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Outsourcing goes East

Posted on: 12 Oct 04


The conditions for clinical trials are improving in Japan and this has been a factor in the rapid growth of the country's CRO sector.


Although there remains a large degree of variation in how it is used, it is widely accepted that outsourcing is a useful option for clinical R&D. Clinical development is accounting for an ever-growing portion of the R&D budget and trials are becoming increasingly complex. Maintaining all the functions associated with a clinical development programme and its component projects in-house is a gargantuan task and requires considerable resources and expense. A number of companies have realised that they can successfully bring their drugs to market by using outsourcing as an option rather than running all clinical trials themselves. Several major drugs have reached the market through this approach, which shows that outsourcing as a strategy does not stifle productivity. Consequently, there has been steady growth of the CRO sector and the services that it offers.


Overcoming perceptions in Japan

Most of the attention regarding the CRO industry has focused on its activities in the USA and Europe, but like the pharmaceutical industry it is a sector that is truly international. Although a number of local companies have been attempting to internationalise their work, Japan remains a key centre for R&D (1) and the CRO sector has been growing steadily in the country. Furthermore, a number of multinationals have placed great emphasis on improving their position in the Japanese market and this should see them carrying out more studies in Japan.


One of the reasons that little attention has been paid to Japan in terms of the CRO industry is that it has been considered to be a more difficult area to conduct clinical trials than in the USA and Europe. In fact, it is easier to find industry media coverage of clinical development outsourcing in emerging areas such as Latin America and Asia-Pacific than in Japan.


When running clinical studies, it is essential that trials are run to agreed international standards so that patients are protected and well cared for. As with other countries, there have been some medical controversies in Japan that have not helped to promote a good environment for subjects to participate in clinical research (1). There is still considerable discussion in Japan over issues such as the manner in which informed consent should be sought and on measures to encourage the public to become involved in clinical trials. However, these are issues that are frequently raised elsewhere in the world with regard to the participation of the public in clinical trials and they are not exclusive to Japan (2).


In fact, conditions for clinical trials are improving in Japan and this has been a factor in the growth of the CRO sector. One of the key drivers for these improvements has been the pharmaceutical industry, which has lobbied hard to change the current system (1). The Japan Pharmaceutical Manufacturers Association (JPMA) has been lobbying to increase Japan's international competitiveness in R&D and its Clinical Evaluation Subcommittee specifically focuses on the promotion of clinical research and on issues regarding the outsourcing of trials to CROs. The JPMA's Public Affairs Committee is also running a media campaign to improve public awareness and appreciation of clinical trials. These approaches to improve the R&D environment have been used with success elsewhere in the world and Japan is keen not to be left behind (3, 4)


Growth of the CRO sector in Japan

The Japanese CRO sector became recognised in its own right in the late 1990s, much later than its foreign counterparts. This was a result of the revision of the Good Clinical Practice (GCP) guidelines, which defined their legal status. The emergence of this sector has challenged the traditional way of carrying out all drug development activities in-house. Japanese pharmaceutical companies are increasing their R&D budgets and have been formulating strategies that will enable them to compete with foreign rivals (1). A number of these strategies are very ambitious and necessitate a change in approach, such as the use of outsourcing. According to the Japanese CRO Association (JCROA), 76% of its customers in 2003 were Japan-based (5).


Although it is small when compared to the CRO industry in the USA and Europe, the Japanese CRO sector is showing promising growth. In 2002, the JCROA estimated that its member companies had achieved sales of ¥38.9 billion and that these would grow to ¥56.4 billion by 2004 (5). A prediction of ¥80 billion has been made for the sector for 2005 (5). The increased activity in the sector is also reflected in terms of employment. The JCROA reported that 3,611 people were employed in the CRO sector during 2002 and that this increased to 4,620 employees in 2003 (5). By the end of 2004, the JCROA expected over 5,600 people to be employed in the sector (5).



As with the USA and Europe, the trend towards outsourcing R&D is expected to continue. As more pharmaceutical companies take this route it will serve to expand the overall market. Independent figures suggest that in 1988 only 8.6% of Japan's pharmaceutical R&D expenditure was outsourced, but that by 2008 this figure could be nearly 40% (6). An area that has been highlighted for growth is Phase IV research. In 2003, this accounted for nearly 24% of total sales in the CRO sector, but some Japanese CROs have reported it accounting for over 50% of their revenues (5, 6).


As the conditions for clinical development improve in Japan, CROs will carry out an important role for clients in maximising the potential of a clinical study. With clinical trials, everything from patient availability and recruitment, study centre and investigator suitability, local regulations, market potential, and of course resources, timelines and costs will come into play. The CRO must ensure that none of these factors act as a barrier for progress of the study in Japan. After a relatively slow start, it appears that the CRO sector in Japan is about to take off.



1. Kermani F. (2004). Japanese R&D: Branching Out. Applied Clinical Trials. August.


2. Kermani F. and Bonacossa P. (2003). New Ways to Recruit Trial Subjects. February.


3. Kermani F. (2004). Pharma R&D in Europe: Past, Present and Future. Chiltern International.


4. Kermani F. (2004). Unlocking Asia's Pharmaceutical Potential. Chiltern International.


5. Anon (2003). Annual Report. Japanese CRO Association.


6. Kawakami S. (2002). Drug Tester Bent On Speeding Up Clinical Studies. J@pan Inc. Magazine. April 2002 issue.

Dr Faiz Kermani

Last updated on: 27/08/2010 11:40:18

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