Chapter 21. Clinical Trials, GCP's and GCO's
To protect the public from inadvertent adverse reactions (such as the Thalidomide tragedy), most
developed countries have stringent drug registration requirements, which require extensive
experimental and clinical proof of safety and efficacy. By the mid-1970's it was clear that
incompatible testing protocols and requirements could function as non-tariff trade barriers, and several
organizations, including the American FDA and the OECD began trying to "harmonize"
requirements. Still, the FDA requires that experimental data in support of drug registration must be
from laboratories, whether in the U.S. or abroad, complying with the FDA's Good Laboratory
Practices (GLPs) regulations. Clinical trials must be conducted following FDA Good Clinical
Practices (GCPs) and drugs must be manufactured following FDA Current Good Manufacturing
Israel's ISO-9000 standards are close to the American GLPs and CGMPs, but GCPs are another
matter. This means that while Israeli research laboratory services and drug licenses can attract
American partners and markets, its clinical trials are limited to secondary confirmatory trials. This is
a shame, since Israel has four world-class medical schools, 1,200 ambulatory clinics, 15,000 nurses
and 12,000 established Western-style physicians (many Americans or American-trained), plus another
6,000 recent immigrant physicians and even more immigrant nurses from the former Soviet Union --
all for a total population of only five million. Israel could thus be an exceptional resource and partner
for American drug firms needing reasonably-priced, fast, high-quality clinical trials. The potential
advantages for Israel are equally obvious.
Despite the seemingly inexhaustible supply of impressive Israel medical advances and ingenuity,
Israel sees few of them through from lab to market. For now, the incredibly high costs of registering
pharmaceuticals, and the difficulty of doing local clinical trials that would be accepted in the U.S.,
have limited most Israeli indigenous medical products to diagnostic test kits, research chemicals and
medical devices. Most other products were usually licensed out to foreign firms, often at an early
stage, although the larger firms -- Teva, Biotechnology General, Interpharm and Israel Chemical --
and some smaller firms are now, according to Dr. Hamutal Meiri, Coordinator of Israel's National
Committee for Biotechnology (NCB), bucking this trend. This contrasts with Israel's full participation
in the high-tech agricultural and veterinary markets.
In today's highly competitive drug market, getting a new product out and into the hands and
consciousness of U.S. physicians six months before the competition can make a major difference to
acceptance, sales and profitability. According to Dr. Meiri, that is precisely where Israel excels.
Recruitment of patients is easier and better than in the U.S., and the loss to long-term follow-up is far
less. The country is small, all citizens carry an identity card, there is an effective national health
insurance program and 80 percent of the entire population belongs to the same health maintenance
organization (HMO), Kupat Holim. That means that Israeli clinical trials can be started and completed
much more quickly, giving a potential American partner an edge over European (or other American)
competition. And, unlike many other countries, Israeli medicine is U.S.-quality, U.S.-based and
involves many U.S.-trained physicians.
Israel's clinical infrastructure is already in place and well-developed. High ethical and informed-consent standards are universally maintained and "Helsinki" Bioethics Committees are inside all major
Israeli hospitals. As a country of immigrants, many of whom maintain their own tight communities,
Israel also has a uniquely diverse and well-defined series of genetic subpopulations. Finally, the costs
of doing clinical trials would also be lower in Israel than in the U.S., although estimates vary from
"only slightly lower" to "almost 30 percent lower." The latter estimate seems unlikely since,
although Israeli physicians' take-home pay is notoriously low, that is mostly because of the high
domestic income tax rate. In any case, according to most respondents, the cost advantage would be
insignificant compared to Israel's time and quality advantages.
So What's the Holdup?
Few blame the FDA, which travels to Israel twice a year for inspections, and is beginning to give
courses on how to meet its regulations. The 1994 courses were on GCP's and CGMP's for medical
devices, an area in which Israel has comparatively few regulations. The FDA previously held a three-day seminar on pharmaceuticals. The FDA is also cooperating with the Israeli Ministry of Health,
which is trying to harmonize U.S. and Israeli testing requirements. This harmonization project is
making great progress, but it is one thing to harmonize requirements, and quite another to meet them.
