Betting big on CDM
With a strong IT base and a booming clinical research industry
India is proving to be a good destination for Clinical Data Management (CDM)
outsourcing. Arshiya Khan analyses the trends and the outsourcing models
Clinical Data Management (CDM) industry is the fastest growing and possibly
the most profitable segment of the bio services industry. During 2006-07, it
grew to $40 million, a growth of 53 percent over the previous year. The outsourcing
of MNC clinical trials to India is a prime growth driver for this market, though
they are a few large dedicated CDM companies of Indian origin as well. The Indian
clinical trials market in 2006 was $140 million and has been growing at a Compounded
Annual Growth Rate (CAGR) of 40 percent for the last three years. At this rate,
it is likely to scale up to $600 million by 2010. Correspondingly, CDM market
is expected to ramp up to $150 million by the same time, as per an October 2007
report by Cygnus Business Consulting and Research.
Trends, evolution and the outsourcing boom
Earlier, CDM was considered an integral part of clinical development and was
typically an activity performed by in-house teams in global pharma companies.
With the maturing of the IT and Business Process Outsourcing (BPO) process management,
and the volume of CDM work increasing, as well as with the introduction of customised
software for CDM, a number of companies started outsourcing this to Clinical
Research Organisations (CROs) and more recently to IT companies based in India.
India's entry into the CDM space began with Accenture being
chosen as Wyeth's partner for all its data management requirements. Later there
were companies like Eli Lilly and Pfizer who brought their CDM work to India,
with both working with a CRO and an IT partner. They probably saw greater value
in outsourcing more transactional work to IT companies and work that required
a high degree of scientific insight to CROs. Prior to this, India was only doing
medical transcription for the West which was not value added work. "But
this has changed as most MNCs now regularly outsource CDM related work to India
and have even developed India centres for CDM, pharmacovigilance and medical
writing," avers Dr Ramananda S Nadig, President and Deputy Dean, Clinical
Research Education and Management Academy (CREMA).
The spending of pharma companies in CDM runs into millions of dollars. Typically,
data management costs account for 20-35 percent of the total cost of a clinical
trial. Similarly, according to various reports about CDM and biostatistics,
there have been over $8-10 million deals per year from Big Pharma companies.
Major work for CDM comes usually in phase III trails. For international trials,
phase II cost usually ranges from $200 to $350 million and CDM would get budgeted
between five to 15 percent of this total.
MNCs now regularly outsource CDM related work to India and have even developed
India centres for CDM, pharmacovigilance and medical writing"
- Dr Ramananda S Nadig
President and Deputy Dean
Clinical Research Education and Management Academy (CREMA)
future, only those players who can overcome the challenges of understanding
and managing regulatory compliance needs, cost pressures and ensure high
service quality will survive and thrive in this space"
- J Sairamkumar
Life Sciences, Cognizant
CDM is highly technology-driven and needs the use of IT systems,
hence pharma companies outsource it to BPOs and IT companies. "And India,
with its huge clinical and medical talent, is increasingly being looked at as
'the' strategic offshoring destination for services related to clinical research,"
avers J Sairamkumar, Practice Leader, Life Sciences, Cognizant. This is borne
out by the fact that today almost 82 percent of US companies rank India as their
first choice for IT outsourcing destination
Another contributing factor for outsourcing is that to India it gives clients
a cost benefit of 65 percent, so they are likely to outsource more to India.
Chetan Tamhankar, CEO, SiroClinpharm, highlights yet another reason. Drug development
process is highly uncertain and there are cycles of peak and troughs. In this
scenario, it makes sense for pharma/biotech companies to keep only a minimal
staff on their rolls and use outsourced help during periods of peak workload.
The best example of this is Accenture's tie up with Wyeth and Eisai, Cognizant
with Astra Zeneca and Pfizer, TCS with GSK Pharma and Eli Lilly, Pfizer's tie-up
with SiroClinpharm for all its data management services, TCS provides data management
support for Asian Clinical Trials and Neeman's JV with Sinetesi, INC.
Besides following GCP and information security policies,
there are no major regulatory requirements for CDM in India. And this is an
added advantage according to Koteshwar Govind, Deputy Manager, Max Neeman International.
He remarks, "The (US) Food and Drug Administration (FDA) is accepting data
from Indian clinical trials and data management. Secondly, the MNCs are more
than willing to outsource their needs to India because of it's technological
innovation, creditable quality, operational flexibility, cost effectiveness,
time-to-market and competitive advantage."
Even beyond the talent pool, service providers such as Cognizant
have added significant business value to sponsors in terms of enhanced quality
of work, innovation and standardised global processes. These factors will help
fuel the growth of CDM and related services in India, adds Sairamkumar.
Getting back to Cygnus' report for CDM, there are over 70 companies in India
offering services in this niche area. Most of them find it a logical extension
of their other bio-services business. These include CROs, clinical trial organisations,
IT services companies and hospitals. There is a mix of players who are involved
in CDM. For mid-sized and smaller clients, companies like SiroClinpharm, Reliance,
MakroCare, Acunova have good software infrastructure and process management
in place. CROs like Quintiles, Kendle, Neeman, and Asian Clinical Trials are
also involved in CDM.
