Outsourcing Drug Trials

Outsourcing has become a well-tried practice in the global economy. Outsourcing manufacturing is a strategy that has become very widespread. Outsourcing services, illustrated by India’s call-centers, is more recent but has become common practice for many western multinationals. Even the more knowledge intensive services like accounting are now often being provided overseas. India currently is even becoming increasingly a recipient of outsourced R&D. Even waste management and recycling is outsourced nowadays.
But this article in Wired Magazine gave me another view on outsourcing, and one that increasingly worried me reading through the article. It is about a new outsourcing boom in South Asia: the outsourcing of drug trials. Drug trials in the West are becoming problematic because less people want to participate in the trials, the amount of drugs to be tested increases and because the trials generally take a long time:

Like many in the pharmaceutical industry, Narula (medical director of a contract-research firm that organizes trials for major multinational) believes that the solution to the slow pace of drug trials lies in outsourcing. As many as half of all clinical trials are already conducted in locations far from the pharmaceutical companies’ home base, in countries like India, China, and Brazil. And many industry analysts expect the market to skyrocket, particularly as expanding libraries of genetic information increase the number of drugs coming out of the lab. The consulting firm McKinsey calculates that the market in India for outsourcing trials will hit $1.5 billion by 2010.

Ofcourse, the trials bring along benefits. Obviously, the hospitals receive resources that they desperately need. Second, it can be a form of knowledge transfer. However, Kalantri (a local doctor involved in one of such trials) clearly points to problems related to corruption and to the naivety of many of the patients (which come predominantly from the poorer segments of society). Another important point is that the medicines tested are not the ones that are most needed in those countries. And if they are needed, they will be unaffordable for those patients.

When the trial ended, however, Kalantri wondered whether he had served his patients well by enrolling them. At 800 rupees a day, the drug they had taken was too expensive for any of them to afford. Plus, even when it worked, it showed results for just a month. Such a minute and costly improvement might make sense in the US, Kalantri felt, but was it really the kind of medication that poor Indians should be testing? “The biggest problems around here are snakebite and insecticide poisoning,” he points out. “We could really use a trial for one of those.” He mentioned that the emergency ward contained a number of patients with a mysterious fever, one that epidemiological tests had been unable to identify. “It would be good to study it,” Kalantri murmured, sounding a bit regretful. “Maybe we will, one day.”

Technonationalism and Economic Globalism

This month’s Far Eastern Economic Review featured an interesting article about Asia’s nationalist policies in the globalised field of science and innovation. Here are a few sections, but read the full story here (free access).

P.V. Indiresan, the former director of the Indian Institute of Technology Madras: “The future of both China and India is at risk, because neither owns the technology it operates; the intellectual property continues to remain in the West. The short answer to this problem is that we should develop our own technology; we should acquire so much intellectual property that the West will be as much dependent on us as we are on them.”


There has been a real effort to reach out to Asian diasporas in places such as Silicon Valley and Cambridge University. Successful Chinese, Korean, and Indian scientists are being successfully lured back to their home countries to new labs in new research centers stocked with the most advanced equipment. The Shanghai and Beijing municipal governments offer returning technology entrepreneurs tax breaks, subsidized office space and access to government-investment funds.


Mr. Wen’s (Premier Wen Jiabao of China, Ed) January speech about ‘independent innovation’ was accompanied by commentaries in Science and Technology Daily that quickly pointed out that self-reliance did not signal the abandonment of the ‘open door’ policy and that ‘independent’ did not equate to ‘insular’ or ‘closed’. Domestic firms themselves, moreover, have business strategies that may conflict with nationalist goals.

The very forces of globalization that are encouraging such knowledge transfers, however, are also undermining the abilities of Asian nations to effectively implement technonationalist policies or any top-down development strategy, for that matter. WTO restrictions on import quotas, tariff barriers, and export subsidies have gradually created more open and market-oriented economies. As a result, policy makers have gradually replaced state-led, highly centralized models of technological innovation with a more flexible and open system, increasingly dependent on foreign enterprises. As they have globalized, Asian societies have become less susceptible to top-down direction.


The twin forces of nationalism and globalization could, however, push in opposite directions. Changes in the security environment are the most likely scenario that would lead policy makers to more forcefully control the free flow of ideas or talent. Already worried about the rise of China’s military power, the U.S. defense and commerce departments are currently considering new regulations limiting the ability of foreign students and researchers to work with information and technology that is export-controlled. Job loss in developed countries, especially among knowledge workers believed to be immune from the vagaries of international competition, could generate a backlash against globalization. A failure of Asian firms to actually work their way up the value chain and begin to control proprietary technology may also cause decision-makers to question whether they can truly break free of dependence on Western technology through integration with the global economy.

It will not be surprising to see innovation and technological challenges arising from countries not historically known for their scientific prowess. While globalization is a part of this story, an important and often overlooked element of this story is the nationalist agenda promoted by Asian states. The world may be flatter, but it is still populated by nation-states seeking to increase their wealth, power, and status.

