This is the second in a three-part series on regulatory requirements for clinical trials in India.

Our recent article on clinical trials in India explained the regulatory framework for clinical research and touched on why change is on the horizon. Here we’re diving deeper into what the risks are and how to mitigate them.


Although India has made adjustments to match global standards in clinical trial regulation, the country still has some work to do. In fact, there are several grey areas that need to be addressed. In some cases, regulatory authorities need to be consulted or industry practices are required to be ascertained by trial and error—which unfortunately raises significant risk and liability questions. Below we outline some of the most common concerns.

Regulation issues: Exploring the gaps

One major concern faced by foreign sponsors is the extreme shortage of regulatory expertise. Unlike the FDA and the European Medicines Agency, the Central Drugs Standard Control Organization (“CDSCO”) doesn’t release guidance documents, which typically provide a current interpretation of applicable regulations. Because the regulations described in Clinical Trials in India – Regulatory framework and the early years are meant to be generic, their interpretation is highly subjective and based upon the experience of regulatory consultants. As a result, it’s not uncommon for several experts to come to different conclusions on the same regulation.

Foreign sponsors also face differences in the Indian Good Clinical Practices for Clinical Research in India (“GCP”) version of the International Conference of Harmonization GCP guidelines (“ICH GCP”). These include the composition of the ethics committee (“EC”), informed consent procedures and compensation for participation, as well as the roles and responsibilities of foreign sponsors conducting clinical trials in India. There are several CROs that carry out trials on behalf of sponsors, but some lack adequate infrastructure and knowledge. As a result, it’s critical to carry out appropriate due diligence of a CRO before appointing them.

Liability risks for clinical trials: the human factor

 In the last few years, India’s clinical trial sector rapidly lost its reputation due to reports of unethical practices, rampant corruption and inexperienced regulators with extremely limited resources to regulate the rapidly growing industry.

In 2013, the Supreme Court of India directed the DGCI to reexamine 167 clinical trials approved in the past and amend the regulatory mechanism to ensure patient safety. This followed the filing of public interest litigation by a nonprofit organization due to alleged trials-related deaths and serious adverse events.

The Indian regulators first declared a moratorium on all clinical trial approvals grinding the system to a screeching halt. It also added onerous processes for review of clinical trials. Intended to safeguard subjects, the rules announced were unrealistic and untenable. The most controversial change required financial compensation for all subjects in clinical trials who experience any adverse events, whether or not they were related to using an investigational drug.

This rule has since been loosened (as you’ll learn in our next installment of this series). Even so, all the stakeholders involved in conducting trials have significant exposure to liability on account of improper disclosure, conflict of interest, violation of GCP and injuries occurring due to the test drug. Generally, the soft targets for litigation are the investigator institutions and the company that sponsors the trial. While not many cases have reached courts in India, the awareness of litigation is certainly increasing among patients. Furthermore, there are various nonprofit organizations that continue to take up the cause of study subjects.

Intellectual property framework lags behind

While the rules were arguably made too restrictive, India’s intellectual property framework suffered from inadequate and inconsistent processes and enforcement, not to mention a sometimes-hostile attitude toward intellectual property protections, especially those relating to pharmaceutical patents. Some have criticized the policy because it appears to favor domestic manufacturers. The approach towards product patents in the pharmaceutical sector has led to significant efficiency in reverse engineering of drugs that are protected under patents in other parts of the world but not in India. The country still has a long way to go toward building an intellectual property framework that will allow it to become a global leader in life-sciences and biomedical innovation.

In addition, the new National Intellectual Property Rights Policy announced in May 2016 received mixed reaction from the domestic pharmaceutical and healthcare sectors. While national experts concede the government hasn’t succumbed to demands from global stakeholders for stricter patent regime, they believe the policy should be more robust to protect India’s generic drugs industry. The most contentious aspects of Indian patents regime—anti-evergreening of patents and a compulsory licensing requirement—haven’t been eased and this has been commended by the generics industry. It remains to be seen how the new policy translates to legislation and if it results in concrete steps towards making intellectual property protection more palatable to “big pharma” in India.

All the above begs the question: How can a foreign sponsor deal with some of the risks associated with clinical trials in India?

The importance of an iron-clad clinical trial agreement

It’s imperative to have a well-drafted clinical trial agreement to allocate the risks and liabilities among the sponsor, the CRO and the investigator institution. Liabilities are most likely to arise due to breach of informed consent rules, adverse reactions resulting from study drugs or the negligence of the investigator institution.

What’s the extent of a sponsor’s responsibility for compensation? That depends on the description of the study specified in the study protocol (“Protocol”) and the informed consent form (“ICF”). As per the DCA, the sponsor’s primary responsibility is to provide compensation for any physical or mental injury arising out of a clinical trial or to provide insurance coverage for any unforeseen injury.

What happens if an injury arises out of any act, omission, negligence or misconduct of the CRO or an investigator institution? Typically the sponsor covers itself by contractually obtaining an indemnity from either institution. At times, the CRO or the investigator institution may also insist on contractually obtaining an indemnity from the sponsor for liability arising out of administration of the study drug as per the Protocol. Such indemnity protection is typically obtained over and above any insurance coverage that’s taken by the parties.

How insurance plays a role

Insurance plays a significant role with respect to addressing liability concerns. Unfortunately, unlike in other countries, clinical trial-related insurance is not well developed in India. The common practice with respect to insurance is that medical professionals are covered under professional indemnity insurance coverage. But this insurance coverage does not protect medical professionals for compensation of claims related to their participation in clinical trials.

Recently DCGI has been instructing sponsors and CROs to include language in ICF that the sponsor or the CRO will provide complete medical care, as well as compensation for any injury suffered as a result of participation in a study. The question then becomes: Who would primarily be liable to compensate the study subject? Would it be the sponsor, the CRO or the investigator/institution in connection with the study? This liability allocation becomes critical and should be adequately addressed in a tightly drafted and robust clinical trial agreement entered into between the parties.

The bottom line

Sponsoring a clinical trial in India comes with risks, in part due to a somewhat inadequate regulatory framework. An iron-clad clinical trial agreement, as well as indemnities and insurance, can help mitigate those risks.

Coming up next in our series, we’ll explore why current and proposed changes to the regulatory environment may give the Indian clinical trial industry a boost.