Improving ‘Access to Modern Medicines’ in India –Public Private Partnership (PPP) is the way forward.

Despite various measures being taken by the Government of India (GoI) from time to time, around 65% of Indian population are not having access to modern medicines. It appears, GoI is of the view that the reason for poor ‘access to modern medicines’ to a vast majority of our population is intimately linked to the issue of ‘affordability of medicines’.To make medicines affordable to the common man, the Government took a radical step in 1972 by passing a law to abolish products patent in India. The change in paradigm at that time, encouraged domestic pharmaceutical players to manufacture and market even those latest and innovative drugs, which were protected by patents, n many countries of the world. The new ball game enabled the domestic players to highly specialize in ‘reverse engineering’ and launch generic versions of most of the New Chemical Entities (NCEs)at a fraction of the innovators price, in India.This shift in Paradigm in 1972, catapulted the Indian domestic pharmaceutical industry to a newer orbit of success. India in that process, over a period of time, established itself as a major force to reckon with, in the generic pharmaceutical markets of the world. Currently, the domestic pharmaceutical industry in India caters to around one third of the global requirement of generic pharmaceuticals.

From 1972 to 2005 domestic Indian pharmaceutical companies focused on replicating all most all blockbuster drugs, like for example, major Cox2 inhibitors (Merck and Pfizer), Viagra and Lipitor (Pfizer) etc, to low price generic substitutes and that too just within a year or two from the date of first launch of these products in the developed markets of the world.

In 1972, the Market share of the Indian domestic companies, as a percentage to turnovers of the total pharmaceutical industry of India, was around 20%. During the era of ‘reverse engineering’, coupled with many top class manufacturing and marketing strategies, domestic Indian pharmaceutical players wheezed past their multinational (MNCs) counterparts in the race of market share, exactly reversing the situation in 2009.

‘Reverse engineering’ was one of the key growth drivers of domestic pharmaceutical industry during this period. In its absence, during post IPR regime, the growth rate of branded generic industry is not expected to be as spectacular. However, the low cost ‘essential medicines’ will continue to be produced and marketed in India in future, as well.

Be that as it may, from 1972 to 2005, India could produce and offer even the latest NCEs, at a fraction of their international price, to the Indian population. There were as many as 40 to over 60 generic versions of each successful blockbuster drug of the world, in India. Cut-throat competition was intense and still it is, which keeps the average price of such medicines well under control. To further tighten its grip over pharmaceutical products pricing, GoI imposed stringent price control and price monitoring mechanism simultaneously, which are in place even today. Despite competitive pricing pressure coupled with Government price control, over nearly four decades, with a key policy focus on ‘affordability of medicines’, why then ‘access to modern medicine’ remained abysmal for a vast majority of the population of India?

To address this vexing problem, Industry Associations reported to have suggested a policy shift towards public-private-partnership (PPP) model to the Ministry of Chemicals and fertilizers in 2006-07. At that time, the Associations seem to have offered that the Pharmaceutical Industry will supply to the GoI the essential medicines at 50% of their Maximum Retail Price (MRP), to cater to the need of the common man, especially those who are below the poverty line (BPL).

However, to make this proposal effective there is a fundamental need for the Government to quickly initiate significant ‘capacity building’ exercise, initially in our primary and then in the secondary healthcare value chain. Towards this direction, the Federation of Indian Chambers of Commerce and Industry (FICCI) reported to have suggested to the Government for an investment of around US$ 80 billion to create over 2 million hospital beds.

Frugal budget allocation (1.12%) of the GoI towards healthcare as % of GDP of the country, suggests that Government is gradually shifting its role in this very important area, primarily from healthcare provider to healthcare facilitator for the private sectors to develop it further. In such a scenario, it is imperative for the government to realize that the lack of even basic primary healthcare infrastructure, leave aside other incentives, impede effective penetration of private sectors into semi-urban and rural areas. PPP model should be worked out to address such issues, effectively.

I have highlighted the remedial measures to be taken to address this situation in my article, which can be read by clicking on the following link:

Over 70 percent of our population are located in rural India. A relatively recent study indicates that despite some major projects undertaken by the Governments, like National Rural Health Mission (NRHM), about 80 percent of doctors, 75 percent dispensaries and 60 percent of hospitals are located in urban India. Another recent initiative taken by the Department of Pharmaceuticals (DoP) called ‘Jan Aushadhi’ is also orientated towards urban and semi-urban India.

I had deliberated upon the ways to increase penetration of ‘Jan Aushadhi’ in rural India, in another article, which can be read by clicking on the following link:

The net result of such policy initiatives, denies over 65 percent of Indian rural population from having access to quality healthcare services. Such lack of focus on rural areas, perhaps will explain the reason why only 35 percent of Indian population is having access to modern medicines.

Instead of trying to find a solution for this alarming ‘access to medicines’ problem, by limiting focus mainly on the issue of ‘affordability’ of medicines, for several decades, the Government is doing a great disservice to the common man, mainly located in the rural and semi-urban India. It is now high time that the GoI analyzes the available data to address the root cause of poor healthcare delivery, infrastructure and almost total lack of healthcare financing for all strata of Indian society.

Let me hasten to add that in no way I am trying to say that ‘affordability of medicines’ is no issue in India. All I am saying is that an integrated approach towards the root causes will quite effectively take care of ‘affordability’ issue and NOT the vice versa.

Even a problem of such magnitude can be converted into an opportunity. India can certainly be made a global hub for quality and affordable healthcare services, flashes of which we see in medical tourism initiatives.

Therefore, to address the acute problem of ‘access to modern medicines’ to a vast majority of the Indian population, GOI should reach all out to attract significant private and even foreign direct investments (FDI) through innovative Private Public Partnership initiatives. A strong will to have an ‘out of box’ solution to this critical problem is the crying need of the hour.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

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