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Fostering ‘Innovation’ and protecting of ‘Public Health Interest’: A formidable task for the new TF (taskforce)

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‘The Lancet’, March 19, 2011 in its article titled “India: access to affordable drugs and the right to health”, where the authors reiterated:

‘The right to health is a fundamental right in India, judicially recognized under article 21 of the Constitution…Access to affordable drugs has been interpreted to be a part of right to health’.

Keeping in view of this ‘fundamental right’ of the citizens, public health related issues will continue to be treated as a subject of ‘Public Interest’ in the country.

At the same time, no one can wish away the fact that unmet medicinal needs of the ailing patients can only be met through discovery of innovative drugs. Hence, an innovation friendly ecosystem must necessarily be created in the country, simultaneously. This throws open the dual challenge to the government in the healthcare space of the nation – charting an appropriate pathway to foster a climate for innovation and at the same time protecting ‘Public Health Interest’ of its citizens.

The recent admirable response of the Ministry of Health:

Considering this dual healthcare related needs of the country, on March 15, 2011, Mr Ghulam Nabi Azad, the Minister of Health and Family Welfare, announced the formation of a 12-member task force that will evolve the following strategies under the chairmanship of V.M. Katoch, Secretary, Department of Health Research and Director-General, ICMR and will submit its report within three months.

  1. Evolving a short, medium and long-term policy and strategy to make India a hub for drug discovery, research and development.
  2. Evolving strategies to further the interests of Indian pharma industry in the light of issues related to intellectual property rights and recommend strategies to capitalise the opportunity of $60 to $80 billion drugs going off-patent over the next five years.
  3. Evolve policy measures to assure national drugs security by promoting indigenous production of bulk drugs, preventing takeover of Indian pharma industry by multi-national corporations, drug pricing, promotion of generic drugs
  4. Recommend measures to assure adequate availability of quality generic drugs at affordable prices.

Indian Pharmaceutical Industry is on a growth spree:

The pharmaceutical industry of India is currently playing a key role in promoting and sustaining development in the healthcare space of India. Due to significant cost arbitrage, educated and skilled manpower and cheap labor force among others, the industry is set to establish itself as a global force to reckon with, especially in the areas of generic formulations business, Contract Research and Manufacturing Services (CRAMS).

Estimates and Perspectives:

  • The pharma industry is growing at around 1.5-1.6 times the Gross Domestic Product growth of India
  • Currently, India ranks third in the world in terms of volume of manufacturing pharmaceutical products
  • The Indian pharmaceutical industry is expected to grow at a rate of around 15 % till 2015
  • The retail pharmaceutical market in India is expected to cross US$ 20 billion by 2015
  • According to a study by FICCI-Ernst & Young India will open a probable US$ 8 billion market for MNCs selling patented drugs in India by 2015
  • The number of pharmaceutical retailers is estimated to grow from 5.5 lakh to 7.5 lakhs by 2015
  • At least 2 lakh more pharma graduates would be required by the Indian pharmaceutical industry by 2015
  • The Indian drug and pharmaceuticals sector attracted foreign direct investment to the tune of US$ 1.43 billion from April 2000 to December 2008 (Ministry of Commerce and Industry), which is expected to increase significantly along with the policy reform measures and increased Government investment (3%-4%) as a percentage of GDP towards healthcare, by 2015
  • The Minister of Commerce estimates that US$ 6.31 billion will be invested in the domestic pharmaceutical sector
  • Due to low cost of R&D, the Indian pharmaceutical off-shoring industry is expected to be a US$ 2.5 billion opportunity by 2012

Key growth drivers: Local and Global:

Local:

• Rapidly growing middle class population of the country with increasing disposable income.
• High quality and cost effective domestic generic drug manufacturers are achieving increasing penetration in local, developed and emerging markets.
• Rising per capita income of the population and inefficiency of the public healthcare system will encourage private healthcare systems of various types and scales to flourish.
• High probability of emergence of a robust healthcare financing/insurance model for all strata of society.
• Fast growing in Medical Tourism.
• Evolving combo-business model of global pharmaceutical companies with both patented and generic drugs is boosting local outsourcing and collaboration opportunities.
Global:
Global pharmaceutical industry is going through a rapid process of transformation. The moot question to answer now is how the drug discovery process can meet the unmet needs of the patients and yet remain cost effective.

Cost containment pressure due to various factors is further accelerating this process. CRAMS business, an important outcome of this transformation process, will be the key growth driver for many Indian domestic pharmaceutical players in times to come. 