Mira Richman, Director of the Health Care Department of the Israel Export Institute, agrees with
Meiri that the holdup is not technical or quality-related. "Israel can theoretically meet the FDA
requirements; but actually setting up to comply will be costly," she says. Several major Israeli
hospitals including the Hadassah Medical Center in Jerusalem, are already "qualified" as facilities for
doing U.S. Phase II and Phase III clinical trials. The problem is the large initial investment required
to train inspectors and to undertake the trials with all the FDA stringencies. Despite the expense and
lengthy effort involved, success would open up major new mutually beneficial opportunities for the
Israeli medical community and for Israeli and American drug companies. Of course, the American
consumer might benefit most of all.
For more detailed insight into GCPs, I turned to Dr. Moshe Perkal, President of Pharmaceutical
Associates, Inc., an American expert on U.S. pharmaceutical testing and FDA regulations, now living
in Israel. Dr. Perkal emphasizes four main points:
The GCPs are comprehensive, governing the total conduct of all clinical trials from beginning to
end. They are "common sense" in theory, but rigid and formalistic in practice.
They mostly involve extensive recordkeeping, informed consent, compliance with pre-agreed
protocols and other matters essential to FDA auditors, rather than sophisticated technical or financial
Enough Americans and Israelis with U.S. pharmaceutical experience live in Israel to assure GCP
compliance. What is lacking is the will and some money for training Clinical Research Associates.
Meeting the GCPs is essential to increasing U.S. and international confidence in Israel's clinical
trials, and ultimately to her reaping the full benefits of her large, talented scientific and medical
Typical GCP requirements include setting up Institutional Review Boards to assure that informed-consent forms (Israeli ones don't meet all the quirks of GCP requirements) and research protocols
adequately protect human research subjects, that the study's potential benefits justify potential risks
and that adequate records are kept. Since meeting these requirements is a science unto itself, many
drug companies turn their testing responsibilities over to a Contract Research Organization (CRO).
These, in turn, hire teams of internal auditors or Clinical Research Associates (CRA) to monitor trials
at each hospital, clinic, etc. In the United States, most CRA's are nurses. This is where most expense
lies, since each CRA requires training, travel and salary, and many CRA's are needed for each trial.
The CRA's are the most critical link in the chain, since even U.S. physicians -- never mind the even
more individualistic Israeli ones -- are notorious for resenting and circumventing the rigid protocols
and guidelines imposed. Keeping the sponsoring drug company out of trouble can be a difficult,
complex and thankless CRA task. At each site, a "study nurse" is usually assigned to coordinate
The FDA clinical trial process consists of three distinct phases. The first two are simple. Phase I is a
small acute safety trial in which 50 or so healthy volunteers try the drug for a few days to see if there
are any obvious adverse effects. If there are, their healthy bodies are more likely to weather the
storm. Phase II is a larger (100 person or so), longer (a few weeks or months) test in sick patients, to
see if their weaker constitutions exhibit any side-effects and if there are preliminary indications of
efficacy. Phase III is a series of long-term, double-blind "adequate and well-controlled trials" (note
the plural) to clearly demonstrate the new drug's safety and efficacy. This is where the comparatively
mild Phase I & II financial and manpower requirements are multiplied to major, daunting proportions.
Although only two Phase III studies ("trials") are required by law, most drug companies do 10 or
more separate trials to build a convincing case for approval. Since only about 1-3 prospective patients
in 10, far less than most doctors think, will actually meet all the protocol qualifications, each trial
must usually combine data from 20 or more participants at each of 20 or more sites. This translates
into over 400 patients and over 400 consent forms, primary records, case report forms, CRA-monitoring reports, etc. per trial. If these cost $2,000 per patient, that means about $800,000 per
trial, and about $8 million per Phase III. Actual costs are often considerably higher.
