COMPARATOR SOURCING FOR CLINICAL TRIALS IN RUSSIA
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1 COMPARATOR SOURCING FOR CLINICAL TRIALS IN RUSSIA It is becoming exceedingly rare SUMMARY (and frequently unethical) to be able to conduct a late stage Source clinical program without showing the comparative effectiveness of a Local sourcing is almost always the best choice new drug candidate. The era of Always use primary sources: manufacturer or exclusive distributor the placebo-controlled trials is, for the most part, over. The increased Supply logistics pressure on the drug developer to Look for vendors with direct relationships with manufacturers demonstrate relative benefits versus an existing standard of care Beware of advanced order placements for expensive branded products treatment translates into more Be prepared if a manufacturer requests study-related documentation complex, capacious, multinational N RUSSIA COMPARATOR SOURCING FOR CLINICAL TRIALS Check if IN the RUSSIA drug is on the government procurement program list head-to-head clinical trials*. Check for in-stock availability and reserve in advance Thus, new pivotal clinical trial design usually starts with the Pricing selection of an appropriate Use caution with both price extremes comparator** which then needs to be sourced and supplied, both Price fluctuations are annual events set by the manufacturer consistently and cost-effectively. Global vendors markups are costly, and not always necessary This task can be rather challenging and when the trial is international, the number of potential problems less germane to BRICS countries is unequivocally amplified. and Russia in particular. The most obvious risk aversion strategy is early inclusion of comparator sourcing into trial planning. Many sponsors address this issue by selecting a global supplier, capable of handling all procurement needs on an international scale. Such approach, without argument, has its merit. It saves a sponsor s time and resources by alleviating the need for in-depth analyses of regional markets, its regulatory requirements and selecting multiple local vendors. This is a strategy that can work rather well in established markets, such as the EU and the US, with its well grounded supply logistics and applicability of single sourcing algorithm. However, it is much *Choice of comparator in active control trials of new drugs. Annals of Pharmacotherapy 2008;42: **Evidence of comparative efficacy should have a formal role in European drug approvals. BMJ 2011;343:d4849 This article will examine the features of commercial drug procurement for clinical trials in Russia with the goal to improve the understanding of the local sourcing landscape and help a sponsor minimize regulatory, fiscal and operational risks involved.
2 The Source of sourcing Let us start by saying that importation of a comparator drug into Russia is a very onerous task. The amount of time it takes to gather all supporting documentation and go through required regulatory steps as well as the cost of importation make comparator importation quite prohibitive. Thus, single or regional sourcing strategy is seldom employed, which leaves local sourcing as the key procurement solution. Sourcing suppliers in the Russian Pharma market can be broadly defined as primary and secondary, where primary suppliers are the manufacturers and their official distributors and secondary suppliers are everyone else. As a rule, the secondary suppliers are wholesalers who procure drugs in the secondary market. To assure supply chain security, single/global batch traceability, and to minimize the risk of counterfeit products, only primary suppliers should be considered for the purposes of clinical trials. Supply logistics and availability The main feature that distinguishes a reliable sourcing partner is the ability to ensure uninterrupted delivery of the drug for the whole duration of the study. In Russia, drug reservation and adequate supply maintenance can be faced with the following challenges: Very few vendors have direct contracts with the manufacturers. Procurement is usually performed through the official distributers. The Russian pharmaceutical market is similar to the US market in that it can be characterized as a top down infrastructure, with the drug flow starting at the manufacturer, moving to authorized distributors, then to hospitals and pharmacies, and, finally, to the secondary wholesalers. In comparison to the EU market, where products can be purchased directly from the manufacturers, in Russia, the medications required for clinical trials are generally available only from the official distributers. Pharmaceutical companies don t welcome the opportunity to work directly with the clinical suppliers. Study procurement is likely to be a one-off event and involve added order processing costs. In particular, before procurement ensues, in most cases the study sponsor requests a large volume of data about the drug with no guarantee that it will ultimately be purchased. In cases where a direct comparator and not an adjunctive medication is being sourced, another sensitive issue must be factored in you are asking a manufacturer to source the drug with which you will quite possibly be competing in the future. Guzel Kamalova, procurement specialist, COREX DEPOT: When working on international projects we see drastic differences in comparator drug supply between Russia and the EU. Many sponsors are confused by local pharmaceutical market idiosyncrasies, its evolving regulations and distribution features For reasons that will be omitted here, global Pharma in Russia has developed very stringent distributor qualification and selection procedures that often cannot be met. Most distributors have a long track record,