Key Challenges:

Like all other industries, Pharmaceutical Industry in India has its own sets of Challenges and opportunities under which it operates. Some of the challenges the industry faces are:

  • Unfortunate “Trust Deficit” between the Government and the Industry, especially in pharmaceutical pricing area
  • Regulatory red tape and lack of initiative towards international harmonization
  • Inadequate infrastructure and abysmal public delivery system
  • Lack of adequate number of qualified healthcare professionals
  • Inadequate innovation friendly ecosystem to encourage R&D
  • Myopic Drug Policies have failed to deliver. The needs of over 350 million BPL families who cannot afford to buy any healthcare products and services, have not been effectively addressed, as yet
  • Inability of the government to address the critical issue of ‘80% out of pocket expenditure’ of the common man towards healthcare
  • Inadequate Public Private Partnership (PPP) initiatives in most of the critical areas of healthcare

Job Creation:

Pharmaceutical sector in India has created employment for approximately 3 million people from 23,000 plus units. Accelerated growth in job creation, will not only open up more opportunities to pharmaceutical professionals, but will also fuel growth opportunities in allied business segments like Laboratory, Scientific instruments, Medical Devices and Pharma machinery manufacturing sectors.

Despite all these, it is worth noting that the Indian pharmaceutical industry is confronting with a major challenge in getting employable workforce with the required skill sets. This issue will grow by manifold, as we move on, if adequate vocational training institutes are not put in place on time to generate employable workforce for the industry.

Government Initiatives are inadequate:

The government of India has started working out some policy and fiscal initiatives, though grossly inadequate, for the growth of the pharmaceutical business in India. Some of the measures adopted by the Government are follows:

  • Pharmaceutical units are eligible for weighted tax reduction at 175% for the research and development expenditure obtained.
  • Two new schemes namely, New Millennium Indian Technology Leadership Initiative and the Drugs and Pharmaceuticals Research Program have been launched by the Government.
  • The Government is contemplating the creation of SRV or special purpose vehicles with an insurance cover to be used for funding new drug research
  • The Department of Pharmaceuticals is mulling the creation of drug research facilities which can be used by private companies for research work on rent

Encouraging Pharmaceutical Export:

In the recent years, despite economic slowdown being witnessed in the global economy, pharmaceutical exports in India have registered an appreciable growth. Export has emerged as an important growth driver for the domestic pharmaceutical industry with more than 50 % of their total revenue coming from the overseas markets. For the financial year 2008-09 the export of drugs is estimated to be around US $8.25 billion as per the Pharmaceutical Export Council of India (Pharmexil). A survey undertaken by FICCI reported 16% growth in India’s pharmaceutical export during 2009-2010.

Five ‘Strategic Changes’ envisaged:
Five new key strategic changes, in my view, will be as follows:
1. As the country will move towards an integrated and robust healthcare financing system:
• Doctors will no longer remain the sole decision makers for the drugs that they will prescribe to the patients and also the way they will treat the common diseases. Healthcare providers/ medical insurance companies would play a key role in these areas by providing to the doctors well thought out treatment guidelines. • Tough price negotiation with the healthcare providers/ medical insurance companies will be inevitable for a significant proportion of the products that the pharmaceutical companies will sell related to these areas.

• Health Technology Assessment (HTA) or outcome based pricing will play an important role in pricing a healthcare product.
2. An integrated approach towards disease prevention will emerge as equally important as treatment of diseases.
3. A shift from just product marketing to marketing of a bundle of value added comprehensive disease management processes along with the product will be the order of the day
4. More affordable innovative medicines will be available with increasing access to a larger population, as appropriate healthcare financing model is expected to be in place.

5. Over the counter medicines, especially originated from rich herbal resources of India, will curve out a larger share of market, as appropriate regulations will be put in place.

Conclusion:

With the all these evolving trends in the healthcare sector of India, the ball game of the successful domestic Indian pharmaceutical industry is expected to undergo a rapid metamorphosis, as they will require to  compete with the global players on equal footing. Those Indian Pharmaceutical companies, who are already global players in their own rights, are already well versed with the nuances of this new game and are expected to offer a tough competition to the global players, especially, in the branded generic space, initially.

However, for some domestic players, the new environment could throw a major challenge and make them vulnerable to the consolidation process, already set in motion within Indian pharmaceutical industry.

The newly formed taskforce will hopefully be able to address all these issues in an integrated way to guide this life-line industry to a much higher growth trajectory to compete effectively not only in the global generic space, but also with the global innovator companies, sooner than later.

So the name of the game is to ‘Foster Innovation’ and protect ‘Public Health Interest’ simultaneously and not one at the cost of the other.

