SC Order On Clinical Trials May Not Impact Indian Pharma Firms

Following the approval of the New Pharma Pricing Policy, multinational companies (MNCs) in the pharma space seem to have no breather. On January 3, 2013, the Supreme Court ordered that all clinical trials should be done under the supervision of the Union Health Secretary. The court has said that these unregulated trials have caused “havoc”. The apex court has also revoked the powers of the Drugs Controller General of India (DCGI), which has been a nodal agency for monitoring clinical trials in the country. The court's orders come after a petition was filed alleging that clinical trial mechanism treated Indians as guinea pigs.

The Indian clinical trial industry has been on the ascendant after the introduction of the patent protection law in 2005. Many MNCs have opened their clinical trial centres in the country. India has a vast pool of patients but does not have laws to regulate clinical trials.

In order to find out impact of the court order on the Indian pharmaceuticals industry, we spoke to an industry expert, who said, on condition of anonymity, that domestic pharma companies will not be impacted by the new regulation as they are not greatly involved in the business of clinical trials. Also, clinical trials are not required when launching a drug in India, unless it is for an entirely new drug. (In contrast, clinical trials are a must to launch a drug in regulated markets like USA. For drugs launched in the regulated markets, while the earlier stage of clinical trials can be carried out in India or other countries, the later stages (efficacy study) are required to be conducted in that particular country.) The expert also added that MNCs are already moving out of India to other Asian countries like Indonesia, Thailand, Sri Lanka, etc for clinical trials.

One impact of the court order is that the reimbursements for patients undergoing clinical trials may increase. One would expect some rise in the expenditure of companies on this account. However, since not many Indian pharma companies are in this business, we may not see any significant negative impact on the sector.