Government initiatives could give a further boost to the current boom in outsourcing clinical trials to India, a new report predicts.
The report by professional services provider KPMG and the Confederation of Indian Industry (CII) notes that the government is considering a recommendation from its Drug Technical Advisory Board earlier this year to allow Phase I trials of drugs discovered outside India.
Although the country revised its Schedule Y regulations on clinical research in 2005 to bring them into line with international standards and eliminate ‘phase lag’ – whereby, for example, a company could only conduct Phase II of a global trial programme in India once that phase had been completed in other markets – Phase I, and particularly first-in-human, trials have remained a sticking point.
There is the possibility of submitting Phase I data from another market to the Indian authorities and then repeating these studies in India, but clearly this is not the most practical or economical solution. Otherwise, Phase I trials are only permitted in India if the drug was discovered locally.
Unsurprisingly, the bulk of clinical trials performed in India are Phase II and III, notes the KPMG-CII report, Indian Pharma Inc – A Continuing Success Story. Extending Phase I trials to drugs discovered outside India would enable the local contract research industry “to provide a wide range of drug discovery services”, it comments.
Tax exemption
Another, more concrete step forward on the regulatory front is that the Indian government is trying to promote the growth of the contract research and clinical trials industry by providing a tax exemption on its services, the report points out. It says contract research offers significant opportunities for the Indian pharmaceutical industry, “which is becoming a global R&D hot spot for innovator pharma companies”.
The global contract research opportunity was worth US$14 billion in 2006 and is expected to reach US$24 billion by 2010, the report points out.
Another driver for the contract research sector is the wider growth of the pharmaceutical industry within India. Over the last couple of years the Indian industry has advanced at around 1.5 to 1.6 times the rate of the local economy, the report notes. From 2002-2007 the industry showed a compound annual growth rate of 13%, while in 2007-2011 its CAGR is expected to accelerate to 16%.
Moreover, with India’s new product patent regime in place, research and development spending by Indian companies has increased significantly, now accounting for as much as 7-9% of sales among the leading players. By 2015, patented drugs are expected to make up 10-15% of the domestic pharmaceutical market.
