The global pharmaceutical industry spends about US$50 billion a year on research and development. Thanks to its growing expertise in clinical trials, Hong Kong is gearing up to take a larger slice of it.
A combination of global regulatory changes and growing local competency has catapulted the city forward. In 2004, 221 clinical trials were conducted in Hong Kong; by 2008, that had risen to 360, and the number has stayed about constant each year since.
Members of the Hong Kong Association of the Pharmaceutical Industry, which represents major drug companies, conducted 11 trials in 1999, 79 in 2006, and 123 in 2008. The biggest area for research in Hong Kong is oncology, taking up 28 per cent of trials at Hong Kong University and 24 per cent at Chinese University.
Endocrinology is next, followed by gastroenterology and hepatology, and cardiology.
Most clinical trials are undertaken by pharmaceutical companies looking to prove a drug's efficacy and safety before bringing it to market. To ensure independence, they are conducted by academic centres, which charge fees but usually don't make profits, and are closely supervised by an ethics committee.
"In the old days, most trials were done in the West," says Henry Yau, assistant registrar of HKU's Clinical Trials Centre based at Queen Mary Hospital.
"There were two reasons: because the industry was there, and drug companies like to do research in their home countries; and because a US company, for example, might not be able to do a trial overseas - if it wanted to sell a drug in Britain, for example, it would have to repeat the trials there."
That all started to change in the mid-1990s, when the International Conference on Harmonisation, a body that combines the medical regulatory authorities of the US, European Union and Japan, produced Good Clinical Practice, a quality standard for the regulation of trials.
It "made drug regulation a global business", Yau says, and at a stroke made international trials feasible.
Asia has been one of the main regions to benefit, in particular cities with developed health care systems and an international outlook, such as Hong Kong and Singapore.
Around 1998, Yau says Hong Kong suddenly started to get a lot of inquiries from pharmaceutical companies everywhere. Along with its equivalent at Chinese University, HKU's Clinical Trials Centre was born.
Over the past 15 years, it has undertaken more than 700 trials for pharmaceutical companies. About 60 or 70 new ones start each year, about 220 are ongoing and 50 more are being prepared.
Hong Kong enjoys a number of advantages in trialling pharmaceuticals: good medical education and a lot of highly qualified scientists, and a reputation for producing reliable, high-quality data.
There is also geographical compactness; wealth and a good education system - both correlated with a lower drop-out rate among trial participants - low taxes and a good legal system, with reliable contracts, and intellectual property respected.
It also has a high-quality public health care system that boasts perhaps the city's biggest advantage: a centralised system of patient records, in English, that covers 90 per cent of the population, and is the global gold standard.
Kim Lee, chief scientific officer in Hong Kong for Novartis Pharmaceuticals, says Hong Kong is the first place her company goes to for hepatology trials, and is also very high on the list for myopia, infectious diseases, multiple sclerosis and psoriasis.
"It's important that we look into diseases that affect people in Hong Kong," says Benny Zee Chung-ying, director of Chinese University's Centre for Clinical Trials based at Prince of Wales Hospital. "There are Asian diseases that we need to focus on."
With a condition such as nasopharyngeal carcinoma, which is 25 times more common among certain southern Chinese than almost everyone else, Zee says: "If we don't do anything, no one will. Big drug firms aren't going to do it for a drug that will only sell in southern China."
A Chinese University study led by Professor Anthony Chan Tak-cheung has changed global practice in treating NPC by establishing that chemotherapy in conjunction with radiotherapy is more effective than using radiotherapy alone.
Hong Kong's expertise in trials, however, is limited. More than half are phase three, with another quarter phase four and just 16 per cent phase two. Phase two is when the bulk of the work is done in establishing that it actually works; phase three confirms the findings of the first two phases; phase four makes sure that all is going as planned once the drug is on sale.
During the ultra-cautious phase one, the basic safety of the drug is tested. With its higher level of uncertainty and risk, this phase requires facilities that haven't been available here - until now.
In the 2011 budget, the government allocated HK$1 billion to a new Health and Medical Research Fund to finance phase one centres at the two clinical trial centres and both will be open for business soon.
"The most important thing in a phase one trial is understanding of risk," says Zee. "If there's no understanding of the value of the trial, it can be very dangerous. You have to have full understanding of the consent form. You have to explain the benefits and the risks - and for phase one, there's almost no benefit."
He says phase one is important to Hong Kong, particularly with the emergence of growing regional rivals such as Taiwan and South Korea, as it looks to position itself as a route into the potentially massive market over the border.
"In terms of the future in Hong Kong, early drug development is important. In China, recruitment is really fast, so you can easily do a big phase three trial there. So our role in Hong Kong is in phase one and two, and then you go to the mainland or wherever for phase three."
Hong Kong Association of the Pharmaceutical Industry executive director Sabrina Chan says the city needs to do more in this regard.
"The biggest priority to increase the number of trials in Hong Kong is being the gateway to China."
Getting drugs approved on the mainland can be complicated, she adds, with a clinical trial certificate from the State Food and Drug Administration taking about a year.
In Hong Kong, trial certificates take about three months, but the Hong Kong portion of a mainland trial will only be recognised if a certificate from the FDA is forthcoming.
"Efficiency is a competitive advantage of Hong Kong, and under this system, that advantage is not as big as it could be," says Chan.
With drug patents only lasting 20 years, a few months can make a big difference to a pharmaceutical company; Chan says the industry would like a mainland FDA-approved certificate issued in Hong Kong.
The other big issue, Chan says, is facilitation from the Hospital Authority. "After the certificate is approved, you need a lot of backup from the Hospital Authority: legal, research, nursing and so on."
But generally, the feeling is optimistic. The city's position as a clinical trials centre could be just starting to take shape.