How are new drugs discovered?

Developing a new medicine begins with understanding the disease or condition as thoroughly as possible. Basic research provides clues about how to treat diseases and potential ways to target the symptoms or underlying causes. Researchers work to understand biological targets of the drug they want to develop which can be protein, RNA, DNA, and other molecule that is related to the disease. The researcher work to discover a lead compound which is a promising molecule that could influence target and has a potential to be developed into a medicine.

- Understand disease mechanisms.
- Conduct basic research to obtain clues and treatment options.
- Understand the biological targets of drugs.
- Develop a drug from a lead compound, a molecule that will affect biological targets and there is a possibility that it will develop into a drug.

Pharmaceutical industry: Building Economy and Health

Executive Summary

The clinical research industry represents a significant source of healthcare innovation and economic prosperity for countries. As a primary gateway into Asia and a central player in the region, Thailand is an emerging provider of clinical trials. World-class infrastructure, a universal healthcare system, and national policies that support a developing clinical research industry make Thailand well positioned to pursue further growth in the clinical research industry.

The current status of the industry suggests that these underlying benefits for conducting clinical research in Thailand have not been fully realized and that other countries in the region, such as South Korea and Taiwan, have been able to more successfully attract clinical trials. Over the 2010-2015 period, over 4,000 clinical trials commenced in South Korea, around 2,000 in Taiwan but fewer than 1,000 (967) in Thailand.

The Pharmaceutical Research and Manufacturers Association (PReMA) in Thailand commissioned Deloitte Access Economics to provide a detailed and objective analysis of the economic and health related benefits of clinical research in Thailand. The team adopted a mixed methods approach to the study which comprised a survey, interviews and desktop analysis.

Purpose of the study

Methodology

The survey of PReMA members, clinical research organizations and universities ascertained trial employment and cost data, the number of local participants and sites, and challenges and opportunities for Thailand based clinical research. Face to face stakeholder interviews were performed to further explore survey findings and collect qualitative information. Desktop research and analysis sought to complement, triangulate and fill gaps. Sources referenced included clinical trial databases (clinicaltrials.gov, Thai Clinical Trials Registry)¹, government departments (Ministry of Public Health, Office of the National Economic and Social Development Board) and published papers.

Outcomes of consultations contributed to aStrengths Weaknesses Opportunities and Threats(SWOT) analysis and the development of policy recommendations.

This occurred in tandem with economic analyses. The costs and benefits investigated were:

Direct and indirect economic contribution This is broadly equivalent to the addition to Thailand’s gross domestic product (GDP) made by both the organization which conduct clinical trials and by the businesses which supply goods and services to those organizations. For example, if a pharmaceutical company engages a contract research organization (CRO), the value added includes not only the profits earned by the CRO, but also those made by the electricity utility, medical equipment makers and data storage companies from supplying the goods and services used in the trial.
Economic value of medicines produced Companies pay for trials in the hope that, eventually, this will result in new medicines coming to the market. Clinical trials are long and expensive, and most of them do not result in new medicines. For those that do, there are often lengthy public approvals processes, followed by only a limited period under patent protection to try to recoup development costs. This report estimates the long-term economic value of medicines produced as a result of clinical trials conducted in Thailand in 2015.
Health benefits Most long run improvements in health are due to better medicines and medical devices. These in turn are the result of medical research, most of which is in the form of clinical trials. While most of these benefits accruing to the Thai population will be from international trials, some will also be due to trials conducted in Thailand. This report uses standard techniques to assign a financial value to the years of healthy life so gained in Thailand.

These benefits are compared to the costs of conducting clinical trials in Thailand in 2015 using a cost benefit analysis framework.

Results

The SWOT analysis found the most important factors for attracting foreign clinical trial investment to Thailand are the large treatment-naïve patient population and the highly skilled workforce. The lengthiness of the independent ethical approval process and the import license approval process were considered the biggest impediments to increased foreign investment in clinical research.

