Pharma Trials Heading South

May 21, 2009

Sanofi-Aventis’ recent acquisitions in Latin America are part of a growing trend of pharma companies looking to expand away from their traditional strongholds in the US and Europe. But it’s not just product sales that are driving pharma growth in the Latin American market—increasingly, the region is becoming a popular setting for clinical trials. Covance, for example, recently opened new clinical development offices in both Peru and Chile, and has expanded its operations in Argentina.

So why is Latin America such an attractive place for clinical trials, particularly compared to lower cost

countries such as China? According to Tibor Papp, head of advisory and transactions business at consultancy PharmaVentures, the environment for carrying out trials in Latin America has recently become more friendly. "New regulations now allow companies to start clinical trials there faster," said Papp. "This is an additional advantage on top of the diverse population of 600 million people, most of whom are treatment naïve, which means there was no confusion or co-medication."

The setup times are also attractive; in parts of Europe, for example, it can take a year for a trial to get the go-ahead, whereas it takes just 3–6 months in countries like Mexico and Brazil. "Brazil has traditionally been slow because there used to be a regulation that forced companies to submit clinical trial applications to the ethics committee and then the competent authority in a sequential manner," noted Papp. "This was changed recently, so they can submit in parallel, reducing the setup time by a couple of months, making Brazil as attractive as other countries like Argentina and Mexico."

The population diversity, however, is what gives Latin America a real edge over places like China and India for running clinical trials. The variety of ethnic groups in Latin American countries—including a very large Hispanic population—is a big advantage. "As the largest minority [population] in the US, if you can show the advantages (or lack of them) of a drug in this population, it is very helpful," said Papp.

Carrying out local trials also makes it easier to get approval for a drug in that particular market, after it is approved in the US or Europe. "If you submit the application that you’d sent to the US or EU authorities and it includes local trial data, the cost and time of a local application is limited," Papp said. "Product approval is faster and easier, so it makes sense that if you want to conduct a trial in an emerging market for cost or speed reasons, to do it in a territory where you are going to seek approval."

Similarly, the Chinese authorities want pharma companies to carry out Chinese trials as well. "You have a choice: Do you want to carry out a trial in Latin America and get faster approval there, do you conduct it in China and get faster approval in China, or should you conduct two trials, one in each?" Papp asks. "This really depends on the attractiveness of a market for a particular disease. I don’t think there is a clear black-and-white answer to this; it depends on where they think there will be a bigger market for the product. But Latin America has the advantage of the multiplicity of ethnic groups that China cannot have – and one of the largest populations of Hispanics. In China you are essentially doing trials for the Chinese market."

According to clinicaltrials.gov, more than 4,000 trials are being carried out in Latin America, and that number is increasing every year. Globally, Latin America is currently conducting 10 percent of all trials.

Said Papp: "Latin American clinical trials are high quality—both the science and the investigators —and patient retention is high, recruitment is fast, and the population is more applicable to the US market. If I were a company that targets the US market, I would definitely look at Latin America for my clinical trials ahead of China, unless the cost were so high that even a 5 percent reduction in cost would be significant."