The details are contained in two recent publications on clinical trials activity. The June 2017 MTPConnect report titled ‘The Economic Profile and Competitive Advantage of the Sector’ is data rich and was developed with extensive input from the industry and Government. The document provides a status update and suggestions on how to further stimulate the sector. In January, Austrade issued a Clinical Trials Capability Report ‘A Dynamic Environment for Clinical Trials’, essentially a pitch to clients requiring clinical research of therapeutic products and medical devices. It highlights the range of expertise available in Australia, from cell culture and engineering to Independent Ethics Committees, by showcasing local companies and providing a directory of suppliers.
This becomes important when put in the context that approximately 75% of the direct expenditure on clinical trials in 2015 in Australia came from international inbound investment by commercial entities (pharmaceutical, biotechnology and medical device companies). Another statistic included in the Austrade report that requires consideration is that ‘medicines and vaccines are Australia’s largest manufactured export. China and the United States are the biggest markets, followed by New Zealand, South Korea and the United Kingdom.’
As Figure 1 demonstrates, multiple factors contribute to clinical trial placement. When considering the shift over time in the type of clinical trials being conducted in Australia, the influence of a number of these factors is obvious. Previously, Phase III studies were the largest component of activity, however Phase I trials numbers have increased steadily, growing 17.2 % from 2012–2015, compared with 1.8 % globally over the same period. This is a reflection of the strong competitive position of Australia in conducting complex studies as a result of our world-class healthcare system, high quality medical research infrastructure, skilled workforce of scientists and healthcare professionals, including internationally regarded clinicians.
At the same time, the later phase, higher patient number studies have been increasingly placed in more populous locations in the Asia Pacific, Eastern Europe or Latin America, as the larger patient pools shorten recruitment times, and ultimately, the time to market of new products. Additionally, Australia’s population size and distribution mean that more investigational sites must be established to reach target recruitments when studies are placed in Australia, resulting in a higher per patient cost than other countries. Significant efforts have been undertaken on a number of fronts over the past decade to increase recruitment efficiencies. These include the streamlining of ethic approval processes via mutual recognition and increased public awareness. In 2015, of the 1,305 industry-sponsored studies in Australia, Phase III accounted for 40%; Phase II, 22%; Phase I, 18%; Phase IV, 4% and Other, the remaining 16%.
Figure 1 Factors considered when selecting countries in which to conduct a clinical study
Investigational site governance continues to be an issue that negatively impacts Australian’s overall competitiveness. At present, sponsors must negotiate indemnity contracts individually with each study site, adding to the administrative burden and time required to initiate the study.
In terms of strengths, Australia’s stable business operating environment is currently ranked 14th out of 190 countries by the World Bank in terms of ease of doing business. The fast, streamlined regulatory pathway to conduct clinical trials via the TGA Clinical Trial Notification (CTN) system continues to be the envy of many countries. Harmonised ethics review processes and availability of Ethics Committees in both the private and public sectors, provide opportunities to speed up approvals. Australia’s strong intellectual property system which, in 2017 was ranked 10th globally, in terms of security (out of 127). Finally, research & development tax incentives for clinical trials mean that for the same early phase study, Australia is up to 28 % cheaper than the US before-tax incentives, and 60% after-tax.
The 2014-15 Federal Budget established a Medical Research Future Fund (MRFF) to be an ongoing source of funding to support medical research projects and infrastructure in Australia (the Government currently spends around AU$3 billion annually). By 2020-21, the MRFF is expected to have a balance of AU$20 billion, the net earnings from which will produce a permanent source of revenue. In 2016, a Biomedical Translation Fund (BTF) was created to complement the MRFF via commercialisation of health research.
Clearly, the strength of the sector today is in no small way due to the ongoing commitment and support of successive Australian Governments. As Figure 2 illustrates this has, and will continue to, deliver enormous value to our nation and should be acknowledged.
Figure 2 The value of clinical trials in Australia
ABOUT THE AUTHOR
Nick Campbell is the Chairman of Nexus Asia Pacific and has previously worked in the MedTech and pharmaceutical industries.