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June 2001, Vol. 4
No. 6, pp 36–38, 40, 42.
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Feature Article

We are the world?


Pharmaceutical companies are increasingly using foreign populations to expedite the U.S. drug development process.

opening art

To gain FDA approval for a new medication (also known as a “new chemical entity”, NCE), a pharmaceutical company must first prove that its product is safe and effective. The Code of Federal Regulations governs the clinical study of NCEs and comprises the world’s most complex set of regulations designed to monitor and verify the testing and assessment of new therapies. To be approved for sale in the United States, an NCE must first be proven safe in animals and then thoroughly tested in humans over the course of three trial phases of increasing size, complexity, and duration. The purpose of these varying human studies is to determine bioavailability, dosing regimens, safety, side effect profiles, and efficacy for each new therapy. From a study participant’s perspective, however, the different phases also help to minimize their potential risks, and the regulations provide guarantees of complete medical disclosure, vigilant research monitoring, and appropriate therapeutic treatment.

There is another aspect to clinical research, however, that goes beyond the regulations, careful monitoring, and extensive testing procedures required by law. Consider the following (13):

  • Of NCEs identified in a laboratory as having potential therapeutic value, most do not survive animal testing.
  • Of the NCEs that do enter clinical trials, 80% fail to gain approval.
  • The average approved pharmaceutical product takes 12 years to bring to market.
  • The average cost of shepherding a single drug through the approval process is $359 million.
  • Between 1980 and 1984, only about 30% of approved drugs recouped their development costs (that number remains reasonably accurate today).
  • Roughly 60% of all R&D costs are incurred as a result of human clinical trials.

These statisticsare staggering, especially when coupled with the following facts. According to the Pharmaceutical Research and Manufacturers of America, for the 1998 fiscal year, research-based pharmaceutical companies in the United States spent more than $17 billion developing new drugs. This expenditure rate is increasing by as much as 9–10% per year and is a result of the increasing number and complexity of drugs tested (4). In addition, it is taking longer to conduct trials. The main reason is that the FDA is requiring larger patient populations and more trials in each study phase to better monitor adverse effects (although the largest number of trials and test subjects is still mandated during the final phase of testing). Some estimates, in fact, show that trials today require 2–3 times as many patients as they did just 10 years ago (5).

One other critical issue, beyond research costs, focuses on U.S. patent law. Companies that manufacture generic equivalents for FDA-approved drugs are barred from testing and introducing those medications before the original manufacturer’s patent expiration. The problem for pharmaceutical companies is that, for numerous legal reasons, they must file patents on NCEs in advance of preclinical testing (i.e., animal studies). The result is that once a drug is finally approved and becomes available for consumers to purchase, over half the patent life has expired (about 11 years usually remain). The practical effect of this is that a drug developer has only a short period of time in which to recoup the R&D, marketing, and all other associated costs before generic manufacturers begin introducing the same therapy at a greatly reduced price.

The combination of these various pressures forces pharmaceutical companies to search out ways to decrease both drug development costs and approval times. The companies routinely argue, and not without some merit, that the faster they can bring their drugs to market, the greater the number of patients whose lives they can improve or even save. In addition, the faster they are able to sell new products, the better chance they have of recouping their immense research outlays. Of necessity, in a market-driven system, drug development rests on a balance between the desire to improve the health of humanity and the need to improve the health of a commercial entity’s finances.

Time and money

One way to reduce overall costs and speed through the testing process is to conduct clinical trials overseas and then submit the collected data to the FDA for U.S. approval. Here’s how this works: The FDA must consent to an appropriate study design for each U.S.-based trial that will include the use of an experimental therapy (or an approved treatment used in an unapproved manner). To include foreign test data in an FDA submission, pharmaceutical companies submit their research protocols for review, make clear that the proposed trial will be conducted overseas, and then provide assurances that the U.S. Code of Federal Regulations will be adhered to while the trial is conducted. If the FDA believes the trial design is sound, and that adequate oversight will be provided by the pharmaceutical company, the results of international studies can be considered valid and included in the company’s new drug approval application. At present, roughly 27% of all such applications include foreign test results (5).

So why would conducting research overseas, primarily in poor and developing regions such as Africa, the Middle East, Central and Eastern Europe, and Central America,lower costs and increase approval times? It comes down to four reasons: high patient availability, an abundance of diseased populations, lax regulations, and low investigation fees.

Consider that, on average, 3000–4000 patients are required to complete all phases of clinical testing and that, in the United States, it is often difficult and time-consuming to identify that many patients and gain their consent to participate in a trial. In poorer nations, however, the lack of insurance, the cost of medicines (if even available), and the plethora of diseases in need of treatment make recruitment and enrollment relatively fast and easy. Further, because local regulations are minimal, companies can get almost immediate approval to test their products, and because of the overwhelming levels of poverty, they don’t have to pay investigators, coordinators, and other research-related personnel the high fees demanded by practitioners in the United States.

Where the trouble (in part) lies

Given that the pharmaceutical companies agree to conduct their overseas trials with the same level of oversight and scrutiny required within the United States, the problems and concerns about involving such populations are not necessarily obvious. In fact, they do exist and can be divided into three major categories: ethics, fraud, and data quality (see “Further reading”).

The primary ethical issues boil down to questions of how patients are “consented” for and treated during research trials. According to the Code of Federal Regulations, study participants in the United States must sign an informed consent document before entering any research trial. (Patients unable to sign can have a family member or guardian sign on their behalf.) This document, by law, tells patients of their right to discontinue without prejudice from the trial, as well as the researcher’s commitment to treat any adverse health events that may result. It also discloses all known risks and benefits associated with the experimental drug, and, using nonmedical terminology, delineates the study design (blinded, placebo-controlled, etc.), testing procedures, and required medical oversight.

