After months of headlines recounting accusations that Pfizer illegally tested its Trovan antibiotic on children during a 1996 meningitis epidemic in Nigeria, the drugmaker this summer finally settled civil and criminal charges stemming from 11 deaths and disabling injuries that effected scores of others who participated in the trial.

For Pfizer, the $75 million deal was a relatively small price to pay, given the billions of dollars sought by the Nigerian authorities and their threats to use Interpol to collar various Pfizer execs so they could testify in their courts. Who can forget the rumblings that Bill Steere, the buttoned-down Pfizer board member and former chief executive, may be handcuffed and bundled into an overseas flight?

Moreover, the settlement removed an especially embarrassing and troubling episode from the collective radar screen. The controversy cast a particularly harsh spotlight on Pfizer, which has furiously denied Trovan or employee conduct was responsible for the tragedy. But Pfizer wasn’t really alone in all this. By extension, the publicity made the entire pharmaceutical industry – and its increasing reliance on conducting clinical trials in developing nations – a subject for discussion.

The larger context, of course, is the ongoing criticism of the industry for a wide variety of reasons, from complaints over prices and safety disclosures to payments to doctors and ghostwritten articles in medical journals. Drugmakers may have struck a favorable bargain with the White House as part of the effort to reform health care, but they have not completely escaped criticism and suspicion.

A clinical trial scandal in a poor country, in which several children died and others were seriously injured, simply added an ugly element to the discourse. Sure, the Trovan saga may have occurred more than a decade ago and, presumably, trial practices have changed since then anyway. In other words, the implication is that it’s not only old news, but probably irrelevant. But if some drugmakers may be accused more recently of, say, unfairly withholding clinical trial results, is it really surprising that the Trovan scandal doesn’t somehow continue to resonate today?

The issue generated similar questions in medical circles earlier this year when The New England Journal of Medicine ran a piece in which Duke University School of Medicine researchers wrote that scientific and ethical concerns are mounting. They argued that international standards and corporate and academic oversight must be improved to ensure research goals are achieved and societal needs are met. They noted that about one-third, or 157 out of 509, clinical trials registered on ClinicalTrials.gov are conducted overseas and more than half of all sites are outside the U.S., with many in Eastern Europe and Russia, where oversight is evolving.

Yet another development in the Trovan case garnered attention: a January 2009 ruling by the U.S. Court of Appeals for the Second Circuit, which decided that dozens of Nigerians could sue Pfizer in U.S. courts over the issue of obtaining informed consent. The ruling, which prompted the settlement talks to move faster, essentially put the entire pharmaceutical industry and CROs on notice.

Mindful of all this, one industry trade group has decided to push back. The Association of Clinical Research Organizations, which represents the CROs that work with so much of the pharmaceutical industry, recently decided to commission a white paper in hopes of debunking some of the carping about clinical trials that are going overseas with increasing regularity.

Dubbed the ‘Case for Globalization,’ the paper argues that clinical trials in poorer countries do, in fact, meet the same standards as those in the U.S. and other developed nations. At the same time, the group also urges greater funding for the FDA, so the agency can better monitor overseas studies, and greater adherence to Good Clinical Practices espoused by the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH).

“On a flattened earth with waning U.S. participation in clinical trials, global trials are helping speed important drugs to market,” says ACRO executive director Doug Peddicord, in a statement announcing the paper, which notes that ACRO members initiated more than 9,000 clinical trials in 115 countries last year. In that context, the paper makes a point of describing the Trovan scandal as a “rare (but) well-publicized lapse in standards.”

To make this case, Value of Insight Consulting president Todd Clark, who wrote the paper for ACRO, trots out various interesting data points. For instance, given what’s described as a general difficulty in enrolling Americans in clinical trials, the paper maintains that it would require about 5.8 years to fully enroll all currently open Phase III cancer trials if only U.S. locations were used, compared with 1.9 years when using both U.S. and global trial sites.

