In spite of the recent bad press the clinical trial market has received, a research report says a positive change is taking place with the country being viewed as a drug discovery destination, and the market likely to cross $1 billion by 2016.

According to a recent Frost & Sullivan report, the domestic clinical research organization (CRO) market was worth $485 million in 2011, but is set to cross $1 billion-mark by the turn of 2016.

The report says that the large, easy-to-access, treatment-naive population, high degree of available cost arbitrage of up to 30-50 percent over the US, and an improved regulatory environment is driving the domestic CRO market, which is growing at 11-13 percent.

Recently, the media was awash with reports of a large number of deaths due to clinical trial-related reasons, and the poor compensation being paid out by companies responsible.

As many as 438 lives were lost in 2011 during clinical trials, however only 16 deaths due to the serious adverse events (SAEs) of the drugs being used were recorded, according to information given by Union Health Minister Ghulam Nabi Azad last week. Average compensation paid in 2011 was a paltry Rs 2.2 lakh.

Ghulam Nabi Azad had admitted that the alarmingly low-level of compensation could be due to the absence of proper compensation rules but added that the ministry will come out with new regulations on the same soon.

The domestic CRO market is dominated by multinational pharma companies. While the MNCs are into global trials, domestic drug companies usually look at conducting local trials.

“Therapeutic areas in which research can be conducted here are varied, and this is likely to result in more number of studies in the country,” says the Frost & Sullivan report, adding “emerging areas, such as diagnostic research, are also expected to drive the domestic CRO market.”

However, increasing competition, quality concerns and lack of quality infrastructure in smaller cities are some factors that impede the growth rate of the CRO market.

“Consumer confidence in the clinical trials data is lacking, greatly impacting the CRO market. This is due to the fact a number of small-scale CROs having compromised on the standard of their studies in their bid to compete,” report said.

“Developing a single-window clearance for clinical trials as well as clear guidelines on the types of international/global trials that can be performed on Indians will shore up the market growth,” notes the report.

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