In 2000, there were 26 unique 1572s filed; this number increased to 76 in 2004 (0.2% of the global 1572 filings). Experts
predict that by 2010 China will become the fifth largest pharmaceutical market and the world's third largest market by 2020.6 Simply put, China is the next frontier for pharmaceutical clinical trials and offers both opportunities and challenges for
the pharmaceutical industry. Investigator grant budgeting Similar to India, investigator grant budgeting in China follows key practices that create a cost-friendly environment for
clinical trials. For example:
- Only public hospitals are allowed to participate in clinical research.
- Most contracts are solely between the investigator and the hospital.
- Budgets are built according to a local office's experience or sometimes according to headquarters' "gut feelings."
- Most budgets are built on a cost-per-visit basis, although the costs for some expensive procedures, such as biopsies, are
disclosed to the investigator as individual line items.
Procedures. On average, procedure costs in China are 39% of the cost in the United States (examples can be seen in Table 2). Procedure
fees are hospital specific and almost all public hospitals provide the procedure costs to the public either in the hospital
or online. However, these publicly available prices do not represent clinical costs and can only be used as one of the sources
of information to begin budgeting. Professional fees. Physician fees are usually budgeted per visit. The principal investigator decides if additional staff should be hired and
whether study coordinator fees are paid on a per visit basis or on a monthly salary. Subject reimbursement is provided for
patients who travel from a long distance and for invasive procedures. Pharmacy fees are often included in the contract with
the hospital and include specific milestones. Infused medications are usually double or triple the cost for an oral or topical
medication. On average, professional fees are 50% of the costs in the United States. Table 2 displays some specific examples.
Hospital fees. Administration fees are typical in hospital contracts. Hospital bed fees are used for surgical procedures. A "leading fee,"
in the form of a certain percentage, is applied for hospitals that are overseeing the study. Site costs are commonly included
in the hospital contract. Overhead. The investigator contract and the hospital contract may have two different overhead percentages. Overhead is applied to both
the procedures and the professional fees (including both subject reimbursement and pharmacy fees) and can be presented as
both overhead and administrative fees on budgets. Most contracts have an overhead of 10%. Investigator grant negotiation In China, budgets are almost always negotiated directly with the principal investigator and signed by the principal investigator
and the hospital official, and sealed or stamped by the hospital. Study managers or CROs negotiate the contracts locally;
the common negotiating currency is the yuan, although occasionally contracts are in dollars or euros. Communication is key in successful negotiation in China. Compared to India, English is not as widely spoken in China; therefore,
consistency and transparency are essential in presenting and negotiating the budgets. Conclusion Clearly, China and India are burgeoning regions for the pharmaceutical industry and represent what some have called "the industry's
single biggest opportunity for growth." But realizing the promise both countries hold will take a full understanding of their
clinical market community and their approach to budgeting and negotiating clinical trial contracts. The rapid growth of clinical trials in both of these emerging economies and the array of local standards that can affect the
bottom line will make it increasingly difficult for companies to operate in these countries without expertise in negotiation
and budgeting. These particular negotiations are specific to the phase and complexity of the study as well as the site's experience
and ability to execute the trial. The clinical research community will also need to understand fully the areas of patient recruitment, trial monitoring, data
collection and management, and statistical analysis of data generated from clinical trials in both countries. And even with
a full understanding of these factors, pharmaceutical companies will need to rely on an industry aggregate of prices that
enables them to realize the savings and efficiency inherent in clinical trials in China and India.
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