Another point: PhRMA members spent about 96% of their clinical trial dollars in developed countries in 2007. VOI then notes that, in a September 2008 report, the Frost & Sullivan market research firm found that North America had a 49% share of global R&D spending, while Western Europe had a 37% share. And the Asia/Pacific region, which includes India and China, had a 13.5% share, leaving the rest of the world with about 0.5%.

What else? Well, 76% of all Phase I studies take place in just three countries – the U.S., Canada and the Netherlands. And an analysis of data from ClinicalTrials.gov found that 51.8% of all newly registered industry-sponsored trials in 2008 had at least some U.S. activity, and that this was the same share as in 2006. By way of comparison, India had a 2.7% participation rate, China had a 1.8% rate and Russia had a 3.3% rate.

The point ACRO is trying to make is that, for all the concern about clinical trial activity in developing nations and the hand-wringing over ensuing ethical issues, the pharmaceutical industry has been conducting most of its activity in the U.S. or in other developed countries. That may be a legitimate notion, but that’s also likely to change in coming years. In other words, this is a moving target.

Other data cited by the paper do highlight the ongoing shift – about half of all pivotal studies submitted to the FDA contain at least some foreign data. Between 2004 and 2007, the number of FDA-regulated investigators rose by 15.9% in Central and Eastern Europe, by 12.2% in Latin America and by 10.2% in the Asia/Pacific region. But in the number of U.S., Canadian and Western European investigators dropped by 5.2%.

Why? ACRO acknowledges the big reason is lower costs, but then argues that the “fully-loaded” cost of running studies in developing countries “often approaches” the levels found in “more established” places (whether this is wholly accurate is unclear; the citation used to support this point is for a recent article in Drug Information Journal that discusses the role of only the Asia/Pacific region in global drug development).

But the real issue, as ACRO sees it, is that these lower-cost markets make it possible to develop drugs faster and, in doing so, help patients who otherwise may not get needed treatments. The group also argues about residual benefits – patients in developing nations receive access to care that may not be obtainable and, in poor countries, clinical trials provide a “major” source of subsidized medical treatment.

Having established the ‘needs’ arguments, ACRO attempts to bolster its case by maintaining that patient safeguards do exist. For instance, the whitepaper uses literacy rates as a proxy for understanding informed consent, and lists a table showing high rates. Yet, the paper acknowledges this is “no guarantee” that a patient can fully understand the implications of the research in which they participate. Last year, for instance, GlaxoSmithKline was accused of running a trial in Argentina for a vaccine and used children from poor families who may have not fully understood consent forms. Glaxo refuted the charges and insisted it complied with GCP standards.

The paper also cites data showing the percentage of actions taken by FDA inspectors after scrutinizing clinical trials around the world between 2000 and 2008, and suggests that the inspections indicate “the quality of research is in line with . . . norms” in the developed world. But of course, there have been precious few inspections compared with those in the U.S., so reaching such a conclusion may be premature, because we don’t know whether the conclusions would have been different had FDA inspectors reviewed a larger proportion of overseas trials during those years.

This isn’t to say that developed countries don’t have issues – who can forget the Coast IRB scandal a few months ago – or that developing nations aren’t taking steps to improve. More countries in so-called emerging markets, for instance, appear to be trying to adhere to GCP guidelines. But the overriding ethical issues will remain a sensitive topic until the industry can more broadly win back public trust. A scandal on the magnitude of Trovan may not come along very often, but it may not take an episode so devastating to raise shackles. Until then, CROs will have to tread carefully to ensure overseas operations are as pristine as possible. Another lapse won’t go over well.

Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for The Star-Ledger of New Jersey, one of the nation’s largest daily newspapers, for more than 12 years. During that time, he has closely followed a variety of topics of concern to those who work for, and with, pharmaceutical manufacturers – drug development, mergers and acquisitions, regulatory oversight, safety and pricing controversies, and marketing issues. For the past two years, Ed blogged about the drug industry at Pharmalot, which can now be found at twitter.com/pharmalot. Prior to joining The Star-Ledger, Ed spent six years at New York Newsday and previously worked at Investor’s Business Daily.