Pak Pram’s new book

The IHT has an article on one of the greatest writers of our time: Pramoedya Ananta Toer. Toer (a.k.a. Pak Pram) is probably best known for his Buru Quartet, named after the island Buru where he was imprisoned while he wrote the book. It consists of four books telling the saga of the first stirrings of Indonesian nationalism seen through the eyes of a young Javanese student. The books are This Earth of Mankind (Bumi Manusia), Child of All Nations (Anak Semua Bangsa), Footsteps (Jejak Langkah), and House of Glass (Rumah Kaca). I have read nearly all of his books and my personal favorite is Gadis Pantai, a brilliant portrayal of Javanese culture illustrating a spectrum of Indonesian religion, traditions, gender roles, and socio-economics.

His latest book, Jalan Raya Pos (The Great Post Road) was published in 2005. As far as I know it is only available in Bahasa Indonesia but hopefully there will be a translation soon (otherwise I guess I’ll have to repolish my language skills and read it in Indonesian). The book is about a major highway 1,000 kilometers across the north coast of Java by the Dutch governor General Herman Willem Daendels, in the early 19th century.

Although long lost in the mists of history, Pramoedya conservatively estimates that the construction of Daendel’s Great Post Road cost the lives of more than 12,000 workers who toiled as forced laborers in indescribable conditions to build a seven-meter-wide road so that the wheels of commerce fueling Dutch wealth could grind more efficiently. Pramoedya follows the Great Post Road as it winds itself across the island of Java, using every town and district along the way as a marker of colonial excess and corruption.

What isn’t told in the IHT article is that the book was previously ‘published’ as a movie in 1996. This 150 minute documentary/road movie tells the story of a writer, a road and the history of a country. Through a long and winding road that symbolizes the long Dutch oppression, through places and conversations that symbolize the oppression of Suharto’s New Order, the writer that suffered terribly under both regimes uncovers the history and culture of his country. Here’s an excerpt from a review by Vanessa Hearman in Inside Indonesia:

Generous in its coverage of the everyday experiences of Indonesians, it speaks with road gangs, tea pickers, newspaper sellers and a hotel-building entrepreneur who is largely blind to the daily reality going on around him. The narration is sparse, allowing for Pramudya’s reading to dominate.

For this film, Pramoedya Ananta Toer wrote an essay which I assume forms the basis for the new book with the same name. I can’t wait to read it..

Technology Transfer and the Ownership of Science

The Association of University Technology Managers represents professionals in the field of technology transfer and tries to develop and promote best practices in the profession. Universities have seen a significant increase in technology transfer activity. Before 1980, fewer than 250 patents were issued to U.S. universities each year and discoveries were seldom commercialized for the public’s benefit. In contrast, in 2002, AUTM members reported that 4673 new license agreements were signed. Between 1991 and 2002, new patents filed increased more than 310 percent to 7741 and new licenses and options executed increased more than 365 percent to 4673.

The AUTM contributes much of the success in university technology transfer and the resulting economic and health benefits to the Bayh-Dole Act of 1980:

Co-sponsored by Senators Birch Bayh and Robert Dole, the Bayh-Dole Act enabled universities, nonprofit research institutions and small businesses to own and patent inventions developed under federally funded research programs. Before the passage of this legislation, new discoveries resulting from federally sponsored research passed immediately into the public domain. The provisions of the act, however, provided an incentive for universities to protect their innovations and, therefore, for industry to make high-risk investments resulting in products made from those innovations.

In 2005, the AUTM launched The Better World Project to explain in everyday terms how academic research and technology transfer have changed our way of life and made the world a better place (their words, not mine, ed). Recently they issued two reports that provide information on technology transfer projects ranging from Honeycrisp apples, Google, the V-chip, nicotine patches and Taxol. The reports are available online:

Technology Transfer Stories: 25 Innovations That Changed the World (1 MB)
and the other one:
Technology Transfer Works: 100 Cases From Research to Realization (1.2 MB)

In 2004, two institutions in New York City accounted for about 20 percent of all revenues reported. Columbia University earned more than $116-million, and New York University reported earnings of more than $109-million. The concentration of licensing revenue among a small number of universities is typical. Eight institutions accounted for more than half of all revenues reported. At least 22 institutions besides Columbia reported earnings of $10-million or more.

Universities share proceeds from commercialization with inventors. Although formulas vary, inventors typically receive about one-third of the total. In many cases, additional allocations from the institution’s share go to their school, department, or laboratory.

Obviously, allowing universities to generate profits for themselves and the companies that license the inventions, while the research is funded by tax-payers, does raise questions and criticism. Who should own science? In the past years, several books have been published that critique the commercialization of research (and other academic capitalist activities in the knowledge factory / university in ruins) or at least point to the risk of the market or the paradox of the marketplace.

Despite all the criticism, the US approach to technology transfer is still used as the model for many non-US universities. Their approach is increasingly being copied in countries in Europe and Asia and other parts of the world.