3 large volumes and certain level of exclusivity that guarantees them preferential treatment by the manufacturers. It is unusual to find a clinical trial sourcing vendor that meets all manufacturers requirements and is able to maintain a sufficiently large procurement flow. These few lucky companies have direct contracts with the manufacturers, which is a great attestation to their reliability. Direct relationship between Pharma and a sourcing vendor has a critical competitive advantage, as it allows for immediate feedback on drug availability, preferred provider discounts, more favorable conditions for drug reservation and special batch production. Manufacturers control procurement of expensive branded products to prevent speculative buying The higher the cost and demand for the drug product, the more stringent the safeguards Pharma manufacturers puts forth against speculative buying. It is customarily done through very strict release policies, advanced order placements and letters of guarantee. While direct transactions between Pharma and clinical trial sourcing vendors are straightforward the vendor shows proof of the drug being used in a clinical trial the situation is more complex when the distributors are involved. They rarely understand the demand planning and comparator requirements and are less likely to establish ongoing channels of communication, worry about batch requirements and anticipatory confirmations. In situations where the relationship includes the manufacturer, the distributor and the clinical sourcing vendor, it is the sourcing vendor who must play a proactive role and make sure that the orders are placed in advance, single lots are secured and production documentation is readily available to the sponsor. High value purchases require submission of study-related information It is important to understand that in Russia the commercial market prices and prices of medications allocated for clinical trials may differ quite appreciably. The drug purchased for clinical trial purposes has virtually no effect on its general consumption or on its market prices as its reselling for speculative profit is prohibited. As a result, a qualified vendor may be able to negotiate prices that are often below wholesale market values. For this to take place, the manufacturer must be assured that the drug will be used for clinical research purposes. Such corroboration is customarily attained through making study-related information available to the manufacturer. Many pharmaceutical companies request a copy of a study protocol, a copy of clinical trial approval by the Russian Ministry of Health (MoH) that describes the expected amount of comparator or adjunctive medication to be used in the study. Having this information readily available can significantly optimize the process of drug procurement. Priority is given to government programs Some essential drugs, such as anticancer agents are either subsidized or fully supplied by the government on the national level and have the following chain of custody: Government/Federal Purchasing Qualified Suppliers State Hospitals/Pharmacies
4 This arrangement makes drug availability and lead times unpredictable. For the drugs that fall under government procurement it is also very difficult to obtain reliable and up-to-date information on prices, expiry dates, lot numbers, etc. Very often, clinical trial sourcing vendors must complete additional order processing documentation and submit additional sponsor/trial information. The "7 Diseases" program is a good example of government s centralized procurement of drugs intended for the treatment of patients with rare and expensive diseases: hemophilia, cystic fibrosis, dwarfism, Gaucher s Disease, leukemia, multiple sclerosis, and organ or tissue transplantation. The purchase of drugs for this program is performed twice a year through an open tender of the MoH. Such products as Rituximab, Bortezomib, and Interferon are reserved from manufacturers months in advance. In order to be able to source these drugs for clinical trials, the vendor must be prepared to engage in a very close communication with both the MoH and the respective Pharma manufacturer, submit supporting documents and request advanced reservation and order processing. Only a sourcing vendor who understands all the intricacies of this tedious and sometimes illogical system will be able to locate, source and deliver such drugs without delay and according to sponsor s specifications. Lead time variability After the order is placed, the supply lead time can vary from several days to several months, depending on the drug, manufacturer, and the requested quantity. In order to shorten the lead time, several steps may be taken: 1. While the details of the transaction are being finalized with the sponsor, a qualified supplier or sourcing vendor can ask the manufacturer to reserve a drug. As mentioned earlier, a direct and trusting relationship with the manufacturer and/or the supplier makes such concessions much more likely. 