On the IT front, BPO divisions of Accenture and Cognizant, Tata Consultancy
Services' (TCS) BPO, Satyam BPO, Wipro and IBM are the top level players that
are handling some mega deals in this sector, and are betting big on CDM. They
have been working with top global pharma companies for over four to five years
now and have gained a fair degree of maturity to handle large scale and complex
data management projects. Few other companies are also making inroads into this
sector. Besides, there are also medical transcription players who are getting
a major chunk of work.
Outsourcing business models
India is emerging as an IT superpower and a clinical research hub. This has
resulted in a higher-than-expected growth of clinical research-related services
in India, including CDM. The Indian IT industry is rapidly moving away from
cost as its differentiator and is building competencies to tackle client requirements
much higher up in the value chain. This, coupled with the high speed and quality
of service, has catalysed a spurt in outsourcing in domain intensive areas like
CDM. Quality and fast response are the new buzzwords to dominate business processes
which ensure accurate, reliable services to the customers and an efficient business
model will certainly help.
There are three main modelsthe individual project outsourcing model, the
Full Time Equivalent (FTE) model and the functional service provider model.
Companies like SIRO that have an operational base in data management in India
and Europe are able to work on hybrid models that provide the advantage of the
best expertise from Europe coupled with scale from India to provide high quality,
optimal cost solutions.
Big CROs offer their Indian counterparts to use their global server, software
and other infrastructure with addition of user licenses to extend their data
management business. Hence, they can save costs on some hardware and software
to start the data management business.
In the FTE model, pharma companies outsource the job of developing the facility,
offices and human resources (FTEs) to a service provider, who could be a CRO
or an IT company with the understanding of the clinical trial data management
and biostatistics business. The human resources in this case could be statistical
programmers, statisticians, data viewers, DB designers and medical writers.
In the functional service provider model, pharma companies provide the hardware,
software and arrange for their installation and training. This model is essentially
an extension of the contract staffing model as the service-provider provides
both the office and manpower. The vendor will act as a Functional Service Provider
(FSP) on project/protocol basis after certain pre-decided years.
are more than willing to outsource their needs to India because of it's
technological innovation, creditable quality, operational flexibility, cost
effectiveness, time-to-market and competitive advantage"
- Koteshwar Govind
Max Neeman International
the current scenario, it makes sense for pharma/biotech companies to keep
only a minimal staff on their rolls and use outsourced help during periods
of peak workload
- Chetan Tamhankar
Some great advancements in CDM in India include quality of
results in limited time as well as reduction in use of paper. Until now, India
has witnessed different types of players venture into the CDM area. Some of
them are full- fledged CROs starting to hive off data management units into
independent offshore CDM hubs, while some of them are IT/ITES companies that
leverage mature software processes, technology expertise, the ability to scale
and domain knowledge to provide data management solutions, and yet others are
pharma companies setting up captive biometrics and data management operations
solely on their own or through partnerships.
"In the future, only those players who can overcome the challenges of understanding
and managing regulatory compliance needs, cost pressures and ensure high service
quality will survive and thrive in this increasingly competitive space,"
And as far as the Indian pharma industry is concerned, it
has made great strides in novel drug discovery in the past three to four years.
In fact, the industry is at a stage where it can finally throw off the 'generics-only'
tag that it has traditionally carried. There is a concerted focus now on developing
data management and analytics capabilities that are required to support drug
development. On the development front, the industry has adopted leading products
in the areas of EDC, CDM, CTMS as well as Adverse Event Reporting (AERS).
Similarly, CROs, large and small, are creating facilities
and infrastructure, and spending millions of dollars for procurement, installation
and training for the highly publicised 21 CFR Part 11 compliant software (like
Clin Trial, Oracle Clinical and PheedIt), to become 'Full/Complete Service Provider'.
Some CROs are getting ISO 27001 certification, which ensures information security.
The bigger global players are scaling up their operations to hire more people
and moving their business from elsewhere to India and are catering to the growing
demand for cost effective and good quality data management. Besides having access
to the best of CDM softwares and systems available globally, the talent base
has also matured. Global pharma companies have trained many members of the staff
of their India based vendors hence there is greater parity with global capabilities
than a few years back. India does more than 60 percent of all outsourced CDM
work now; though Australia and to some extent China have started work in this
area. Also many global CROs have been increasingly off shoring a lot of their
business process and data management functions to low-cost locations such as
Asia-Pacific, Africa and Eastern Europe. "However India still lacks the
depth of expertise available in the West," remarks Tamhankar.
CDM market in India will expand rapidly in the years to come as long as Indian
companies are able to offer large scale data management services at very optimal
costs. The concept of gaining advantages through outsourcing data management
work to India has now been proven beyond doubt. Also, as major biopharma companies
have outsourced their work to India and have gained tremendous advantage in
terms of cost savings and speed, the next tier of companies is now increasingly
looking to outsource and are exploring possibilities. This will boost the flow
of work to India.
EDC is an emerging trend and a majority of the trials in the coming years will
shift to this mode of data transfer from the traditional paper based data capture.
This will further facilitate outsourcing of CDM.
So undoubtedly, CDM market in India is poised for a steady growth. A hint of
who will dominate the market is given by Mahesh Malneedi, President, MakroCare,
who says that as more and more trials become paperless and move towards EDC,
companies that have thorough EDC capabilities will be best positioned to capture
market share, feels.
While there will be competition for work between CROs and IT companies, most
companies will choose IT companies for work of a more transactional nature and
prefer CROs for work requiring deep clinical research domain expertise. A few
companies are already working on this model. What would matter most in the long
run, in both cases, are consistent, flawless execution capabilities.