29
Information technology and new technology platforms 29
Drivers of development 30
Advantages associated with EDC 30
Advantages of electronic Clinical Trial Management Systems
(CTMS) 30
Cost saving 31
Issues and challenges 31
Electronic records and signatures 31
Integration and linkage of electronic systems 32
Security and confidentiality of patient data 32
Chapter 2 Conducting clinical trials in emerging markets 36
Summary 36
Introduction 37
Market drivers 39
Rapid recruitment of patients and clinical trial investigators 39
Significant cost benefits 41
Improving transparency and efficiency of regulatory systems 42
Harmonization and standardization of regulatory requirements 43
Expansion of CROs 44
Conducive hospital infrastructure and healthcare systems 46
Enhanced clinical site effectiveness 47
Future commercial value 49
Key barriers 50
Concerns over the clinical trial transparency 50
Publication bias 51
Selective reporting 52
Duplicate publication 53
Conflict of interest 53
Availability of demographic and epidemiology data 53
Critical components concerning capacity building 53
Assimilation of individual national regulations and guidelines 56
United States 56
Japan 57
European Union 58
Language translation 59
Ethical challenges 60
Health needs of the population under study 60
Respect for potential and enrolled subjects 61
Ethical oversight 61
Lack of review by institutional review board (IRB) 61
Absence of informed consent 62
Scientific validity 63
Inadequate protection of intellectual property 64
Clinical trial logistics 64
Import licenses and applications 64
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Customs regulations 65
Storage, handling and distribution 66
Selecting an appropriate CRO 67
Patient enrolment 70
Site selection 70
Site activation 71
Patient recruitment 71
Chapter 3 China 74
Summary 74
Introduction 75
Geographic 75
Political 75
Economic 76
Market dynamics 78
Vital statistics 78
Population statistics 78
Epidemiology and prevalence of major disease 78
Pharmaceutical market 80
CRO market 82
Overseas CROs 84
Joint venture companies 85
Local CROs 86
Clinical trial market 88
Market drivers 89
Rapid patient recruitment from large pool of treatment naïve patients 89
Well-trained and motivated clinical trial investigators 89
Major cost savings 89
Increasing importance of the pharmaceutical market in China 90
US government opens FDA offices in China 91
Financial support and incentives from the Chinese government 92
Creation of the Chinese Clinical Trial Register (CHiCTR) 92
Key barriers 94
Cultural and linguistic 94
Delays to application and gaining approval 94
Due diligence required to ensure intellectual property protection 95
Issues over importation and importation licenses 95
Monitor compliance of SFDA GCP with ICH GCP 95
Healthcare 96
Healthcare system 96
Overview 96
Healthcare reforms 98
Healthcare institutions 99
Hospital resources 100
Regulation 102
Regulatory authorities 102
State Food and Drug Administration (SFDA) 102
Department of drug registration 103
Clinical trial regulation 104
Application and approval of the new drug clinical trial study 104
Registration approval for the manufacture of the new drug for market 105
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Legislation 108
Patent Law and WTO TRIPS 108
Drug Administration Law of the People's Republic of China 111
Outlook 115
Chapter 4 Appendix 118
Introduction to clinical trials 118
Clinical trial phases 118
Phase I 118
Phase II 118
Phase III 119
Phase IV 119
What is a clinical trial 119
Clinical trials of pharmaceutical agents 120
Types of clinical trial 121
Pilot studies 121
Proof of concept (PoC) trials 121
Randomized clinical studies 121
Controlled clinical trials 121
Parallel studies 122
Parallel group trials 122
Cohort studies 122
Case control studies 122
Role of the chief investigator 123
Clinical trial protocol and procedure 123
Determination of the clinical trial size 124
Role of the coordinating centre and trials unit 124
Role of the trial coordinator 124
The trial principle investigator 125
Forms and data management 125
Trial data analysis and evaluation 126
Ethical issues and conduct of clinical trial research 126
Interpretation and publication of clinical trial results 127
Principle regulatory agencies 127
The European Agency for the Evaluation of Medicinal Products (EMEA) 127
The United States Food and Drug Administration (US FDA) 127
Japanese Ministry of Health, Labor and Welfare (MHLW) 128
Methodology statement 129
Primary Data and Information Gathering 129
Secondary data and information gathering 130
Definitions of Product-Life Cycle stages 132
Glossary of abbreviations and acronyms 133
List of Figures
Figure 1.1: Key issues facing Pharma and Biotech companies 16
Figure 1.2: Cost of bringing a drug to market ($m), 1975-2008 21
Figure 1.3: Pharmaceutical R&D expenditure ($bn), 2004-2009e 22
Figure 1.4: Biotechnology R&D expenditure ($bn), 2004-2009e 22
Figure 1.5: Cost of clinical trials in the US ($bn), 2005-2011e 23
Figure 2.6: Comparison of locations across selected countries 38
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Figure 2.7: Korean Food and Drug Administration (KFDA) Approval Process 43
Figure 2.8: CRO Segment Leaders 45
Figure 2.9: Enhanced clinical site effectiveness (patients per site) in the emerging countries 48
Figure 2.10: Fewer ineffective sites in the emerging countries 48
Figure 2.11: Critical components for capacity building/conducting clinical trials 54
Figure 2.12: Assessing clinical trial location feasibility 55
Figure 2.13: CRO selection criteria 70
Figure 3.14: Administrative divisions of the People's Republic of China 77
Figure 3.15: Pharma market in China ($), 2007-2008 81
Figure 3.16: CRO market in China (US$), 2007-2012 83
Figure 3.17: Cost of clinical trials (%) in China vs western countries 90
Figure 3.18: The Chinese Healthcare System 97
Figure 3.19: NRCMCS medical cover cost and benefits in China 99
Figure 3.20: Current drug approval and evaluation process in China 105
Figure 3.21: Application and approval procedure for clinical trials China 107
Figure 3.22: Location of accredited sites for clinical trials in China 113
List of Tables
Table 2.1: Demographics of selected emerging markets, 2007 40
Table 2.2: Ethical principles & their application for research 62
Table 3.3: China Population Projections (m people), 1950-2050 79
Table 3.4: Ten leading causes of death in China, 2002 79
Table 3.5: Prevalence of major cancers in China, 2007 80
Table 3.6: Top 10 pharmaceutical companies ($m) in China, 2008 82
Table 3.7: Major multinational CROs operating in China 84
Table 3.8: Local Chinese owned CROs 87
Table 3.9: Number of healthcare institutions according to ownership China 100
Table 3.10: Total number of hospitals by ranking China 101
Table 3.11: Chinese government agencies responsible for drug regulation 102
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