By: Tapan J 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.

A Disruptive Innovation in Healthcare – Personalized Medicines

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Tufts Center for the Study of Drug Development (Tufts University) in its publication named ‘Impact Report’, November/December 2010 articulated, “Biopharmaceutical companies are committed to researching and developing personalized medicines and within their development pipelines, 12%-50% of compounds are personalized medicines.”

Thus the disruptive innovation process towards ‘Personalized Medicines’ have already begun. Over a period of time ‘Personalized Medicines’ will be targeted to the biological/genomic profile of an individual to significantly improve the quality of healthcare to the patients.

This paradigm shift in the healthcare space would prompt similar changes in various disease diagnostic technologies, which will not only be able to detect a disease well before the appearance of symptoms, but would also  indicate which patients will best respond to or be adversely affected by which medications.

‘Personalized Medicines’ will in that process ensure a critical shift from the disease oriented treatment to a patient oriented treatment, which can be initiated much before the clinical manifestations of a disease are detected.

The technological march towards this direction is indeed risky and arduous one. However, the benefits that the humanity will accrue out of this disruptive innovation will far outweigh the risks in all forms.

Personalized Medicines:

Rapid strides in pharmacogenomics bring in a promise of radically different ways of treating diseases, as major pharmaceutical companies of the world make progress in developing much more effective medicines designed to target smaller populations.

The above ‘Impact Report’ defines Personalized Medicines as:

“Tailoring of medical treatment and delivery of health care to the individual characteristics of each patient—including their genetic, molecular, imaging and other personal determinants. Using this approach has the potential to speed accurate diagnosis, decrease side effects, and increase the likelihood that a medicine will work for an individual patient.”

‘Personalized Medicines’ are expected to be an effective alternative to quite unwieldy current ‘blockbuster drugs’ business model.

What is then the aim of ‘Personalized Medicines’?
The aim of ‘personalized medicines’ is, therefore, to make a perfect fit between the drug and the patient. It is worth noting that genotyping is currently not a part of clinically accepted routine. However, it is expected to acquire this status in the western world, very shortly.

Some interesting recent developments:

  1. The Economist, March 12-18, 2011 in its article titled “Toward the 15-minute genome” reported that ‘nanopore sequencing’ of human genome is now gaining momentum. This could make sequencing of entire genomes of cancerous and healthy cells possible to accurately point out what has exactly changed in individual patients, enabling the oncologists to determine patient specific drugs for best possible results in each case, separately.
  2. New cancer marker has been reported to aid earlier detection of the disease, where repetitive stretches of RNA are found in high concentrations in cancer cells.
  3. A new blood test will accurately detect early cancer of all types with an accuracy of greater than 95%, when repeated the accuracy will even be even greater than 99%.
  4. ‘Breast On A Chip’ will test nano-medical detection and treatment options for breast cancer
  5. A brain scan will detect the telltale “amyloid plaques,” the protein fragments that accumulate between nerves in Alzheimer’s disease

In what way ‘Personalized Medicines’ will be different?

With ‘Personalized Medicines’ the health of a patient will be managed based on personal characteristics of the individual, including height, weight, diet, age, sex etc. instead of defined “standards of care”, based on averaging response across a patient group. Pharmacogenomics tests like, sequencing of human genome will determine a patient’s likely response to such drugs.
These are expected to offer more targeted and effective treatment with safer drugs, and presumably at a lesser cost. Such medicines will also help identify individuals prone to serious ailments like, diabetes, cardiovascular diseases and cancer and help physicians to take appropriate preventive measures, simultaneously. ‘Personalized medicines’ in that process will focus on what makes each patient so unique, instead of going by the generalities of a disease.
To give a quick example, genetic differences within individuals determine how their bodies react to drugs such as Warfarin, a blood thinner taken to prevent clotting. It is of utmost importance to get the dosing right, as more of the drug will cause bleeding and less of it will not have any therapeutic effect.
‘Personalized medicines’, therefore, have the potential to bring in a revolutionary change the way patients are offered treatment by the medical profession. Genomic research will enable physicians to use a patient’s genetic code to arrive at how each patient will respond to different types of treatments.
In the field of cancer, genetic tests are currently being done by many oncologists to determine which patients will be benefitted most, say by Herceptin, in the treatment of breast cancer.
Expected benefits from ‘Personalized Medicines’:

