Staying clinically competitive

Cost-competitiveness, high-quality data and fast study start-up times are some of the key factors that make Australia an attractive market for clinical trials. But as other countries strive to improve their clinical competitiveness, can Australia hold a dominant position?

Over 1300 new trials are started in Australia each year and the industry supports over 7000 jobs, according to MTPConnect CEO Sue MacLeman, who is a strong believer in the Australian clinical trials industry. “Our story is strong, we just need to communicate it more effectively,” MacLeman said.

MTPConnect is a not-for-profit organisation focused on accelerating the rate of growth of the medical technologies, biotechnologies and pharmaceuticals sector to achieve greater commercialisation and establish Australia as an Asia–Pacific hub for medical technology and pharmaceutical companies. MTPConnect has recently completed an in-depth analysis of Australian clinical trial activity that demonstrates the significance of the local industry on the world stage. The findings are expected to be released in June.

Among other conclusions, the analysis found that out of all the new clinical trials that start in Australia each year, over half are focused on the development and testing of new drugs and medical devices, and the remainder on improving the delivery of quality healthcare, MacLeman said.

“Australia ranks 10th in the world for the total number of new trials per year (based on trials captured in the clinicaltrials.gov database), in terms of the globally competitive market for commercially sponsored drug and device trials,” MacLeman said.

Early-phase trials

“Relative to its international peers, Australia has a high proportion of trials in complex therapeutic areas including oncology, respiratory medicine and infectious diseases. Amongst trials that follow the typical four-phase system for pharmaceutical development, Australia attracts a larger proportion of the more complex Phase 1 trials than many of its international peers,”  MacLeman said. 

“Australia’s Phase I specialised service providers (including companies such as CMAX, Linear, Bellberry) and sites (such as Prince of Wales, Nucleus Network) are highly regarded in terms of their quality and speed of delivery, supported by streamlined processes and private ethics committees. This has attracted inbound investment and activity specifically from small and medium-sized entities in the Asia–Pacific region.”

In 2016, clinical research firm Novotech conducted a cost comparison study for phase 1 trials in the US and Australia. They found that Australia is 28% cheaper than the US before tax incentives and 60% cheaper after tax incentives. These statistics may change if US House passes the Bill to offer further tax credits to clinical research organisations. Currently, if a pharmaceutical company in the US does all its research in-house it can claim 100% tax credit, but if it outsources research work to another firm, it can only claim 65% credit. The Bill, if passed, would enable CROs to claim a portion of tax credit.

R&D tax incentive

Research and development tax incentive is clearly one of the major attractions for conducting clinical trials in Australia. “Commercial trial sponsors place significant value on the R&D tax incentive that provides tax relief for eligible R&D activities as a key driver of attracting trials to Australia. This is particularly a factor for smaller and medium-sized entities and their early-phase studies,”  MacLeman said.

There has been significant uncertainty regarding the future of the R&D tax incentive in Australia, which has damaged industry confidence. Australian industry body AusBiotech’s annual survey of biotechnology industry CEOs, released in May 2017, reflected this sentiment. According to the report, around 72% of respondents described the past year as an ‘excellent’ or ‘good’ year, but the “optimism was overshadowed with concern surrounding the R&D Tax Incentive”.

The R&D Tax Incentive, start-up times through CTN (Clinical Trial Notification scheme) and Australian dollar make Australia cost-competitive, according to MacLeman. When asked about Australia’s cost-competitiveness compared to markets such as Japan, India and the US, MacLeman said, “Australia is approximately 60% more cost-effective than US due to CTN , R&D tax and AUD. India is cheaper due to labour costs but offset by quality and the ability to do complex studies utilising world-class infrastructure. For Japan we are more cost-effective due to start-up times, R&D tax incentives and AUD, but also offer a diversity of population that Japan does not have.”

Industry outlook

In May, Health Minister Greg Hunt announced a $33 million funding boost in medical research. Through the Medical Research Future Fund (MRFF), $13 million will be used to support research into a number of public health areas which contribute to the highest burden of disease, including the application of precision medicine. The Australian Clinical Trials Alliance received $5 million to support their work in ensuring Australia maintains its world-leading clinical trial standards and continues to support the clinical trials sector. The MRFF will inject $8 million to support the next generation of Australian researchers — including a major boost to the number of National Health and Medical Research Council fellowship schemes. The government will also provide $7 million over four years to help redesign state and territory clinical trial operating systems.

The government also restructured The National Health and Medical Research Council grant program to ensure it continues to support the best Australian health and medical research and researchers. A restructured grant funding program will be implemented in late 2018–early 2019, for peer review during 2019 and funding in 2020. A separate clinical trials and cohort studies scheme was announced to allow NHMRC to be more flexible and responsive to the needs of investigators and the studies they are conducting. It will make it possible to establish appropriate scheme-specific requirements and to introduce assessment criteria that are more suited to determining the relevance of the question, the appropriateness of the design and the feasibility of clinical trials and cohort studies.

Australia — an Asia–Pacific hub?

According to MacLeman, some of the key factors that contribute to Australia’s competitive advantage include the quality of research and data, an attractive regulatory framework, infrastructure and speed of delivery in phase 1, diversity of the patient pool (ie, patient genotypes), availability of value-adding services such as biobanks, a comparable and high standard of care that allows extrapolation of results and favourable regulatory recognition by the US Food and Drug Administration (FDA).

“Australia has a strong reputation for the quality of its investigators. Key opinion leaders are also considered to be a major driver of Australia’s comparative advantage in certain therapeutic areas such as oncology,” MacLeman said.  

Global contract research firm Novotech’s CEO Dr John Moller agrees that “Australia remains a highly attractive market for clinical trials, and we continue to see strong demand from international clients wanting to conduct trials here. Australia will always be limited by its population, which can make it more challenging to recruit in some studies where there are competing trials or a small patient pool.”

Australia always needs to focus on maintaining its competitive strengths as a number of countries in the region have made progress in clinical trial priority areas for economic and social development, Moller added. 

“In particular, Australia needs to continue to ensure that our approval and start-up processes are the best in the world, and progress around areas such as harmonising site governance issues will be important. An example is the delay that sites may take when interpreting risks around insurance coverage, and if a standardised approach is taken it will reduce the variability that we sometimes see in start-up times. We do see some innovative things happening in Australia in the patient recruitment area and Novotech is doing some interesting work around analysis interrogation of clinical data sets to identify patients faster and at lower cost,” he said.

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