The days of the Raj are long gone, but multinational corporations are riding high on the trend toward globalization by taking advantage of India's educated work force and deep poverty to turn South Asia into the world's largest clinical-testing petri dish.

The sudden influx of drug companies to India resembles the gold rush frontier, according to Sean Philpott, managing editor of The American Journal of Bioethics.

"Not only are research costs low, but there is a skilled work force to conduct the trials," he said. In the rush to reap profits, Philpott cautions that drug companies may not be sensitive to how poverty can undermine the spirit of informed consent. "Individuals who participate in Indian clinical trials usually won't be educated. Offering $100 may be undue enticement; they may not even realize that they are being coerced," he said.

For decades, pharmaceutical research in India didn't rely on clinical testing. Scientists mostly reverse-engineered drugs already developed in other countries. But in March, everything changed when India submitted to pressure from the World Trade Organization to stop the practice and implement rules that prohibit local companies from creating generic versions of patented drugs.

Now, pharmaceutical companies can rest assured they won't lose profits to a domestic market, and India is suddenly a profitable location for performing the expensive tests required for Food and Drug Administration clearance of any drug. Though it is still too soon to tell how much the legislative change has boosted drug development, observers say the number of studies conducted by multinational drug companies has sharply increased since March.

Given the rising cost of drug research in the United States and Europe, more and more drug companies are conducting clinical trials in developing countries where government oversight is more lax and research can be done for a fraction of the cost. According to a 2004 study by Rabo India Finance, a subsidiary of the Netherlands-based Rabo Bank, clinical trials account for more than 40 percent of drug-development costs. The study also found that performing the studies in India can bring the price down by about 60 percent.

By 2010, total spending on outsourcing clinical trials to India could top $2 billion, according to Ashish Singh, vice president of Bain & Co., a consulting firm that reports on the health-care industry.

Regardless of where clinical trials are performed, the FDA requires the same evidence showing that a drug is safe and effective before it will approve any drug, according to a written comment from Ken Johnson, senior vice president of The Pharmaceutical Research and Manufacturers of America Foundation.

And it's the responsibility of the institutional review boards at the medical institutions where the studies take place to "actively pursue issues of informed consent," according to another written comment from Jeff Trewhitt, a spokesman for the pharmaceutical industry trade group.

Nevertheless, even before the anti-generic rules were enacted, companies performing clinical trials in India saw their share of problems. In 2004, two India-based pharmaceutical companies, Shantha Biotech in Hyderabad and Biocon in Bangalore, came under scrutiny for conducting illegal clinical trials that led to eight deaths.

Shantha Biotech failed to obtain proper consent from patients while testing a drug meant to treat heart attacks. Biocon tested a genetically modified form of insulin without the proper approval from the Drug Controller General of India or the Genetic Engineering Approval Committee.

In another incident, Sun Pharmaceuticals convinced doctors to prescribe Letrozole, a breast cancer drug, to more than 400 women as a fertility treatment in a covert clinical trial -- and used the results to promote the drug for the unapproved use.

Shantha Biotech, Biocon and Sun Pharmaceuticals did not return e-mails seeking comments for this story.

Pfizer and Eli Lilly have been conducting clinical trials in India for many years, and Novo Nordisk and GlaxoSmithKline have also set up trials in the last two years. The companies did not respond to requests for comment.

Companies are attracted to India not only because of the huge patient pool and skilled workers, but also because many potential study volunteers are "treatment naïve," meaning they have not been exposed to the wide array of biomedical drugs that most Western patients have, said Stefan Ecks, a lecturer in social anthropology at the School of Social and Political Studies in Edinburgh who recently published a paper on the marketing of antidepressants in India.

"Doctors are easier to recruit for trials because they don't have to go through the same ethics procedures as their Western colleagues," Ecks said. "And patients ask fewer questions about what is going on."

After the outcry against Shantha and Biocon, the Indian government adopted stricter ethical guidelines for clinical research, but it's too early to know whether companies are abiding by the new rules.

Also, critics say study volunteers may be taking risks without the potential for reward. Since many pharmaceutical companies are developing the drugs for markets in industrialized nations, it is unlikely that India's poor will have access to most of the new medicine.

"Third World lives are worth much less than the European lives. That is what colonialism was all about," said Srirupa Prasad, a visiting assistant professor of medical history and bioethics at the University of Wisconsin-Madison.