Pushing a new drug past the daunting scrutiny of the FDA and onto the shelves demands a typical outlay of $200 million. Average in all the remedies that fail along this four-phase process and that single success may have to pull in $897 million before its manufacturer turns a profit. Understanding these astounding figures grows is easier when one considers the up to $100,000 per-patient cost of testing over the long term in the United States.

Given the cost for doing this testing in the United States, many large pharmaceutical companies have taken clinical drug trials offshore. In a number of countries, including China and India, the per-patient test is 50 to 80 percent less than it is here, making the decision to complete human tests overseas a no-brainer. But for smaller biotech firms, the decision, while alluring, may not be quite so simple.

Both the benefits and hurdles are covered in the panel discussion “Off-Shoring Clinical Trials: Where? Why? & How?” on Monday, October 16, at 2:15 p.m. at Loews Philadelphia Hotel. This seminar takes place as part Biotech 2006 Conference, which is co-sponsored by the Biotech Council of New Jersey (ww.biotechnj.org) and Pennsylvania Bio (www.pennsylvaniabio.org). The event continues on Tuesday, October 17. Cost for workshops only, $650; for full sessions, $1175. Visit www.biotech2006.org to register and for more information.

Panelists for the discussion group “Off-Shoring Clinical Trials” include Ulrich Grau, president and CEO of Lux Biosciences; Nyan Nanavati, vice president of PAREXI Clinical Approvals; Carol Cruickshank, vice president of A.T. Kearney; Ramesh Kumar, CEO of Onconova Therapeutics; and James Taylor, worldwide head of outsourcing for Pfizer.

Grau, a native of Frankfurt, Germany, earned his bachelor’s degree in biochemistry from Stuttgart University in l978. He came to the United States to earn a Ph.D. and to do post-doctoral work at Purdue University. A diabetes researcher at one stage in his career, Grau invented a a long acting insulin for later stages of the disease.

No stranger to giant corporate culture, Grau served as senior vice president for development for Aventis, overseeing a $1 billion budget. He then took a post as president of research and development for BSF Pharmaceuticals in College Park, Maryland. Grau founded Lux Biosciences (www.luxbio.com) in early 2005 for the purpose of developing novel medications and delivery methods for the eye.

“As for me,” he says, “I did it partly for the excitement of being on my own, and partly because I feel that smaller biotech firms can be more effective on specific projects.”

There is no doubt, Grau says, that offshoring clinical trials has become a popular trend. Any time that you can cut costs so dramatically for such a huge operations expense, everyone wants in. “But it is a quickly moving target with many tricky considerations that one cannot ignore,” says Grau.

Small versus large. Life science companies of all sizes face fast-rising research and development costs, along with a reduced number of FDA approvals. But Grau says that the smaller biotechs almost always operate much more cost effectively in the research areas. “There is no economy of scale here,” he says. “The large pharmaceutical firms are bogged down with a huge infrastructure, inhibiting both speed and thrift.”

But big companies do possess the ready cash necessary to move operations across an ocean, to rent facilities, and to train foreign staff. A smaller firm may spend more to move clinical trials overseas than it saves.

Patient competition is another consideration. For oncology medications, for example, finding appropriate patients as yet untouched by testing can spark a highly competitive man hunt.

How far offshore? The contract research organizations, which provide patient pools for biotechs, are now looking for trial candidates in India and China. Both countries’ populations are ethnically varied. Transportation and research infrastructure are solid in these countries, and each has large numbers of individuals who are not taking medications that will interfere with the results of clinical trials.

“It is a sad fact,” says Grau, “that in these places there are many people who have never received the medications related to their disease.” This is unfortunate for affected individuals in these countries, but good for drug developers. In contrast, nations like Korea and Singapore, along with countries in Eastern Europe, have the technical infrastructure for trials, but cannot generally be used because so many of their patients are treated for serious diseases.

Both Africa and South America, while rich in qualifying patients, frequently lack the skilled local personnel and transportation structure to make testing attractive. The exceptions are parts of Argentina and South Africa. “However, Africa is definitely the future field of clinical testing,” says Grau.

Ethical issues. The vision of the heartless lab-coated scientist injecting hundreds of trusting native folk with questionable substances has dogged clinical testers for over a century. Many cynical observers point out that skin lotions may be tested on the arms of United States residents, but when it comes to experiments with the heart or eye, researchers turn to people on some distant shore.

Grau abhors any program of testing that involves individuals who are less than completely informed. But he notes that there is another moral obligation more easily overlooked. Experimental clinicians cannot just descend into an area, bring a long-sought-after medicine, heal for six months, and then up and leave. “There must be long term continuation protocols,” he insists. “It goes beyond approval. It is one’s ethical imperative.”

The true ethical rule of thumb is conduct clinical tests in a manner that is above reproach. Regardless of how eager a country may be to cooperate in such testing, and to look the other way on issues of informed consent and treatment of test subjects, Grau says that researchers must take every safety precaution, just as if they were testing their own family. By making such a commitment, the company is opening its doors for international approval later, once FDA approval is obtained.

Not all patients are equal. Finding a suitable patient population goes far beyond getting a clean, unmedicated group. The ethnic differentials are enormous, Grau points out. Africans tend to have a different metabolism than most Asians and North Americans. Japanese people tend to require smaller dosages than most Americans. Remote island people may be too homogeneous to reflect the population of a country like the United States or Great Britain.

Beyond the patients themselves, clinicians need to consider quality controls. Are their enough technical personnel in a new arena to perform the tests and to gather and record the data accurately, and on time? (Hot-wired India is renowned for getting tests back to United States companies while North America sleeps.) Finally, Grau mentions the stability of the national and regional government. “I have seen people actually trying to monitor test sites in a war zone,” he says with a shake of his head.

The contract research organizations continue to grow as an increasing number of medications require testing across the globe. They are making overseas patient pools more attractive to even small companies. But as with any business venture, it is wise to undertake a lot of cost and logistics planning before leaping at a bargain price tag.

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