SWOT analysis for clinical trials in Thailand

Thailand as a clinical trials provider

Thailand is well equipped to be a strong contender in the international clinical research market.

Number of clinical trials commenced in Thailand, by year and phase

Based on Deloitte Access Economics analysis, it is estimated that฿10.4 billion (USD 0.32 billion) was spent on clinical trials in Thailand in 2015. Of this, the majority, or 75% (฿7.8 billion, USD 0.24 billion) was on Phase 3 research. Phase 1 has the lowest cost (around 3% of total trial costs).

There were over 111,000 Thai trial participants in 2015 and approximately 38% of clinical trials in Thailand had pharmaceutical companies as sponsors. It is estimated that expenditure on trials sponsored by private industry was ฿3.94 billion (USD 0.12 billion).

In 2015, there were an estimated 8,905 full time equivalents (FTEs) directly employed in clinical trials in Thailand, who were paid approximately ฿4.9 billion (USD 0.15 billion). Additionally,6,604 FTEs were employed in industries related to the clinical research sector. These include upstream industries such as: post and telecommunication; pulp, paper and cardboard; and electricity.²

Clinical trials contributed approximately ฿8.8 billion³ (USD 0.27 billion) to Thailand’s GDP in 2015which represents approximately 0.05% of Thailand’s GDP for 2015. Of this, ฿2.0 billion (USD 0.06 billion) resulted from contributions to upstream industries.

Economic impact

Clinical trials conducted in 2015 are estimated to result in profits from future medicine sales sufficient to generate a 4.2% rate of return, in net present values. That is, future return will be 104.2% of current total trial costs (including successful and unsuccessful trials). Clinical trials conducted in Thailand in 2015 are expected to resultin net economic return of medicines produced of ฿436 million (USD 13.4 million).

Impact on the Thai population

Medical research also significantly improves the morbidity and mortality of a country, accounting for roughly half of the annual reduction in the burden of disease and injury. Using World Health Organization data, it is estimated that 3.01 million disability adjusted life years (DALYs) averted in Thailand in 2015 can be attributed to worldwide medical research. Given clinical research accounts for 75% of all medical research, 2.26 million DALYs per year were saved due to worldwide clinical trials. The DALY reduction that arose from Thailand based research equated to 8,326 DALYs. The dollar value of wellbeing gains attributable to local clinical research can also be estimated using the market-based value of a year of healthy life for Thailand (฿1.8 million, USD 0.06 million)). The net present value of expected health benefits arising from clinical research conducted in Thailand in 2015 is ฿10.5 billion (USD 0.32 billion).

Health benefits

All costs and benefits arising from clinical research in Thailand in 2015 were compiled and compared through a cost benefit analysis. Compare to total costs of ฿10.4 billion, total benefits sum to ฿30.0 billion (USD 0.9 billion), with a benefit-cost ratio of 2.9:1.This means that for every ฿1 spent on clinical trials in Thailand in 2015, the return was ฿2.9.

Cost-benefit analysis table

Policy recommendations

During consultations, key stakeholders considered that the main reason Thailand had been obtaining a decreasing share of regional multinational trials was the need for regulatory reform. In particular, Thailand needs to reduce regulatory review and approval timelines. Participants were universally willing to pay higher registration fees to achieve this outcome. There is also a pressing need for more accredited trial sites in the rural areas which are home to large treatment-naïve populations, one of Thailand’s key advantages.

Based on the experiences of Taiwan, Korea and Singapore after they streamlined their regulatory processes, Deloitte believes it should be possible for Thailand to achieve similar growth rates in numbers of multinational trials as its regional competitors. Some five years after reforming their clinical trials regulations, each of these countries were receiving around twice as many international trials as they had had five years before the reforms. Similarly Thailand’s competitors (those nations plus Vietnam, Malaysia, Cambodia, and the Philippines) have experienced combined average growth rates in international trials around one third higher than Thailand has over the five years to 2015.If Thailand streamlined its regulatory processes, like its competitors, it should be feasible to increase total trials in Thailand by around 20%, with an attendant increase of some ฿3.9 billion (USD 0.1 billion) annually in net benefits.

