As companies seek to optimize their drug development programs, Chinese CROs have become an increasingly important part of the global life sciences landscape. But what's the reality of working with these organizations, and how can companies navigate the challenges while capitalizing on the opportunities?
We sat down with Harri Järveläinen, an independent consultant with over 20 years of experience in the pharmaceutical industry, to explore these questions. Recently, his work has focused on auditing, qualifying, and monitoring Chinese CROs and CRO selection for Western companies. He maintains residences in both China and California, allowing him to bridge the gap between Western pharmaceutical companies and Chinese CROs.
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Summary, Key Points, and Practical Takeaways
This interview has been edited for clarity and length.
Nick Capman: Can you give us an overview of the Chinese CRO landscape?
Harri Järveläinen: The Chinese CRO industry started about 20 years ago, with most companies beginning around 2004-2005, typically as medicinal chemistry operations. Around that time, many Chinese professionals were returning from abroad — they were called "sea turtles" — and started working at these CROs since the local biotech industry didn't really exist yet.
The expansion was rapid, and by 2010, the most prominent companies already had around 10,000 employees, offering full-service end-to-end capabilities across discovery, early pre-clinical development, and manufacturing. 2012 marked a turning point when the government introduced programs heavily supporting biotech industry development. By 2015, the industry exploded, with biotech companies mushrooming across China.
Initially, almost 100% of clients were from the US, but it shifted to about 50/50 between US and Chinese clients during the boom. Today, the industry has matured significantly. These CROs have been operating for about 20 years; quality-wise, they can be among the best in the world. All major pharma companies do some work in China, and for smaller companies, especially in the US, it's very difficult to imagine a situation where Chinese CROs would somehow disappear from the picture — they're too deeply integrated into the industry.
What are some unique benefits that Chinese CROs offer that are hard to find elsewhere?
One major advantage in the non-clinical space is access to research primates. Most of the world's research primates come from southern China, so the supply chain is much easier and more cost-effective. This is particularly important for biological products like antibodies that require primate studies.
Regarding pricing, during the pandemic boom years of 2020-2021, when American CROs were very busy, the price difference was sometimes dramatic. I've seen offers from US CROs that were up to 10 times more expensive than in China. Now it has stabilized, but routinely, especially for studies involving primates, it can still be three to four times cheaper to conduct these studies in China.
Lead times are another significant advantage. The biggest Chinese CROs have their own colonies and vendors, providing an in-house supply of research primates. This means lead times can be as short as two months for GLP dogs, compared to six months in the US.
They also offer some unique capabilities that many US CROs don't provide, such as technically challenging non-GLP studies like continuous infusion studies in rodents. They also have specialized capabilities — for example, one large CRO has about 1,000 overweight monkeys at its facility for obesity studies, which is quite unique.
What about misconceptions and challenges? What should companies be aware of?
One challenge is language and communication. Interestingly, when I moved to China in 2012, younger Chinese people were very focused on learning English. However, this has evolved, and with China's closed internet ecosystem, there's less exposure to English now. I've noticed that young study directors at CROs often have lower English skills compared to 10-15 years ago.
However, CROs have adapted to address this. Many now have project management arrangements with dedicated project managers who speak good English and facilitate communication. Everything is still documented in English – the SOPs, operations, and study reports are all in English in addition to Chinese. It's a dual-language operation.
Regarding IP concerns, many horror stories circulate, but when you dig into the details, these stories are quite old. Things were indeed wild in China in the early 2000s. Around 2007-2008, the head of the Chinese FDA was even sentenced for corruption. But things are very solid now, especially with the largest, most established CROs.
These major CROs are audited regularly by big four consulting firms, with hundreds of audits conducted. I've never encountered any serious IP concerns or heard of any significant issues arising from these audits. The key is to stick with the largest, most established CROs, especially when first entering the market.
What should companies consider when assessing and selecting CROs in China?
For US-based companies planning to submit to the FDA, inspection history is critical. While the FDA inspects local US CROs every couple of years, overseas inspections, including in China, typically occur every three to four years, depending on submission volume.
It's crucial to look at when the last FDA inspection occurred and review the 483 letter. In non-clinical space, there's almost always going to be a 483 letter because there are so many moving parts. The CRO should be willing to share a redacted version of that letter, and you can also obtain it through FOIA requests.
Chinese CROs often also get inspected by OECD inspectors who issue GLP certification. While China isn't an OECD member, these certifications are becoming more meaningful, especially for European submissions. The EMA is now generally willing to accept submissions with Chinese data if the CRO has been inspected by an OECD authority within the last three years.
As a sponsor, you need to maintain oversight of your CRO studies. This typically involves first qualifying your CRO through an audit, either by in-house quality people or an independent consultant, and then monitoring the study at critical phases like first dosing day. Documentation of these oversight activities is crucial in case of any regulatory challenges.
Harri's key takeaways:
Select established partners. When first entering the Chinese market, stick with the largest, most established CROs to minimize risks and ensure quality.
Leverage the cost and time advantages when appropriate. Chinese CROs can offer significant cost savings (typically 3-4x) and shorter lead times, especially for studies involving primates.
Consider inspection history. Review the FDA inspection history and 483 letters carefully. The frequency of inspections (every 3-4 years) and findings can provide valuable insights into a CRO's quality systems.
Address communication challenges proactively. Plan for language barriers by working with CROs that have strong project management systems and English-speaking project managers.
Maintain proper oversight. Implement a formal qualification process and ongoing monitoring program to meet regulatory expectations and ensure study quality.
Understand unique capabilities. Some Chinese CROs offer specialized capabilities and access to research models that may be difficult to find elsewhere.
Documentation is critical. Ensure all necessary documentation is maintained in English, even though operations may be conducted bilingually.
Consider your regulatory strategy carefully. For submissions to different regulatory authorities, understand how Chinese CRO data will be accepted and what additional certifications might be needed.
Originally from Finland, Harri holds a veterinary degree and a PhD in toxicology. He began his career at AstraZeneca, where he worked as a toxicologist in Sweden and Canada. He focused on IND-enabling studies and first-in-human trials and has been involved in more than 30 IND submissions.
In 2012, Järveläinen moved to China to work with a major pharmaceutical company of 30,000 employees. Since 2015, he has operated as an independent consultant, expanding his expertise to include operational and CMC consulting. His experience includes successfully leading an academic startup through to the NASDAQ listing. Recently, his work has focused on auditing, qualifying, and monitoring Chinese CROs and CRO selection for Western companies. He maintains residences in both China and California, allowing him to bridge the gap between Western pharmaceutical companies and Chinese CROs.
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