The days of the Raj are long gone, but multinational corporations are riding high on the trend
toward globalization by taking advantage of India's educated work force and deep poverty to turn
South Asia into the world's largest clinical-testing petri dish.The sudden influx of drug companies
to India resembles the gold rush frontier, according to Sean Philpott, managing editor of The
American Journal of Bioethics.
"Not only are research costs low, but there is a skilled work force to conduct the trials," he said. In
the rush to reap profits, Philpott cautions that drug companies may not be sensitive to how
poverty can undermine the spirit of informed consent. "Individuals who participate in Indian
clinical trials usually won't be educated. Offering $100 may be undue enticement; they may not
even realize that they are being coerced," he said.
For decades, pharmaceutical research in India didn't rely on clinical testing. Scientists mostly
reverse-engineered drugs already developed in other countries. But in March, everything
changed when India submitted to pressure from the World Trade Organization to stop the practice
and implement rules that prohibit local companies from creating generic versions of patented
Now, pharmaceutical companies can rest assured they won't lose profits to a domestic market,
and India is suddenly a profitable location for performing the expensive tests required for Food
and Drug Administration clearance of any drug. Though it is still too soon to tell how much the
legislative change has boosted drug development, observers say the number of studies
conducted by multinational drug companies has sharply increased since March.
Given the rising cost of drug research in the United States and Europe, more and more drug
companies are conducting clinical trials in developing countries where government oversight is
more lax and research can be done for a fraction of the cost. According to a 2004 study by Rabo
India Finance, a subsidiary of the Netherlands-based Rabo Bank, clinical trials account for more
than 40 percent of drug-development costs. The study also found that performing the studies in
India can bring the price down by about 60 percent.
By 2010, total spending on outsourcing clinical trials to India could top $2 billion, according to
Ashish Singh, vice president of Bain & Co., a consulting firm that reports on the health-care
Regardless of where clinical trials are performed, the FDA requires the same evidence showing that a drug is safe and effective before it will approve any drug, according to a written comment from Ken Johnson, senior vice president of The Pharmaceutical Research and Manufacturers of America Foundation.
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