Introduction

The Drugs Controller General of India (“DCGI”), the executive arm of Central Drug Standards Control Organization (“CDSCO”) under the Ministry of Health and Family Welfare, which is responsible for regulation of drugs in India, has reportedly announced (“Announcement”) that new clinical trials will not be granted permission for at least next two months, until a new regulatory regime for conducting clinical trials (“New Regime”) is put in place.1 The Announcement comes in the wake of a remark of the Supreme Court of India, made while hearing a public interest litigation2 filed by a non-governmental organization (on the ground that “illegal clinical trials must be stayed”).3

Since the Announcement has roots in the aforementioned public interest litigation, we have examined the facts in some detail before analyzing the repercussions of the Announcement.

Background

In January, 2012, a writ petition was filed before the Supreme Court of India (“the Court”) by Swasthya Adhikar Manch (“SAM”), a non-governmental organization (“NGO”)4, against the Ministry of Health and Family Welfare (“MoHFW”), Government of India, alleging several flaws in the regulatory framework surrounding clinical trials in India. The writ petition was later joined with a separate writ petition filed by Bhopal Gas Peedit Mahila Udyog Sangathan (“BGPMUS”), another NGO, alleging that flaws in the regulatory framework connected to clinical trials had led to exploitation of the civilian population. The two petitions are now being heard together (the petition filed by SAM and by BGPMUS collectively referred to as the “Petition”). The aforementioned remark of the Supreme Court was made in the fifth hearing of the case. The following table summarizes the important developments in the case till date:

Click here to see table.

It is noteworthy that this matter case coincided with the publication of the Department-related Parliamentary Standing Committee on Health and Family Welfare’s Report on the Functioning of the CDSCO on May 8, 2012, which made scathing remarks on regulatory control over the conduct of clinical trials in India, especially in the case of new drugs. It had, inter alia, found that the approvals to clinical trials had been granted without adhering to the provisions of Schedule Y of the Drugs and Cosmetics Rules, 1945 (the “Rules”).

Impact

As per the Announcement, no new clinical trials will be permitted to be conducted in India for at least two months from January 22, 2013 (“Effective Date”).

To begin with, such an announcement has further paralyzed already crippled clinical trials industry in India as a whole, which showed a radical attempt at tightening the surveillance over clinical trials over the past couple of years. In the following table, we have captured important regulatory developments connected with clinical trials in the past couple of years.

Click here to see table.

Since the Announcement does not cover suspension of the existing clinical trials, it appears that such trials will continue to be conducted as per the existing rules. However, the Announcement could bring the existing clinical trials under cloud as these developments may raise concerns about adequacy of existing rules and regulations and the uncertainty on proposed new rules being made applicable to the ongoing trials. As it is, the constant activity at the drugs regulators’ end to publish draft amendments to the existing legislation with no certainty on when they will be implemented, has raised several concerns in the industry. Streamlining the entire process in a balanced manner (that is, creating a fine balance between the sponsors and the CROs/institutions in India) and bringing further clarity to the existing legislation may, perhaps, lead to better implementation and adherence to the laws/rules/guidelines while conducting clinical trials. 

  1. Impact on Local Manufacturers: The Announcement is likely to hit Indian domestic manufacturers of new drugs who intend to begin conducting clinical trials in India. This may lead to severe economic costs such as cost of delay on payment made to third parties in expectation of the permission to manufacture or delay in recouping all the costs incurred for manufacturing the drugs etc.
  2. Impact on Foreign Manufacturers of new drugs: The impact of the Announcement on local manufacturers of new drugs applies equally to foreign manufacturers of new drugs who intend to launch their drugs in India. All new drugs intended to be launched in India have to mandatorily undergo Phase III trials in India. If the DCGI does not approve Phase III clinical trials for the announced duration, then the foreign manufacturers may not be able to apply for permission to market and sell the new drug in India.
  3. Impact on contractual parties in a clinical trial: All CROs, Sites (Hospitals) and Principal Investigators (“Parties”) carrying out clinical research in India on behalf of a manufacturer (commonly called Sponsor) may have to revisit their contracts and arrangements with the Sponsor.

Silver lining on a Dark Cloud

This is a testing time for the Indian clinical trial industry. One way to look at the Announcement is to view it as possibly the final nail on the coffin for the clinical trials industry. The other way is to look at it as the final frontier. Once the DCGI comes up with the New Regime and the regime gets an approval of the Supreme Court of India, it will bring a great amount of public confidence and stability to the industry with the clarity in law which it has been yearning for a long time.