Although few Israeli drug companies could afford such costs themselves, the "flip-side" of this
difficulty is an unparalleled opportunity. Israel's extensive, well-trained and partially-underutilized
medical professionals, highly compact and organized hospital system, and 1,200 ambulatory clinics
could be profitably put to work doing clinical trials for U.S. drug firms. The benefits to both sides
could be immense. Dr. Perkal estimates that it would cost only about $1 million to setup and train the
CRA's, "study nurses" and CRO executives required to staff a full-scale American-style CRO. The
main costs are not in startup, but in ongoing operations (which are recoverable). Once started, an
Israeli CRO could easily earn $5-15 million a year in revenue, although this is not the same, of
course, as profits.
Israel could also play a significant role in speeding up U.S. drug approvals. According to Dr. Perkal,
even a "smallish," but successful new pharmaceutical can bring in $120 million a year to a U.S. drug
firm. Every month's delay in bringing the product to market, however, can cost $10 million in lost
sales. The significant direct and ripple effects of a six-month head-start are obvious. Because of its
fast enlistment of patients, low dropout rates and lower overall costs, clinical trials can be conducted
more quickly and efficiently in Israel. This would increase American competitiveness, which would
lead to more sales, production, and, ultimately, jobs.
What Needs to be Done?
The main barriers to realizing these Israeli and U.S. benefits, according to Dr. Perkal, appear
psychological, not technical. For example, American CRO's are usually started by scientific or
medical entrepreneurs, who have a personal financial interest in the company, and cut startup costs to
the bone. They work for next to nothing at first, in hopes of making major sums once things take off.
Most senior Israelis with CRO potential won't budge without money up-front (high salaries, not stock
options) and they would be content to remain "hired hands" who can retire in 10 years. The few
current Israeli proposals to form CRO's are reportedly hopelessly top-heavy on salaries. According to
Dr. Perkal, far more emphasis must be placed on CRO risk-taking and CRA training to get things off
Conversely, setting up a proper CRO would have a major "ripple effect" in raising the level of
medical research in Israel. No one can afford to be second-class, and staff recordkeeping, exactitude
and honesty would soon increase throughout the Israeli health care system. At present, there are
persistent rumors that, due to the expense, some hospital clinical laboratories do not always run
adequate controls. A Phase III mentality would thus directly benefit the Israeli populace throughout
the country, in terms of better health care. What's needed most is someone in Israel (the MOH, MIT,
a privately-funded support group) to take the initiative, set the ground rules and start things rolling.
Israel will also need to change U.S. perceptions. The FDA tends to trust "familiar faces," and it
would probably take three-five years of successful confidence-building to make Israel fully
competitive. Government or outside help may be needed in this first critical phase, in starting CRO's,
strengthening public will and, perhaps, even providing some initial financial incentives. The latter
would probably be limited to helping small Israeli companies test new products since, as we have
seen, marginal changes in test costs are not much of an incentive for large U.S. companies losing $10
million per month of delay. Although it may be unrealistic to expect many U.S. drugs to be approved
exclusively on Israeli data, Israel's capturing a sizable slice of the international drug testing market
could bring incredible financial benefits both to Israel and her U.S. partners in less than a decade.
In fact, Israeli drug firms and testing facilities could boost the FDA's confidence in their results
overnight with a single dramatic gesture, one requiring no cost, only will. At present, FDA auditors
can walk into any American drug company test site, in North Carolina say, without prior notice and
inspect conditions and records on the spot. Abroad, the FDA, by treaty, has to give 30 days notice.
Naturally, inspections made under such conditions do not engender the same degree of trust and
confidence. Imagine the revolution in both if a group of Israeli firms and laboratories formed a
voluntary association and offered the FDA the following deal: "We will voluntarily agree to meet
U.S. standards (GLP, GLC, CGMP) and undertake U.S. responsibilities (unannounced on-the-spot
inspections), if you will give us U.S. privileges (more frequent and timely inspections)."
At one stroke this would boost U.S. confidence, speed up Israeli approvals, and give Israel a unique
worldwide competitive advantage. The FDA might be interested in such a deal, as an international test
case if nothing else, and Israel would essentially achieve a special "earned most-favored nation status"
(even the U.K. and Switzerland have no such relationship). Congress could help by increasing the
FDA's budget for international inspections, at least for such a pilot program. A policy of "equal rights
for equal responsibilities" represents a fair trade that would benefit both countries, and clearly
underline their shared values and opportunities in health care.
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