Nearshore Americas

Argentina Bids to Become Latin America’s Pharma Outsourcing Leader

Pharmaceutical companies of all sizes today are conducting a significant portion of their clinical research outside of the U.S. and Western Europe. Clinical research organizations (CROs) began springing up in the 1990s, and a number of major pharmaceutical companies have outsourced aspects of their clinical research for almost two decades.

The CRO industry, however, began to experience rapid growth in 2007 and 2008 as cost and demographic factors practically forced almost all companies involved in drug development to outsource more clinical research of all kinds. The trend toward outsourcing of clinical research has only picked up steam since then, and Morningstar estimates that worldwide revenue for CROs will top $32 billion in 2012. Further growth is expected as 2011’s 11.1 percent increase in industry revenues is expected to be surpassed this year.

One of the major reasons for the rapid growth in the CRO industry over the last few years has been a trend toward closer partnerships (such as Full-Time-Equivalent or FTE partnerships) between CROs and their clients and the development of a “functional service outsourcing” model. Functional service outsourcing means utilizing several CROs that specialize in the various aspects of drug development (patient recruitment, trial management, data analysis, etc.) rather than just hiring a single larger CRO to undertake the whole project.

Argentina has one of the most advanced health care systems in South America with every major city having top quality hospitals and medical laboratories. 

These trends in the industry have opened the doors not just to smaller specialized corporate players, but to new national and regional players as well. India and Eastern Europe have been the main hubs of CRO activity since the industry came into its own, but this new push for closer working relationships and demonstrated high levels of specific subject area expertise has allowed other countries such as Brazil, Argentina, Chile and the Philippines to emerge as CRO destinations.

Argentine CRO Industry Comes Into its Own

Argentina was not well known as a CRO outsourcing destination until just a few years ago, but the combination of a reasonably good health care infrastructure (importantly including national clinical trial standards that are compatible with international norms) and relative ease of patient recruitment has led to rapid growth in the Argentine CRO industry since 2008.

According to a recent report from GBI Research, total revenues for the CRO industry in Argentina came in right at $50 million in 2010, and given that the year-to-year growth rate was over 9%, total industry revenues will likely come close to $60 million in 2012.

Health Care Infrastructure in Argentina

Argentina has one of the most advanced health care systems in South America with every major city having top quality hospitals and medical laboratories. When you add that to the fact that the Argentine government has already set up a series of government-run clinical investigative sites (ANMAT sites) in high-population urban areas, it is easy to see why Argentina is becoming a preferred CRO outsourcing locale.

Relative Ease of Clinical Trial Patient Recruitment in Argentina

One of the biggest reasons that pharma and biotech companies from all across the world are coming to Argentina to do their clinical research is the relative ease of patient recruitment. In the U.S. and Europe large clinical trials can literally take years to recruit the thousands of patients required, meaning that clinical trials can last five years or longer. It is obviously a huge advantage if that same recruitment process can be achieved in just a few months, and companies are finding that this is possible in Argentina.

The number one factor at play here is that a majority of the population does not have health insurance, and in some cases has very limited access to more than basic health care. This means that, unlike in the U.S. or Western Europe, there is a large pool of treatment-naive potential subjects for clinical trials to recruit from in Argentina. The ANMAT sites located in urban areas throughout the country also considerably reduce the overhead for both recruiting and managing clinical trials, further adding to Argentina’s attractiveness as a CRO outsourcing destination.

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A number of multinational CROs such as Activa, Blanchard & Asociados, Charles River Laboratories, Covance Inc., EGCP, Klixar, LatinClin and Quintiles already have operations in Argentina (including many recent mergers and acquisitions of local CROs). These companies provide clinical trial-related services ranging from regulatory consultation to project management and data analysis.

As a final note it should be mentioned that the Argentine government has begun preliminary discussions regarding streamlining the current burdensome trial approval process and even possibly offering companies incentives for conducting clinical trials in Argentina. If some of these initiatives eventually become actual policy, there is the possibility of even more rapid growth in the Argentine CRO industry.

Clayton Browne

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