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Clinical Trial Regulations in India (Part 2): Identifying Risks

Although India has made adjustments to match global clinical trial regulation standards, the country still has some work to do. Several grey areas still need to be addressed. In some cases, regulatory authorities are the solution. Other issues require industry practices derived from trial and error. This unfortunately raises significant risk and liability questions. Clinical trial regulations in India have some common concerns that are outlined below.

Regulation Issues: Exploring the Gaps

One primary concern faced by foreign sponsors is the extreme shortage of regulatory expertise. Unlike the FDA and the EMA, the Central Drugs Standard Control Organization (“CDSCO”) doesn’t release guidance documents. These documents typically provide a current interpretation of applicable regulations. The regulations described in Clinical Trials in India – Regulatory framework and the early years are meant to be generic. Because of this, their interpretation is highly subjective and based upon regulatory consultants’ experience. 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 three main differences. First, the composition of the ethics committee (“EC“). Second, informed consent procedures and compensation for participation. And third, the roles and responsibilities of foreign sponsors conducting clinical trials in India. Several CROs carry out tests on behalf of sponsors, but some lack adequate infrastructure and knowledge. As a result, it’s critical to carry out appropriate due diligence before appointing a CRO.

Liability Risks for Clinical Trials: the Human Factor

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

In 2013, the Supreme Court of India directed the DGCI to reexamine 167 clinical trials approved in the past. They were required to amend the regulatory mechanism to ensure patient safety. This followed public interest litigation filing 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. While the rules were safeguards, they were unrealistic and untenable. The most controversial change required financial compensation for all subjects in clinical trials who experienced adverse events. This was 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. This is from improper disclosure, conflict of interest, violation of GCP, and injuries 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, litigation awareness is undoubtedly increasing among patients. Furthermore, various nonprofit organizations 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 drugs that are protected under patents in other parts of the world but not in India. The country still needs to build an intellectual property framework. A framework is needed that will allow it to become a global leader in life sciences and biomedical innovation.

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

All the above begs one question. How can a foreign sponsor deal with some of the risks associated with India’s clinical trials?

The Importance of an Iron-Clad Clinical Trial Agreement

It’s imperative to have a well-drafted clinical trial agreement. The agreement will allocate the risks and liabilities among the sponsor, the CRO, and the investigator institution. There are three situations where penalties are most likely to arise. First, due to a breach of informed consent rules. Second, adverse reactions resulting from study drugs. Third and finally, the investigator institution’s negligence.

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“). The DCA outlines the sponsor’s primary responsibility. It is to provide compensation for any physical or mental injury arising out of a clinical trial. Additionally, the sponsor may provide insurance coverage for any unforeseen damage.

What happens if an injury arises from 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. The CRO or the investigator institution may also insist on a contractual indemnity from the sponsor. This indemnity is for liability around study implementation. Such indemnity protection is obtained over and above any insurance coverage that’s taken by the parties.

How Insurance Plays a Role

Insurance plays a significant role in addressing liability concerns. Unfortunately, clinical trial-related insurance is not well developed in India. The common practice is that medical professionals receive coverage under professional indemnity insurance. 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 specific language in ICF. This language stipulates that the sponsor or the CRO will provide complete medical care and compensation for any injury suffered as a result of participation in a study. 

The question then becomes: Who would primarily be liable to compensate for 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 you should adequately address it in a tightly drafted and robust clinical trial agreement.

Mitigating Risks in Clinical Trials 

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

Read Part III of our blog series. Discover why current and proposed changes to the regulatory environment may boost the Indian clinical trial industry. 

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