Overall, Thailand is in a good position for fostering new growth in the market for clinical trials and clinical research. However, the current status of the industry suggests that the underlying benefits for conducting clinical research in Thailand are not being fully realized. In order to realize these benefits, it is recommended that Thailand:

1. Address regulatory efficiencies to make Thailand more competitive.

i) Increase number regulators and capacity building programs with international partners.
ii) Centralize IRB and approval Boards.
iii) Eliminate customs tariff for medicines used in Clinical Trials.
iv) Increase the number of accredited trial sites and skilled workers, particularly in rural areas.

2. Prioritize innovation enhancement policies that promote clinical research.

i) R&D and innovation policies adopted and coordinate intra-ministerially among MOPH MoST MoE, and MoC.
ii) Increase promotion of clinical trial capacity of Thailand domestically and overseas.
iii) Development of annual clinical research in biopharmaceutical index to measure progress.

3. Implement sustained reforms by creating an inclusive multidisciplinary National Clinical Research Task Force to establish a detailed roadmap for the clinical research development in Thailand.

As shown by Wong (2011)4, implementation of such recommendations can bring about marked increases in clinical trial activities, particularly in the early stage clinical trials and R&D where opportunities to value add are greatest.

Pharma By Number

PHARMA BY NUMBER

Industry spend 141.6 Billion USD on R&D per year
Drug Development for Particular Disease
- o Cancer 1,813
- o Diabetes 475
- o HIV/AIDS 159
- o Cardiovascular 559
5 of the 10 Leading global R&D firms were Research – Base Biopharmaceutical companies
Annual Spending by the Biopharmaceutical: Industry is 5 times greater than the Defense & Aerospace Industries

PHARMA & GLOBAL HEALTH BETWEEN 2000-2008

VACCINE HELPED REDUCE NUMBER OF MEASLES DEATH IN AFRICA BY 92%
IN 2014 IFPMA MEMBERS HAD 186 ONGOING R&D PROJECTS REGARDING DISEASES OF THE DEVELOPING WORLD
88% R&D projects for NTDs are in partnerships between IFPMA members companies and +80 partners from universities, public and private sector, and NGOs
We are 3 largest global funder in NTDs research
Our investments in NTD research reached USD 401.2 million in 2013
8 R&D centers are dedicated solely to searching for new cures for NTDs
500 million immunized since 2000

PHARMA ECONOMIC FOOTPRINT

Biopharmaceutical market will reach 1.3 trillion by 2018
In 2012, Biopharmaceutical industry added USD 436.8 Billion to the world GDP similar to the economy of a country like Argentina
The Global biopharmaceutical industry (including Generic) employed over 4.4 million and paid USD 91.3 Billion in salaries
Global Health Partnerships IFPMA members have a strong track record in building strategic alliances for global health

Clinical Research Impact Study of Thailand

Regulatory Harmonization is beneficial for both the government that has a role in monitoring pharmaceutical products and pharmaceutical industry and consumer protection as previously mentioned in the drug quality articles that various ICH guidelines were first published in 2000 by academic working group consisting of experts from the government and private sector with an intention to reduce the gap between regulation and guideline to report and evaluate safety information, quality and efficacy of new drugs. This difference leads to an overlapping experimental process that is both time consuming and costly. As a result, this process delays patient access to new drugs that are more effective.

ICH process is to improve the regulatory process to be more effective, prevent the overlapping works during clinical research, and limit the animal testing to the minimum level while maintaining drug safety and efficacy. Hence, the process effectively makes use of resources. Moreover, the regulatory harmonization helps patients to gain access to high-quality drugs faster. The ICH standard is also recognized that it will give health benefits to the world population in an international standard.