2. After order processing the supplier or the vendor should promptly confirm availability of funds, perform prepayment or provide a letter of guarantee. 3. For an ongoing supply, the vendor should proactively check stockpile availability of the drug and notify the sponsor if the reserves are low. This could help a sponsor with advanced planning of the next purchase. On a positive note, the average drug delivery in Russia occurs much faster than in the EU and usually takes 2-3 weeks after the confirmation of the purchase. Table 1 Comparative lead times of large volumes of high value drugs in Russia and in the countries of the EU Product Russia EU Xeloda 2-3 weeks 8-10 weeks Humira 3-4 weeks 6-8 weeks Mabthera 3-4 weeks 6-8 weeks
5 Pricing We suggest that when choosing a comparator sourcing vendor the price of the drug offered by the vendor should not become the sole decisive factor. However, both extremes of prices should be viewed with caution. Prices that are too low may signify that the drug has been procured on the secondary market from unknown suppliers. The prices that are too high may reflect lack of a relationship with the manufacturer/exclusive supplier, or, even worse, an unjustified mark-up by the vendor. It is also important to have an upfront discussion about a vendor s ability to perform repackaging, reformulation and relabeling and compare these prices during bid defenses. It may be helpful to align with the vendor that has storage and distribution capabilities. Prices for medications change annually As with the American model, it s the manufacturers who generally establish drug prices, but prices for the medications that are included in the list of vital and essential drugs are under governmental control. Despite the Russian Ruble being a soft currency with high inflation expectations, the price for vital and most essential drugs generally increases no more than 0,6% 2% per price revision and gets adjusted once a year. Thus, when designing a study budget the price of comparator and adjunctive medications can be set as a constant for the entire duration of the study. This is not to say that the sponsor will experience zero fluctuations in the budget due to currency exchange rates changes. For these situations experienced sourcing vendors have special forms of contracts and amendments designed to minimize the risks in cases of long-term supply. Using local sourcing vendor can be more cost-effective When operating in Russia, global clinical supply companies are forced to work with local vendors who have unrestricted wholesale pharmaceutical licenses that allow them to handle large volumes of medications. Thus, working with global clinical supply companies inevitably leads to additional mark-ups and as a consequence, to significant increases in final costs. Another, possibly even more valuable advantage of using local suppliers is shorter order processing time. By avoiding unnecessary links in the chain of communication a sponsor can reserve the drug directly from the sourcing company. In addition, a well-run local sourcing company is always better informed about the situation in the marketplace and understands local specifics of the procurement process, which translates into a less stressful experience for a client. Sourcing vendors should have good logistics support There are two types of commercial drug sourcing vendors in the Russian marketplace: 1. companies that specialize strictly in wholesale services; 2. companies that, in addition to procurement services, offer their own storage facilities and logistics services;
6 While storage services and distribution capabilities are not obligatory and can be outsourced, the ability to store and distribute large amounts of the drug adds flexibility to the sourcing process. Having an all-inclusive vendor reduces coordination and management costs. Supporting Documents Submission of supporting documents in Russia is a relatively straightforward process. An experienced vendor should be able to obtain a Certificate of Analysis (CoA) for sourced batches of the product without any difficulties. Manufacturers are ready to provide a CoA in Russian or in English but some branded products may require a prepayment or even an order placement. Each delivery of the drug from a manufacturer is accompanied by a Certificate of Conformity (CoC). According to the GMP, every product registered in Russia is assigned a unique number, similar to the EU s Marketing Authorization (MA) number. Conclusion Comparator sourcing in Russia is more complex than in the EU or in the US, so focusing on it early in trial set-up is highly advantageous. Choosing the right local partner can save both time and expense. There is a plethora of objective reasons as to why nearly 45% of all studies fall behind schedule. Comparator sourcing should not be one of them.
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