Growth of Clinical Trial Market in Russia
The growth of Russian CRO Market began back in 1993 with leading pharmaceutical companies starting investing in the country and helping to develop a reliable, highly competitive infrastructure for clinical studies.
The first steps were so challenging – in terms of regulation, logistics, adherence to international standards, and research instruments – that only big international pharma managed to overcome them, paving the way for both global and local companies. Today CROs can enjoy reliable logistics that allows to deliver samples and specimens worldwide within 24–72 hours, acceptance of ICH-GCP standards, use of IVRS and EDC systems as well as any other medical research instrument and practice used by top CROs of the world.
Operating in Russia in 2008 were about 55 contract research organizations according to ACTO (Association of Clinical Trials Organizations). And this number has been growing annually by up to 5 new companies – local as well as recognizable international CROs.
In 2008, the Russian CRO market’s annual volume was an estimated $150 to $300 million, with CRO services catering to all areas of drug development. More than half of this volume was divided among several top players like Quintiles, Parexel, PSI Co Ltd, Icon, and others. Today operating on the Russian market of clinical studies are three major groups of contract research organizations: international, joint venture and local.
The greater part of companies on the Russian CRO market is affiliates of recognizable top CROs operating worldwide. They established themselves on the Russian market by implementing one of the following three scenarios.
- The company opens a wholly owned subsidiary on rented premises in Russia after having conducted a few clinical trials via subcontractors or from its other offices worldwide. The company hires and trains its personnel – clinical study professionals as well as back-office staff. While costly and extremely time consuming, this way ensures high quality of work along with compliance with the company’s corporate norms and rules. Some of the global companies that opted for this scenario are Quintiles (with its office being opened in Moscow in 1997), PRA (2003), Icon (2003), and PharmaNet (2004).
- The international company gets immediate local presence through buying an already established business from a local or another international contract research organization. The downside of this scenario is the possibility of culture, technology and process integration difficulties. Some of the companies that opted for this scenario are Parexel, Kendle, and AAlPharma.
- The global CRO spends no money on establishing local operations, choosing instead to work through local subcontractors. While eliminating investment risk, this scenario takes thorough selection of the right local partner. This approach was preferred by MDS and PPD.
Connecting all key local transportation routes, Moscow is the most popular location for launching the first office in Russia. It is followed by St. Petersburg that is convenient for monitoring northwestern region of the country. Novosibirsk is a great location for the third office, allowing for convenient monitoring of sites in the Urals and Siberian regions.
Joint Venture CROs
This form of CROs began gaining popularity on the Russian market later than others. Nevertheless, these companies have been demonstrating high professionalism and versatility, offering an array of high-quality services provided at competitive prices.
Launched by both local and foreign capital, on the Russian market they are represented by local researchers in international clinical studies or by local research institutions. Gaining familiarity and experience in medical contract research, some of them choose to start a CRO business of their own.
An example of a joint venture CRO headquartered in Russia (St. Petersburg) is PSI, founded in 1995.
Launched with the use of local capital (often personal savings of founders), local contract research organizations are often founded by former employees of CROs and pharma companies. This type of Russian CROs is steadily growing in number, accounting for over 20% of the total CRO number in the country. Not all of the newly launched companies manage to survive. Some of them can go out of business during the first year and a half, and a certain part of them gets acquired by larger companies.
Local CROs offer competitive prices (depending on the company’s services and size) and have a very wide geography of office locations (Moscow, St. Petersburg, Yekaterinburg, Smolensk, and Novosibirsk). For providing the wide range of services they offer, these companies can use own resources as well as international outsourcing. If two decades ago local CROs were considered generally as a source for clinical study associates, today, the steadily growing number of contracts with sponsors from worldwide tells about the high quality of services provided by local contract organizations. They are entrusted to conduct worldwide trials, including data and project management, biostatistics and data management.
Atlant Clinical was founded in 2007 as a local CRO and during the last 10 years it grew to international CRO with offices in the UK, Germany, Lithuania, Ukraine, Russia and the US.
Read Part II for more detail regarding research quality, personnel, resources and regulations in Russia.