India: Clinical Trials: Waking From Slumber?

Last Updated: 8 April 2014
Article by Neeraj Tuli and Celia Jenkins

In 2011 the size of the clinical trials business in India was estimated to have grown to c. $1.6 billion. The growth has been rapid, and some of the factors that are said to have contributed include the patent protection laws introduced in 2005, India's diverse gene pool and low costs. Some also point to the relatively low levels of compensation payable when all does not go to plan. The Supreme Court at least feels that all is not as it should be in the light of reports that almost 2,242 people have died in India during clinical trials.

Clinical trials are conducted by Contract Research Organisations (CROs) under regulation by the Central Drugs Standard Control Organisation (CDSCO). CROs conducting clinical trials are meant to constitute ethics committees at the location of the clinical trial. These committees must approve the proposed trials, monitor them, and be concerned for the protection of the rights and interests of subjects participating in the trials. These committees are not, however, regulated. There is also presently no requirement for insurance for the trial sponsors or participants.

In February 2012 the Swasthya Adhikar Manch, a NGO, brought Public Interest Litigation before the Supreme Court of India. The litigation names the Ministry of Health as a party and it alleges that illegal and unethical clinical trials are conducted on adults, children and mentally ill patients.

In January 2013 the Supreme Court observed that unregulated clinical trials had caused havoc to human life, and the Court reprimanded the central government for failing to take proper note of the legal and ethical ramifications of clinical trials. The Court said:

"You have slipped into deep slumber. It pains us that children of the country are being used as guinea pigs by the companies. You do not have even respect of the Parliamentary Committee which has said that the companies are running racket and you are showing just draft rules..."

The Court also criticised state governments for failing to penalise and punish erring medical practitioners.

Immediately thereafter the government announced that it would review the Drugs & Cosmestics Act 1940 and the Drugs and Cosmetic Rules, 1945 with a view to putting in place a proper regulatory structure for monitoring clinical trials and compensating victims. The new rules framed and notified by the Health Ministry envisage the compulsory registration of ethics committees and regular monitoring of clinical trials. Rules relating to compensation for injury and death have also been framed this will include payments for the immediate and long term medical treatment of injuries sustained, compensation for disabilities, and payments to heirs in death cases.

The government has also indicated that insuring study subjects of clinical trials is compulsory which will make clinical trial liability insurance compulsory for all sponsors of clinical trials. Reports suggest that the policy would also cover the CRO's liability. With these developments, it seems clear that the industry is going to witness a tighter regulatory framework than so far experienced.

Mr Neeraj Tuli is the Firm's Senior Partner. Before setting up Tuli & Co in 2000, Mr Tuli was a partner at Kennedys in London. Mr Tuli's contentious work and coverage advice ranges across a wide variety of policies including Trade and Credit, MD, BI, CPM, E&O, D&O, DSU, ALOP, EAR, and CAR. He has handled litigation and arbitration in India, London, Paris, New York, San Francisco, Hong Kong, Singapore and Papua New Guinea, and is currently managing claims on behalf of Insurers and Reinsurers in India, the US, Chile, the UK, Germany, Ireland, Finland, Italy, Japan, Kuwait, Dubai, Australia and New Zealand.

Mr Tuli also acts as an arbitrator and is currently appointed on behalf of one of India's largest public sector manufacturing and engineering companies in relation to 2 energy disputes with a Russian enterprise, where his co-arbitrators are both English QCs.

Mr Tuli is recognised as a leading lawyer for Product Liability, and a leading lawyer for Insurance & Reinsurance, India. He has been invited to be the first President of the Insurance Law Association of India being formed in association with British Insurance Law Association, and he is a member of the Confederation of Indian Industry's National Committee on Dispute Resolution.

Ms Celia Jenkins handles the Firm's non-contentious practice, and specialises in product development, regulatory issues and corporate and commercial work.

Ms Jenkins has been involved in drafting, vetting and advising on insurance contract wording and ancillary documentation across a range of business and product lines and has reviewed policies approaching 1,000 including ULIPs, term life, whole life, rural-oriented, health-oriented (for stand-alone health Insurers and life Insurers), personal accident, pension, gratuity, superannuation, leave encashment, travel, home contents, D&O, various E&O, marine/aviation liability policies, medical complications liability, POSI and trade credit.

Ms Jenkins also advices Insurers, intermediaries and third party service providers on structuring and drafting commercial arrangements, database/service provider payments, credit management, distribution channels management, rebating, and also on larger commercial issues such as re-structuring of existing joint ventures, entry strategies, investments in exchange traded funds and pension funds.

Ms Jenkins also assists Insurers and Insurance Intermediaries in dealing with disciplinary actions by the Insurance Regulator.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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