India losing out on clinical trial biz pie

Written by Soma Das | New Delhi | Updated: Jul 9 2012, 08:43am hrs
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Indias standing as an emerging global hotbed for clinical trials of new drugs is clearly on the wane. Given regulatory uncertainty, loss of critical lead time and the perceived risk of data leakage, not only foreign drug majors but even domestic firms are increasingly opting to conduct these trials in other countries.

So much so that there is hardly anyone to bet on high growth of Indias clinical trials market any longer. According to projections made a decade ago, this market was to be around $2 billion by 2010-12, with a growth rate of over 35% between 2006 and 2010. The current market size is just $400 million and the growth is flat, if anything.

Indian drug firms with new drug research programmes such as Sun Pharma, Dr Reddys Laboratories and Glenmark are preferring to conduct their early-stage clinical trials in overseas destinations like Canada and European countries the UK, Netherlands, Germany and are even exploring opportunities in China, according to industry sources.

This is despite the fact that trials in India are around 40-50% cheaper than in tightly regulated markets such as the US and Canada, and recruitment of patients in trials here is estimated to be four to five times faster. The diversity of India's gene pool used to be another reason touted by analysts who had seen India emerging as a major clinical trial destination.

We had debated in detail the merits of doing our early trials here. But we decided against it by learning from the experience of our peers who have attempted that, an executive with the drug research unit of a drug firm said, on condition of anonymity.

On the face of it, drug firms give other reasons for the shift. They say they want to launch the drug first in the regulated markets or out-license the new drug molecule to another research-driven pharma company at a later stage in clinical research. But they may not be telling the full story. Industry sources, clinical research organisations (CROs) and officials working in new drug research units of domestic pharma firms admit in private that drug firms are wary of the uncertain regulatory environment and dread to risk losing precious time while dealing with the drug regulator here.

As far as foreign drug companies are concerned, China, South Korea and Malaysia are becoming the preferred destinations for clinical trials.

Domestic companies are preferring to conduct their early trials in countries such Canada and China mainly because of the prevailing regulatory uncertainty here. Once you have filed an application with the drug regulator, you have no idea how long it may take to get approval for trials here. In early trials, time is money since many other companies across the globe are doing similar drug research. Lack of technical competence, improper confidential data management, misplacing of files and absence of a delegation system when an officer in charge goes on a leave is delaying the approvals inordinately, said Mita Nandy, senior vice-president, LG Life Sciences.

Another CRO says that a fertility drug application landed up on a urologists desk for clearance while a breast cancer drug was sent to a haematologist for expert opinion.

Also, since pharma companies typically obtain patents for their new drug molecules (which last for a fixed duration depending on the geography) before they start filing for clinical trials, delay in approvals may reduce the time when they get to market these drugs exclusively without competition from generic firms.

During early trials, pharma companies like to work in close collaboration with regulatory agencies, understanding their expectation. The common practice of periodic consultation with drug regulators during clinical trials in developed countries provides guidance to pharma companies in their drug research process. There is no such provision in the Indian regulatory structure, said Bart Janssens, partner, Boston Consulting Group (BCG). Janssens added that since the number of subjects needed to be enrolled in early trials typically remains low, say, within 25, these companies feel cost differentials can be neutralised by gaining on the side of time.

While till 2008, India and China both got similar number of new trials, this equation has drastically altered as BCG estimates that in 2011, India managed one new trial for every two trials that China got. This is also reflected in the sharp dip of new trials started in India in 2011. In 2011, the number of new trials in India plunged to 169 from 254 in 2010 while it hovered between 234 to 260 between 2007 to 2009. Janssens pointed out that policy turmoil and other regulatory hurdles including difficulties in exporting blood and tissue samples out of country remain significant roadblocks. It is hardly surprising then that all projections made in early 2000 forecasting Indian clinical trials market to touch $1-2 billion by 2010-12 by clocking growth rate of over 35% between 2006 and 2010 have fallen flat. The current market size, valued at $400 million, is struggling to maintain a flat growth here.