Clinical Outsourcing to Latin America: First Movers See Strong Upside in Evolving Clinical Sector

Pharmaceutical and biotech companies spend over $20 billion per year outsourcing key elements of clinical development. Processes such as clinical trials management, data management, study statistics, site monitoring and associated IT make clinical outsourcing to Contract Research Organizations (CROs) and Business Process Outsourcing (BPO) service providers big business. Firms have outsourced transactional activities for many years and as the commercial and cost pressures on the life sciences industry continue to increase, so does the scale and pace of outsourcing.

Emerging markets are now the dominant growth area for clinical outsourcing with growth rates to Latin America, India, China and Southeast Asia in excess of 25% per year compared to less than 10% for developed markets. This is pushing significant volumes of increasingly knowledge-intensive clinical work into Nearshore and offshore countries often at lower cost and uncertain (or higher) perceived risk, thereby fundamentally shifting the historical balance of risks and rewards.

Six countries – Brazil, Mexico, Argentina, Chile, Peru and Colombia – account for nearly 90% of clinical research in Latin America, and are running more than 6,400 clinical trials today out of a worldwide total of more than 108,000 trials. Over 75% of these trials are at Phases II and III of Development although the number of Phase I and Phase IV trials is also increasing.

A strong business case can be built for outsourcing clinical activities to Latin America:

• Population concentration in mega cities such as Sao Paolo, Buenos Aires, Bogota and Mexico City − with a combined population of over 73 million – provides good dynamics for patient recruitment and retention.  thus making patient recruitment and clinical trial management less costly than in geographically dispersed countries.
• Latin America provides excellent trial integrity as was found in an FDA audit conducted from 1997-2008, the intent of which was measuring global site performance after the adoption of ICH GCP guidelines in 1996.The FDA recently reported global audit results of clinical investigators, Sponsors, and IRBs to check compliance with the guidelines, and to provide assurance that the data submitted to the FDA is substantiated by appropriate records. Latin America scored on par or better for following the investigational plan, record keeping, drug accountability, and IRB compliance. The findings provide a high level of confidence in patient safety and quality.
• Governments and regulators are motivated and are improving regulatory submission and approval timescales, thereby shortening study start-up timelines. An increased focus on ethical guidelines supporting patient protection has also been established, as illustrated by Argentina’s announcement of a new central clinical trial registry to track and coordinate all trials conducted there.
• Highly motivated patients. There are strong local physician/patient relationships which provide a benign environment for recruiting patients and a high patient retention factor for clinical trials. Patient mobility is relatively low which is important for long-term trials. In addition, where the incidence of patient health insurance is quite low, recruits typically can expect to receive a standard of care higher than most of their peers by entering a clinical trial.
• Development timelines are shortening. In particular, Colombia, Argentina and Mexico have shorter study start up times than the global average and timelines in Brazil continue to improve following new ANVISA changes.
• Common language – language is a usual consideration when planning global and multi-national trials, and one of the remaining challenges is the need for extensive translations. In Latin America the two primary languages spoken are Spanish and Portuguese.

Although the benefits are great, several key challenges and risks remain:

• Approval cycles still need to be improved – progress is being made but approval cycles in Brazil in particular are still significantly higher than the global average.
• Extensive documentation requirements – the need for extensive upfront documentation to meet regulatory requirements is significant and can often be under-estimated.
• Outsourcing and Nearshoring governance and oversight is not as strategic or as structured as it needs to be – this can result in increased costs and reduced benefits especially where poor deals are implemented or where service providers not proactively managed. As Outsourcing deals become larger and more complex, with increased vendor/CRO consolidation, there is an increased need for improved governance and oversight.
• Insufficient communication with sponsors – a common problem where many sponsors are not used to communicating with local sites, investigators and CROs.
• Frequent and unpredicted changes in requirements – a challenge where the study requirements are poorly defined upfront.
• Alternatives to clinical outsourcing in Latin America may offer a different risk/reward profile – a challenge when a firm does not have a well-defined global portfolio strategy. How should the sponsor allocate scarce resources between established and emerging markets?
• Change management challenges arising from the increased use of emerging markets vs. established markets where historically the vast majority of clinical outsourcing has taken place.

The key success factors for outsourcing and/or Nearshoring clinical activities to Latin America include the following:

• Use local experienced personnel – whether these are in-house employees or outsourced through a reliable and competent CRO. When using a global CRO, it is important to establish its local credentials in particular markets, especially when a global CRO is using sub-contracted local CROs to provide local expertise. Regulatory standards and regulatory bodies can be best navigated with local parties who understand the approval guidelines and standards.
• Create and maintain strong, effective and open communication channels as needed with all stakeholders ethics committees, regulators, sponsors, CROs and other providers, sites, study teams, investigators, physicians and of course patients.
• Optimize procedures to counterbalance for uncontrolled external steps, especially timescales, for translation times, dossier preparation and response time to questions.
• Increase the maturity of the outsourcing and Nearshoring governance and oversight process through increased standardization, automation and use of appropriate tools.
• Involve investigators in the approval process.
• Know where to get the required project documentation, if needed.
• Be prepared for delays, prepare contingency plans, and communicate the plans in advance.
• Develop the talent and professionalism of the management organization that is retained to manage the end-to-end process. If people with the right skills and competencies are in place, using the most appropriate outcome-focused performance measures, the best outcomes will be achieved.
• Build a culture of continuous improvement and open innovation that extends from the Sponsor to all CROs, sites, investigators and other stakeholders.

In summary, clinical outsourcing to Latin America will continue to increase as the business case becomes more compelling. Choosing the best strategy and implementing it effectively and efficiently will continue to challenge many organizations over the next few years.

Chris Nuttall is a Member of the Management Group of PA Consulting and an expert in Shared Services and Outsourcing, based in New York.  Silvio Klimovsky is the Head of Clinical Research and Operations for Pfizer Inc. based in Buenos Aires, Argentina.

The opinions and choice of data presented in this article do not represent those of PA Consulting, Inc. and/or Pfizer Inc.