Rates Increase Abroad Due to High Demand

Asia, Latin American, and Eastern Europe are increasingly attractive geographies in which to conduct clinical research. The data in GrantPlan® shows that overhead rates in many countries are increasing, as illustrated by China and India. According to www.ClinicalTrials.gov, GrantPlan subscribers conduct over 76 percent of all clinical trials.

Drug development professionals already know that successful investigators and sites often seek to command a premium in any discussion over clinical trial agreement negotiations. Similarly, when multiple studies in the same indication are looking to enlist investigators, individual sites are often in a stronger position to command a price premium. We see much the same phenomenon at work in geographies newer to clinical research. They offer large naïve patient pools, well trained physicians, and potentially lower costs.

Average institutional overhead rates in China and India.

For instance, recent data shows that China and India are experiencing sustained growth in the number of clinical sites involved in commercial clinical trial activity. Unlike in the United States, the vast majority of clinical research in China and India is done in hospitals, rather than private practice. The demand for clinical research services is growing in the institutions, while the supply is clearly limited.

Many of these institutions in China and India are putting in substantial effort to better understand their clinical trials' indirect costs. These are all the costs that are necessary to sustain the infrastructure for the conduct of clinical research, but which cannot be directly charged to any specific project. Supply and demand also helps to explain the increase in overhead rates. These institutions are in demand. Institutions can charge these rates because someone will pay them.