IN A northern suburb of Bombay, in a garden township billed by its designers as the Switzerland of India, Vasudeo Ginde is in his laboratory analysing patient data so that the world’s big pharmaceutical companies can get products to market more quickly.

An experienced clinical researcher who started his career with Eli Lilly, he is among a new breed of technicians responding to a global call for low-cost human drug trials at internationally regulated standards. This is outsourcing with a twist. The cheap “workers”, one of India’s main selling points, are not required to input data or answer phones, but to donate themselves to medical science by testing drugs.

Clinical research outsourcing (CRO) is a young industry worth about $118 million (£63 million) a year, but it is growing fast. Analysts predict that it will be worth $380 million by 2010 as American and European companies look to India to cut the cost of drug development. With costs ranging between $800 million and $1.2 billion from patenting to approval, reducing the length of expensive research means more time to sell the drug before the patent expires and it can be copied by others.

“It’s not so much that India has a cost arbitrage,” Dr Ginde, managing director of iGate Clinical Research, a Nasdaq-listed company, said. “It is that India can save significant time to market. You don’t know what is going to be a blockbuster when you launch a drug. But even if you save three months, that might mean $100 million or $50 million in sales — in which case, it is worth it.”

Most of the big pharmaceutical companies, including AstraZeneca and GlaxoSmithKline, conduct drug trials in India — which is why Ernst & Young has chosen Bombay as the place to launch its global pharma report today.

“It demonstrates the growing importance that India is playing in the sector,” Utkarsh Palnitkar, head of the firm’s Indian pharma practice, said. “It is becoming a significant player in R&D initiatives, manufacturing and licensing as well as clinical trials. The big European companies have subsidiaries here, but now they’re looking at how better to leverage the India advantage.”

India, though, represents a tiny percentage of worldwide clinical studies. Even Pfizer, which with Eli Lilly in the mid-1990s was the first to build a significant presence, still carries out most of its trials in the United States, Western Europe and Japan. India accounts for just 5 per cent. But multinationals are expected to invest further as they gain increased confidence in India’s infrastructure and regulatory framework. A key moment came in 2005 when India signed the General Agreement on Tariffs and Trade, for the first time recognising global patents.

With the concern that generic drug makers would simply copy their product through reverse engineering, pharmaceutical companies shied away from India, except for very niche or cutting-edge techniques that were hard to replicate or not worth the bother. With that fear lifted, the door to the market opened.

As a source of trials, India already holds some trump cards over other emerging nations, where costs can also be 50 per cent cheaper than in the West. An obvious one is that English is widely spoken, with medical records less likely to be misinterpreted. Also, hospitals are run on international lines and staffed by many British and American-trained doctors.

Yet India’s biggest advantage is sheer numbers. While it is increasingly difficult to recruit people into clinical trials in the developed world, there are 1.1 billion in India, many of whom have never tainted their bodies with chemicals.

The image of poor, ill- educated Indians being used as guinea pigs for profit-making Western corporation is an uncomfortable one, but Dr Ginde insisted: “Medical research law is strong and it clearly demands that the doctor has the responsibility to get consent. That is true anywhere in the world. The patient can make a decision for himself.”

As yet, there is no centralised ethics committee, which means that the process is less robust than it might be. This failing is being addressed, but it will take time. There is a moral policeman in the form of the Drug Controller General of India, but he is hamstrung by bureaucracy. The approval waiting time in India is three months, compared with 30 days in America. There are an estimated 60 to 80 ongoing clinical trials while the US Food and Drug Administration is granting manufacturing and marketing approval for products from India.

The opportunity is there, so long as this kind of outsourcing does not suffer the crisis of integrity that has damaged the image of call centres. “If any of us CROs drops the ball, it will give the industry a bad name in this country,” Dr Ginde said, “but all the players here have serious intent.”

Drug testing process

Phase I (15 to 30 people): experimental treatment to healthy people
Phase II (less than 100): preliminary tests of patients with the relevant disease/condition
Phase III (100 to 1,000s): pre-approval tests to assess dosage effectiveness and safety
Phase IV (100 to 1,000s): after approval to monitor long-term effects

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