A prominent Indian hospital where 49 babies died in clinical trials that took place there says the drugs used in the tests were “safe,” according to the Press Trust of India. But the hospital, the state-run All-India Institute of Medical Sciences, also says an in-house inquiry is under way into the trials, which started in the beginning of 2006 and are ongoing.

“All the studies had undergone scientific scrutiny and had all the required regulatory and ethical approvals,” the hospital said in a statement, according to the news agency. The institute said the infants died because they had “high-risk and serious disease conditions.”

The hospital denied the children in the trials came only from poor families, a concern raised by a non-profit group that sought details about the trials through a freedom-of-information request. “There was no question of targeting any socioeconomic group selectively,” the hospital statement said, adding that more details would be provided after it completed the inquiry into the trials, which included drugs marketed by Novartis and Shire Pharmaceuticals.

India has become the leading destination for global drugmakers to outsource clinical trials, largely because of the diverse genetic pool offered by its population and the low cost of doing business. Clinical trials are forecast to become a $2 billion-a-year industry in India by 2010. About 139 new trials were ousourced to India last year, putting it well ahead of the second-placed China, which had 98. Trials in India cost roughly half the price in developed countries.

Some 4,142 babies admitted to the hospital have been in clinical trials since January 1, 2006, more than half of them under the age of one, said the Uday Foundation for Congenital Defects and Rare Blood Groups, which filed the request for info. The non-profit’s founder, Rahul Verma, says the group hoped to publicize the need for better regulation of India’s booming outsourced clinical trial business.