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GlaxoSmithKline Moves Trials Abroad
Heather Tomlinson
The Guardian
November 1, 2004
The drugs giant GlaxoSmithKline is moving a third of its clinical
trials offshore to countries such as India and Poland to cut costs.
More than 90% of the firm's human trials occur in the west. Drugs
firms typically hire cash-strapped students to do safety tests on
healthy people as well as sufferers of the disease for whom the drugs
are designed.
A growing medical research industry in the far east and eastern Europe
is luring Glaxo. There, patients do not have to be paid as much to
test the drugs and hospital running costs are lower. An increasing
number of clinical trial contractors are setting up operations in
those regions.
In the UK, a healthy volunteer would be paid about £100 a night for
a typical study. In India, the cost of conducting clinical trials
can be as little as a tenth of the costs in the west, a pharmaceutical
industry source said.
Glaxo wants to move a third of its trials overseas within the next
two years. The company is facing an escalating research bill because
the number of clinical trial projects has increased to more than 80,
and the costs get higher the nearer the drugs get to market.
At the same time as GSK's costs are increasing, the firm has lost
sales from a number of its top-selling drugs which have lost their
patent and therefore exclusivity.
The industry as a whole is facing pressure on its profit margins and
there is the prospect of a fall in drug prices in the US and the UK.
"There is no alternative to really streamlining research and development
departments," said Glaxo's chief executive, Jean-Pierre Garnier, last
week. "We are trying to move 30% of our clinical trials to low-cost
countries."
John Coombe, the finance director, said that there should not be "too
much" of an effect on the number of scientific staff in the UK and
the US since trials could be monitored from afar.
The company has set a two-year target for moving a third of its trials
overseas.
Glaxo already conducts trials in Poland and will expand its activities
there. It is also looking at working in South American countries.
Mr Coombe said that the firm could not "ignore" India but there were
issues with keeping the standards that drugs regulators required.
The US regulator, the Food and Drug Administration, is widely thought
to prefer trials on its own soil, and western countries generally
prefer studies to be done in western hospitals. Companies often conduct
two or three large drugs trials to present to a regulatory agency;
if the majority of the data comes from standard western sources regulators
might accept it.
As the industry moves its clinical trials offshore, it is also likely
to look at moving its research too, not only for reasons of cost.
A lot of this work is done on animals, and militancy within the animal
rights movement makes the countries of the far east, such as Singapore
and China, attractive to drugs firms.
GlaxoSmithKline has started collaborating with Ranbaxy, an Indian
company making generic versions of drugs, in working on certain early-stage
drug development and research. It has also opened a research facility
in Singapore. As well as keeping costs down as its drug development
process advances, Glaxo and other drug companies face a crisis over
the reputation of the industry.
Dr Garnier said the way to address the drug industry's reputation
was to find good drugs solving "big" healthcare problems. "My generation
will have such an incidence of Alzheimer's there are not enough hospital
beds to accommodate all of those people. If industry comes through
with those efforts to allow Alzheimer's patients to operate [normally],
it will save gazillions of dollars to the healthcare system and the
pain of the families."
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