Asia Pacific Attracts Clinical Research, Drug Development

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Sept. 23 – The Asia market represents a significant opportunity for clinical research organizations (CROs) – organizations that provide outsourced medical-related research on a contract basis – after about 30 percent of total Asia Pacific clinical expenditures having been outsourced to such organizations over the past year.

Over the next five years, the CRO industry in Asia is expected to see a compound annual growth rate of 12 percent partly due to Asian countries “leveraging on the growth of logistics and supply chain management in the region.”

Specifically, China, India and Southeast Asia are three areas in particular that will see strong growth in the CRO market. These emerging markets house a number of attractive features for CRO-type companies. For example, the cost of clinical trials in these India and China is between 30-50 percent cheaper than those in Western countries, and both have also experienced high growth rates in their respective medical industries.

The Economist Intelligence Unit’s healthcare business unit, Clearstate, has identified three push factors that make Asia a particularly attractive place to conduct this type of medical business, specifically because Asia has:

  • a large and quick growing pharmaceutical market;
  • a favorable clinical environment; and
  • a major cost advantages in comparison to the rest of the world.

Other reasons for the growth in the CRO industry also include increases in the cost of drug development, the upcoming “patent cliff” (the phenomenon of patent expiration dates coinciding with an abrupt drop in sales following a group of products capturing a high percentage of a market) and the desire on the part of such companies to expand their international reach.

In addition, two major areas of future growth in China are the pharmaceutical and biotechnology industries. Such growth has led to an increase in mergers and acquisitions, as well as the forming of strategic partnerships across a number of the medical fields.

Despite suffering from drawbacks – such as regulatory issues – India has numerous factors that make it stand out as a smart investment for the future.  The country’s large patient population and the variety of diseases its people tend to be afflicted with have created a perfect opportunity for large growth in the clinical trials industry.

India’s regulators also seem more motivated to streamline the approvals process for medical research, thus reducing one of the biggest barriers to doing work in this country.

GlobalData analyst Adam Dion affirmed these trends, noting: “Having an on-the-ground regulatory support and local infrastructure are key to implementing a successful product commercialization strategy in these emerging markets, particularly in China and India.”

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email, visit, or download the company brochure.

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