Gaining proper informed consent in trials abroad is challenging and can be riddled with errors.Patients and their families are often illiterate, and it is difficult to verify what investigators tell their patients before enrolling them.In addition, the quality of ancillary care these researchers are able to provide during the trial is often substandard, because many countries do not have the diagnostic equipment and medical supplies available to evaluate and properly treat patients who encounter adverse events, significant or otherwise. Moreover, adequate oversight from patient safety review boards, required within the United States, is far from certain. Finally, it is not always clear whether foreign officials place pressures on patients to participate in trials or if promised medical care, especially post-trial, is provided to them.

Fraud is a reality in clinical research, even within the United States (see “Investigators gone bad”, Modern Drug Discovery, April 2001). But abroad the FDA has far less ability and authority to monitor research centers. Further, local regulations often provide little assurance that the approved research is performed correctly. In the relatively few instances in which the FDA has sent auditors to foreign sites, the reviews have been performed after the trials have concluded and with the knowledge that verifying the existence of the research patients is at best problematic; the only recourse the FDA has against questionable sites is to refuse to accept their data.

Besides possible instances of fraud committed by the sites, there are troubling questions about some pharmaceutical companies. For example, a Nigerian doctor who worked on a 1996 Pfizer, Inc., study involving an antibiotic designed to treat meningitis in children recently alleged that Pfizer presented a backdated ethics approval document to U.S. regulators as justification for its trial (6).

Finally, concerns about data integrity are significant. With supporting documents often missing, little means of verifying the accuracy of collected data, and no exact mechanism to protect against widespread fraud, there is some inherent doubt about the quality of overseas research.

Other concerns

One additional ethical issue involves the often-voiced question of benefits for participants in developing nations. It is likely, given current practices, that even if proven safe and effective, most medications will be too expensive for patients in developing areas; thus, these drugs would provide no real long-term benefit for the very people who helped test them. The crux of this argument is that pharmaceutical companies are simply exploiting poor populations to save time and money, with no intention of providing those populations with medical assistance. (Response to this argument by the pharmaceutical industry is evidenced in recent decisions, made by several companies, to provide AIDS-related drugs at low cost to developing nations.)

Faced with these various concerns, the Department of Health and Human Services announced in January that it would create a new office charged with educating, assisting, and monitoring foreign researchers. In addition, members of Congress have begun talking about possible legislation to provide increased authority and funding for the FDA to police foreign trials. For its part, the pharmaceutical industry would like the FDA to speed its approval process by reducing regulations and is interested in gaining legislation to extend patent lives.

Without some governmental action, however, little progress can be made to guarantee safeguards for the health of all research patients. Currently, the costs and time constraints inherent in drug development are too enormous for pharmaceutical companies simply to ignore this vast source of potential study participants. Obviously, the effect on foreign populations, and especially on poor, medically deprived, and desperate patients, is significant. As long as trials are conducted under different conditions abroad, ensuring the validity and compatibility of data gathered in the studies may prove difficult—a scientific, as much as ethical, concern. Thus, the implications for the safety and efficacy of medications approved within the United States are enormous, and given the rate with which the development of NCEs is increasing, the ethical and safety concerns associated with the drug approval process are likely to become exponentially problematic.

Good science or risky medicine?

Discovery Laboratories, Inc., issued a press release on February 23, 2001, to address concerns raised by its intended plan to conduct a Phase III trial in Latin America for a novel, idiopathic respiratory distress syndrome medication. The drug, Surfaxin, is being tested to determine its safety and efficacy in premature newborns, and Discovery has petitioned the FDA for consent to include the data from its upcoming Latin American trial in its U.S. drug approval application. If allowed, Discovery estimates an overall saving of two years in clinical trials and, correspondingly, thousands of infant lives.

However, Public Citizen, an advocacy group based in Washington, DC, and headed by Ralph Nader, questioned the ethics of this trial as participants would receive either a placebo, the investigational drug, or an FDA-approved medication. In the United States, laws and medical ethics preclude the use of placebos in trials that involve patients suffering from life-threatening illnesses if approved treatments are available. For its part, Discovery plans to donate mechanical ventilators and monitors to patients in Latin American countries; the company claims that trial subjects who are given placebos will have access to this equipment, thus assuring that they will still be better off than nonstudy participants. On April 4, the FDA ruled the placebo arm was unacceptable, and Discovery agreed to a study redesign.

Discovery Laboratories press release, February 23, 2001,; Reuters Health,


  1. Pharmaceutical R&D: Costs, Risks and Rewards; OTA-H-522; U.S. Office of Technology Assessment, U.S. Government Printing Office: Washington, DC, 1993.
  2. Grabowski, H. Health Reform and Pharmaceutical Innovation; AEI Press: Washington, DC, 1994.
  3. DiMasi, J. A.; et al. J. Health Econ. 1991, 10, 107.
  4. PhRMA Annual Survey as cited in PAREXEL’s Pharmaceutical R&D Statistical Sourcebook, 1999.
  5. Endless Frontier, Limited Resources. U.S. R&D Policy for Competitiveness Sector Study: Pharmaceuticals.
  6. Stephens, J. Doctors say drug trial’s approval was backdated.
Further reading

Cullen T. Vogelson is an assistant editor of Modern Drug Discovery Send your comments or questions regarding this article to or the Editorial Office by fax at 202-776-8166 or by post at 1155 16th Street, NW; Washington, DC 20036.


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