Though the Indian clinical research industry has slowed down due to various factors, it holds huge potential for growth if the government provides sufficient incentives and takes confidence building measures opines industry experts.
Began with great expectations in early 2000, the clinical research industry in India had witnessed many ups and downs and in the aftermath of global economic winter, the industry today is facing unprecedented slowdown.
Despite various hurdles, India still holds enormous potential for conducting global clinical trials as the country is blessed with a large treatment-naive population, availability of English-speaking, skilled doctors, plenty of clinical material and cost savings in conducting trials.
However the industry’s growth can be accelerated by removing existing bottlenecks at various levels. Some of the significant challenges include lack of formal training in bioethics and research methodology, heavy burden of clinical duties and sub-optimal administrative support restrict investigators.
Absence of oversight of functioning of ethics committees (ECs) and lack of mechanisms for ensuring quality of ethics review heighten societal concerns about safety of participants. Conducting research on issues not relevant to local needs and failure to ensure post-trial access further enhance society's cynicism. These issues need to be tackled through capacity building, training of investigators and EC members, strengthening of EC functioning and encouraging greater community participation.
On the one hand India is looked up on as a growing market that offers ample facilities and a vast population for conducting clinical trials and innovative research, on the other slow approvals by the government and stringent regulatory control has hampered the confidence of clinical trial investors in the country.
Though the capabilities and expertise of Indian scientists are on par with the highest international standards and the clinical trial data from India is accepted at major conferences and by refereed journals, the latest developments regarding weak intellectual property protection laws is a cause for concern among foreign pharmaceutical companies.
In spite of large pool of English speaking professionals and international standard improvements in the health-care infrastructure, the delayed approvals and unreasonable restrictions by the government and regulatory bodies seems to be hampering the growth of clinical trial industry in the country. Of late, with the activism of media, judiciary and regulatory bodies, it can be said that almost 90 per cent of clinical trial industry in India has slowed down.
According to Dr C Raghu, chief cardiologists and director of Prime Hospitals, the clinical trial industry is witnessing a down trend as investors are shifting their focus to other liberal destinations like China, Turkey and Malaysia. At present, China is leading the clinical trial industry in the world followed by Turkey and Malaysia. These destinations are having liberal regulatory system and the government is also encouraging the pharmaceutical, biotechnology industries to invent and discover innovative drugs and procedures for treating patients suffering from deadly diseases like cancer and AIDS.
When the western world was hit by economic recession, many businesses in the west had turned their attention towards low cost destinations like India and china. Since drug manufacturing involved intricate procedures and regulatory approvals which involved huge costs, pharmaceutical companies in USA and EU in order to cut down their costs, outsourced their processes to India.
In this scenario India could attract huge investments in clinical trials in the initial days. However during the past few years since 2008, the scene slowly changed and today the clinical trial industry in India is facing a challenging time and witnessing a downward trend as investors are fast shifting their focus to other liberal destinations like China, Turkey and Malaysia, says Dr C Raghu, director of Prime Hospitals in Hyderabad.
According to a 2009 report by consultancy, Ernst and Young (E&Y) and Federation of Indian Chambers of Commerce and Industry (Ficci), India’s clinical trial market was valued at more than $300 million with a compounded annual growth rate of 30 per cent.
Until 2004, the entire world focused towards India for investments in clinical trials, as the country offered huge patient pool with different profiles of diseases. Moreover the cost of drug trials is also less compared to the western countries. For instance, clinical trials for a standard drug in the United States can cost about $150 million. A similar drug could be tested in India at 60 per cent reduction of that cost.
The officials from Indian drug industry opined that if liberal regulations were allowed, the clinical trials industry could cross more than $ one billion mark by 2015. At present, India is seeing a decline in the number of human trials because of time-consuming government approvals and rising allegations of unethical tests further hindering possibilities of gathering a large sample size of people.
Out of 118,804 human clinical trials in 178 countries, less than 2000 or two per cent, are being done in India compared to 9352, or eight per cent, in neighbouring China. Though India was seen among the fastest growing clinical research destinations in the world, since human drug trials were not monitored closely, it gave rise to several unethical practices. This forced the Indian government to strengthen regulations in this area. Now it takes drug makers several months in India to get a nod for conducting clinical trials.
Initial boom
Initially the Indian clinical trial industry had boomed with an approximate annual growth of 15 per cent. This was mainly possible due to the Indian government offering incentives to promote local pharmaceutical companies and attract foreign firms. For example, there was a tax exemption on all profits for companies that conduct in-house R&D. Moreover India aimed to create an independent drug regulatory authority that would emulate the U.S. Food and Drug Administration within the next two years. As part of this the government was taking cognizance of all the developments in the industry and accordingly evolving its regulatory system and taking up strict actions on violators of regulatory norms during clinical trials, which have slowed down the pace of clinical trials in the country.
In fact initial incentives had coaxed many multinationals to invest in India or collaborate with the Indian partners which buoyed the Indian industry. For instance during 2004 GlaxoSmithKline conducted several trials in India. Pfizer doubled its clinical research investment in India to roughly $13 million and planned to invest another $30 million for over next five years.
Though the investment is a fraction of Pfizer’s total global R&D spends of $8 billion, it revealed the optimism and intentions of positive growth.
On the downside, IP protection in India has been weak and currently the country does not permit foreign companies to conduct phase one clinical trials, though both are likely to change in the near future. There are some bureaucratic headaches as well.
The global scenario
Until global economic recession, almost all the pharmaceutical companies enjoyed healthy margins and little appetite for risk have kept most pharmaceutical companies close to home except their manufacturing activities. But as financial pressures increased, pharmaceutical executives preferred going offshore which was less risky than it once was but also too attractive to ignore. This is especially true for conducting clinical trials, which can account for two-thirds of the cost of developing a new drug.
The leading global pharmaceutical companies conduct the majority of their clinical trials in familiar territory, with most trials taking place in the United States and Western Europe. Those highly touted, low-cost countries that other industries favour were still on the outer-edges of the pharmaceutical industry's radar. In August 2005, among the top 12 pharmaceutical companies, it was reported that 175 ongoing trials were performed in Germany and 161 in the United Kingdom, but only 26 in India, 24 in China, and five in Russia.
Though there are many factors that determine the place of conduct of clinical trials, the western world has not ignored the emerging markets like India, china and Brazil. “As the western world is looking at India for investing in the clinical trials, the government should encourage the Indian entrepreneurs to catch up with the early opportunities and provide incentives to encourage more entrepreneurs in this field. This will not only help in discovering new drugs but also enable availability of complex and advanced treatment facilities within the country at affordable prices,” says, Krishna Prasad, CEO and Director of Cito Healthcare private Ltd.
In the year 2005 a Country Attractiveness Index was prepared by A.T. Kearney for clinical trials, where 15 offshore locations were evaluated as the favoured destination based on five key factors like patient availability, cost efficiency, relevant expertise, regulatory conditions and national infrastructure.
The countries were selected based on either their popularity for current trials, such as the United States and the United Kingdom, or their potential attractiveness as an offshore location, such as China and India. Using the data to compare the relative attractiveness of low-cost countries, China, India and Russia had emerged as the most favourable destinations.
But of late, India’s position has been drastically going down as preferred location for clinical trials. China still holds the top slot, with Turkey Malaysia and other countries like Brazil moving up the ladder as the best preferred zones for clinical trials.