How Australia became a preferred destination for clinical trials

Nicola Pearson Date published: Apr 03, 23

The clinical trials process has always been complex, risky, and required significant human resources. But the last five years and, in particular, the COVID-19 pandemic have introduced a fresh series of challenges and new ways of working for biotechnology and pharmaceutical firms.

One solution to this has been a shift in where clinical trials take place. For example, Global Data and Novotech research finds that 12,900 of the 27,000 clinical trials conducted worldwide in 2021 took place in Asia-Pacific (APAC). Furthermore, the APAC region has seen a significant 10% growth in clinical trials since 2017, compared to 2% in the United States and the rest of the world, and just under 3% in the European Union.

The large majority of testing in APAC has been in China, which saw new trials double between 2017 and 2021. But we’re increasingly seeing companies turn to Australia for their clinical trials, as the country promises rapid approval times, high-quality research and equipment, and lower costs.

Why are companies turning to Australia for clinical trials?

Australia offers a wide range of benefits for pharma and biotech firms seeking high-quality clinical trials. The country has streamlined regulatory requirements, and sponsors can claim government research and development (R&D) refunds of up to 43.5% on all clinical research spending.

There are three core reasons why companies are turning to Australia:

Clinical trial cost-savings

Australia is especially cost-competitive for US firms in the early phase of clinical trials. Global Data and Novotech insight reveal that clinical trials in Australia are 28% more cost-effective than in the US, before tax incentives, and 60% more affordable after-tax incentives.

Australia is particularly attractive due to its government offering several tax-reduction benefits to encourage smaller firms to engage in R&D in the country -

• Companies with an aggregated annual turnover under $20 million AUD and incur a loss get a 45% cash refund.
• Companies with an aggregated annual turnover of under $20 million AUD and incur a profit get a 45% non-refundable R&D tax offset.
• Companies with an aggregated annual turnover of over $20 million AUD get a 40% non-refundable R&D tax offset regardless of profit or loss.

To be eligible for these tax savings, foreign companies must conduct R&D activity through a permanent Australian establishment. Their core R&D activity needs to be experimental, the outcome can’t be based on prior knowledge, and they must spend at least $20,000 AUD on R&D expenditure.

Global Data and Novotech highlighted Zafgen Inc, a US-based biopharma firm focused on obesity and complex metabolic disorders. The company ran a 12-week study with 150 patients in three regions of Australia. This was due to the availability of participants, efficient regulatory environment, and favourable tax policies. Zafgen enjoyed savings of up to $1.8 million (US) by running the project in Australia.

Clinical trial speed

Increasingly complex and stringent regulations are a stumbling block for many pharma and biotech firms. But Australia’s clinical trial process is flexible and relatively straightforward, which helps to save companies time and money.

Australia’s Clinical Trial Notification (CTN) scheme aims to reduce clinical trial sponsors’ regulatory burden. The scheme sees all clinical trial materials submitted to the relevant ethics committees responsible for assessing the validity of the trial, including factors like trial design, safety and efficacy, and ethical acceptability.

Final site approval is given by the institution where the trial will be conducted, and the Therapeutic Goods Administration (TGA), equivalent to the United States Food and Drug Administration (FDA), is notified when approval is received. The TGA doesn’t review data about the trial, eliminating the risk of process duplication and ensuring an efficient and rapid process while remaining ethical.

For example, Global Data and Novotech insight highlighted Californian pharma firm Samumed Inc working with an Australian CRO to enrol patients for a clinical trial in Australia. Using the CTN scheme and conducting the trial at the private site of the Queensland Institute of Medical Research, Samomed received protocol approval in under two weeks.

Clinical trial quality

Australia has a rich ecosystem of higher education institutions with global recognition for high-quality clinical and scientific research. While the Australian Government is reported to spend over $3 billion (US) annually facilitating clinical and medical research and enhancing its research infrastructure. As a result, foreign companies can benefit from state-of-the-art healthcare equipment and world-class research teams and capabilities.

Biotech and pharma companies can reap the rewards of working with:

• Clinical trial networks: There are over 50 clinical trial networks in operation in Australia, all led by highly skilled clinicians who can provide access to patients and clinical trial infrastructure.
• Independent institutes: Australia also has more than 50 independent medical research institutes, most of which work closely with hospitals and universities. This allows firms a direct link between their lab research and clinical practices. Australia is also home to multiple biobanks, which hold extensive collections of biological materials related to personal and health information - for use in health and medical research, such as cancer and brain banks.
• CROs: Australia has a well-established CRO market consisting of independent local firms and affiliates of global corporations.
• Universities: Australia is home to more than 40 universities, many of which are connected to teaching hospitals or focus on clinical research.

Australia’s clinical trial industry has a solid ethical and regulatory framework with international standard codes of conduct. The TGA closely aligns with international regulatory standards, which ensures easier acceptance and integration with global institutions.

The quality of Australia’s clinical institutes ensures firms deliver highly productive and impactful research backed by one of the world’s most rigorous patent protection systems. Therefore, firms conducting clinical trials in Australia can use their data to support international regulatory applications to the FDA and the European Medicines Evaluation Agency (EMEA).

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