Other players in the clinical trials industry are also evolving. For example, clinical suppliers are gradually moving beyond
their traditional activities of packaging, labeling (in local languages), storing, distributing, and reconciling drugs and
kits to also include associated equipment, instrumentation, and associated drugs. Currently, the main activities account for
80% to 90% of business. Clinical suppliers also face challenges in expanding their business in emerging markets. An important player that has received relatively little attention is drug wholesalers—the suppliers of comparator drugs for
clinical trials. Sponsors usually have to go through these wholesalers to source drugs for comparison. The alternative is
to obtain comparators directly from market rivals and risk signaling to them that they are testing a competitive product.
Hence, drug wholesalers play a vital role as a third-party dealer by allowing the sponsor to remain confidential. There is an industry trend toward the outsourcing of packaging and labeling—which we believe currently stands at over 90%
of trials—resulting in very little premium logistic requirements to move drugs from manufacturer to trial site. The main capabilities
required by these new entrants are knowledge of labeling requirements (an ability to design and produce labels adhering to
EU and local regulations [including translation], special marking to distinguish from nonclinical trial packages, releafleting,
etc.); the ability to repackage materials and prepare kits, including the expertise to alter the composition of the drug to
ensure blinding via recapsulation; and splitting shipments into smaller quantities and creation of kits. The main conclusion is that the risks associated with clinical trials are rising, as is the global reach. We've identified
three key emerging trends: increases in activity in CEE, more complex services provided throughout the value chain, and the
emergence of hybrid logistics providers. We are not claiming that the information we have provided is definitive; however,
the absence of usable figures means that even tentative estimates can be useful for corporate decision-making. Anthony J. Evans,* PhD, is assistant professor of economics and Terence Tse, PhD, is assistant professor of finance at ESCP-EAP European School of Management, 527 Finchley Road, Hampstead, London NW3
7BG, email: aevans@escp-eap.net
*To whom all correspondence should be addressed. References 1. The Compound Annual Growth Rate of total blockbuster sales was forecast to be 1.6% from 2005 to 2008, compared to the 9%
growth seen in 2002 to 2005. See "Beyond the Blockbuster Drug," Business Insights, February 2005, http://www.piribo.com/publications/drug_delivery/beyond_blockbuster_drug.html. 2. "Changing Patterns of Pharmaceutical Innovation," National Institute for Health Care Management, Washington, DC, May 2002,
http://www.nihcm.org/~nihcmor/pdf/innovations.pdf. 3. Source: company website: http://www.worldcourier.com/Global/indexHome6CTMmenu.html
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