The drugs giant GlaxoSmithKline is moving a third of its clinical trials offshore to countries such as India and Poland to cut costs.
More than 90% of the firm's human trials occur in the west. Drugs firms typically hire cash-strapped students to do safety tests on healthy people as well as sufferers of the disease for whom the drugs are designed.
A growing medical research industry in the far east and eastern Europe is luring Glaxo. There, patients do not have to be paid as much to test the drugs and hospital running costs are lower. An increasing number of clinical trial contractors are setting up operations in those regions.
In the UK, a healthy volunteer would be paid about £100 a night for a typical study. In India, the cost of conducting clinical trials can be as little as a tenth of the costs in the west, a pharmaceutical industry source said.
Glaxo wants to move a third of its trials overseas within the next two years. The company is facing an escalating research bill because the number of clinical trial projects has increased to more than 80, and the costs get higher the nearer the drugs get to market.
At the same time as GSK's costs are increasing, the firm has lost sales from a number of its top-selling drugs which have lost their patent and therefore exclusivity.
The industry as a whole is facing pressure on its profit margins and there is the prospect of a fall in drug prices in the US and the UK.
"There is no alternative to really streamlining research and development departments," said Glaxo's chief executive, Jean-Pierre Garnier, last week. "We are trying to move 30% of our clinical trials to low-cost countries."
John Coombe, the finance director, said that there should not be "too much" of an effect on the number of scientific staff in the UK and the US since trials could be monitored from afar.
The company has set a two-year target for moving a third of its trials overseas.
Glaxo already conducts trials in Poland and will expand its activities there. It is also looking at working in South American countries.
Mr Coombe said that the firm could not "ignore" India but there were issues with keeping the standards that drugs regulators required.
The US regulator, the Food and Drug Administration, is widely thought to prefer trials on its own soil, and western countries generally prefer studies to be done in western hospitals. Companies often conduct two or three large drugs trials to present to a regulatory agency; if the majority of the data comes from standard western sources regulators might accept it.
As the industry moves its clinical trials offshore, it is also likely to look at moving its research too, not only for reasons of cost. A lot of this work is done on animals, and militancy within the animal rights movement makes the countries of the far east, such as Singapore and China, attractive to drugs firms.
GlaxoSmithKline has started collaborating with Ranbaxy, an Indian company making generic versions of drugs, in working on certain early-stage drug development and research. It has also opened a research facility in Singapore. As well as keeping costs down as its drug development process advances, Glaxo and other drug companies face a crisis over the reputation of the industry.
Dr Garnier said the way to address the drug industry's reputation was to find good drugs solving "big" healthcare problems. "My generation will have such an incidence of Alzheimer's there are not enough hospital beds to accommodate all of those people. If industry comes through with those efforts to allow Alzheimer's patients to operate [normally], it will save gazillions of dollars to the healthcare system and the pain of the families."
