NCPA - National Center for Policy Analysis

India Emerges as New Drug Proving Ground

February 19, 2004

Western drug companies are bringing a new form of outsourcing to India: clinical trials on the country's more than one billion potential patients. India's huge population allows new-drug studies to be completed much faster, say experts.

Beyond the sheer size of the population, India offers clinical researchers other distinct advantages: The population is genetically diverse. Every disease, from tropical maladies to "lifestyle" ailments, is present. There are also plenty of English-speaking physicians and nurses, some of whom are familiar with international clinical-trial practice.

Perhaps most importantly, clinical trials in India are considerably cheaper:

  • Phase I (normally tests on small groups of healthy humans) clinical trials have an average cost of $20 million in the United States; in India, they cost 50 percent less.
  • Phase II (tests on individuals afflicted with the condition for which the drug was developed) clinical trials have an average cost of $50 million in the United States; in India, they cost 60 percent less.
  • Phase III (tests on large groups of afflicted patients) clinical trials have an average cost of $100 million in the United States; in India, they cost 60 percent less.

The result is that India is garnering attention from Western companies looking to contain rising research-and-development costs for new drugs. For U.S.-approved drugs, such costs averaged $900 million per drug in the 1990s.

Last fall, the Indian government added to the allure by removing a regulatory barrier to performing more clinical trials there. And next year, India will adopt a stricter, Western-style patent regime, long a demand of large global pharmaceutical companies.

Source: Joanna Slater, "India Is Emerging As Proving Ground For New Drugs," Wall Street Journal, February 19, 2004.

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