It’s not a rare occurrence in India that regulators fail to enforce the law, which eventually results in a knee-jerk tightening of rules that ends up stifling business. So when you get to know that a business that could have become really big is dying even before it has attained any state of maturity, the reason behind it is not surprising.
Not too long ago, foreign pharmaceutical companies were warming up to move clinical trials to India as it is not only cheaper to conduct trials here but you also have the advantage of a huge diverse patient population to carry out the tests. Local companies were hoping to cash in on outsourced trials and a handful of them were even conducting their own trials. Now, that business is dying an untimely death because of a change in regulation. As
a result, not just foreign pharmaceutical companies but even local players are having to move trials overseas and incur higher costs. Companies are crying foul, but nobody seems to be listening.
Ideally, the situation can be rescued if the regulator puts in a framework to ensure fair play for patients on whom trials are conducted. The only tricky part is determining compensation for side-effects on those participating in the trials. In India, where the legal route is almost inaccessible and prohibitive for the common man and where regulators have seldom been effective in weeding out unscrupulous elements, ensuring that the lives of those participating in the trials are not taken for granted is vital. For now, though, many research-focused pharmaceutical and biotechnology companies are going back to the drawing board and that forms the cover story of this issue of Outlook Business.
The other stories in this edition include Tata Power, which is embracing smart grids to make the power supply chain more efficient. Also included is an investment call on Karnataka Bank, which gets mentioned as a merger and acquisition candidate every now and then. The bank management believes that this is no more than idle market chat. To read more, go here.