India and China need to complement each other in the area of clinical trials to increase the opportunities in the research outsourcing space. Current value of off shored R&D moving to India and China is estimated at US$0.500 billion where India accounts for US$0.125 billion and China US$ 0.375 billion.

With increased cost cutting on one hand and rising costs of drug development on the other, the global drug majors have now realized that it would be far cheaper to outsource this expertise. Now international drug companies will need to make the best of the situation by opting for pre-clinical studies in China and heading to India for the phase-II and III, Rishikesh Mandilwar, director, Zinnov Management Consulting Pvt Ltd told Pharmabiz.

Early last year, the State Food and Drug Administration (SFDA), China issued a new policy on the pre-clinical development of new drug products. This has made it mandatory for China to adhere to good lab practices (GLP) during pre-clinical and phase-I studies.

India has the proven expertise in phase-II and phase-III human trials. Currently, there are 644 phase-II and phase-III trials going on in India, generating revenues to the tune of $200 million and slated to garner $608 by 2012. The sector is estimated to be registering a CAGR of 31 percent annually.

"The only way for the two countries to make the best of the situation in clinical trials will be to get together in the segment, informed Mandilwar.

The factors favouring India are the cost of phase-II and phase-III trial estimated to be least 60 percent cheaper than the developed world. The country is already part of multi centric global trials. There is availability of large drug-naïve patients pool ranging from multiethnic to multiracial backgrounds. India has about 700,000 hospital beds which along with more than 200 medical colleges makes it an attractive location.

In 2006, China's pre-clinical development market was valued at US$ 2.5bn., according to an analysis on the Pharmaceutical Offshoring Landscape by Zinnov Management Consulting.

In 2007, clinical research constituted 64.3 percent of the total drug development initiatives outsourced from in India. However, the country's regulatory authorities need to aggressively increase stringency in trial site inspections and introduce close monitoring of the locations identified for the human studies and the have regular audits on the operations of the ethics committee. If the efforts by the government of India to allow phase-I clinical trials for the drugs discovered abroad come through then India should ensure that it should not lose to China in this segment. The country should make a strong bid to attract the business opportunities by providing even higher efficiencies in the areas of cost, quality and delivery timelines.