The expected benefits from the ‘Personalized Medicines’, besides very early diagnosis as stated above, are the following:
1. More Accurate dosing: Instead of dose being decided based on age and body weight of the patients, the physicians may decide and adjust the dose of the medicines based on the genetic profiling of the patients.
2. More Targeted Drugs: It will be possible for the pharmaceutical companies to develop and market drugs for patients with specific genetic profiles. In that process, a drug needs to be tested only on those who are likely to derive benefits from it. This in turn will be able to effectively tailor clinical trials, expediting the process of market launch of these drugs.
3. Improved Health care: ‘Personalized Medicines’ will enable the physicians to prescribe ‘the right dose of the right medicine the first time for everyone’. This would give rise to much better overall healthcare.
Role of Pharmaceutical and Biotech companies:
Many research based pharmaceutical and biotechnology companies have taken a leading role towards development of ‘personalized medicines’ in line with their key role as healthcare enterprises. India is also taking keen interest in this science.
Some important issues:
However, there are some ethical and social issues in the development of ‘personalized medicines’ primarily in the area of genetic testing and consideration of race in the development of such medicines, which need to be effectively addressed, sooner.
Can it replace the ‘Blockbuster Drugs’ business model?
Realization of deficiencies in the economics of ‘block buster drugs’ R&D business model has made ‘personalized medicines’ a reality today.
Better efficacy and safety profile of ‘personalized medicines’ will prove to be cost-effective in the overall healthcare systems. Smaller and exclusive markets for ‘personalized medicines’ are also expected to be quite profitable for the pharmaceutical companies. However, such smaller segmentation of the market may not leave enough space for the conventional ‘blockbuster model’, which is the prime mover of the global pharmaceutical industry, even today.
Reports indicate that some renowned global pharmaceutical companies like, Roche, AstraZeneca, GlaxoSmithKline are making good progress towards this direction through collaborative initiatives.
Approximate cost of ‘Genome Sequencing’:
When human genome was first sequenced, the reported cost was staggering U.S$ 3 billion. However, with the advancement of technology, it came down to U.S$ 1 million, last year. Currently, the cost has further come down to U.S$ 60,000. With the rapid stride made in the field of biotechnology, combined with the economies of scale, cost of such genetic tests is expected to be around U.S$ 1,000 in near future, making it possible for people to obtain the blue print of their genetic code.
Savings on cost of Clinical trials with ‘Personalized Medicines’:
Genome sequencing will help identifying a patient population, which will be far more likely to respond positively to the new treatment. In that process, if it reduces costs of clinical trial by even 5%, expected net savings for the industry towards clinical trial have been reported to be around U.S$ 5 billion.
With ‘personalized medicines’ the innovator companies will be able to significantly reduce both time, costs and the risks involved in obtaining regulatory approvals and penetrating new markets with simultaneous development of necessary diagnostic tests. Such tests will be able to identify patients group who will not only be most likely to be benefitted from such medicines, but also will be least likely to suffer from adverse drug reactions.
Therefore, considerable cost advantages coupled with much lesser risks of failure and significant reduction in the lead time for clinical trials are expected to make ‘personalized medicines’ much more cost effective, compared to conventional ‘blockbuster drugs’.
Innovative and cost effective way to market ‘Personalized Medicines’:
With ‘personalized medicines’ the ball game of marketing pharmaceuticals is expected to undergo a paradigm shift. Roche’s model of combining necessary diagnostic tests with new drugs will play a very important role in the new paradigm.
Roche is ensuring that with accompanying required diagnostic tests, the new oncology products developed at Genentech can be precisely matched to patients.
Can ‘Personalized Medicines’ be used in ‘Primary Care’ also?
To use ‘personalized medicines’ in a ‘primary care’ situation, currently there is no successful model. However, it has been reported that in states like, Wisconsin in the U.S, initiative to integrate genomic medicines with ‘primary care’ has already been undertaken. Scaling-up operations of such pilot projects will give a big boost to revolutionize the use of ‘personalized medicines’ for precision and targeted treatment of the ailing population.

Conclusion:

In my view, there does not seem to be any possibility of looking back now. The robust business model of ‘personalized medicines’, will now be the way forward, as much to the industry as to the patients. It is a win-win game.

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.

A time to keep our nose to the Grindstone – Competition Act will take care of M&As, come June 2011

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Full control of powers on Mergers and Acquisitions of the Competition Commission of India (CCI) effective June 1, 2011, has now been notified.

In this evolving scenario, it is indeed difficult to understand, why is the FDI issue on M&A in the Pharmaceutical space of India is still catching headlines of both national and international media. Instead, should we not now keep our nose to the grindstone and take strategic measures to accelerate the inclusive growth of this life-line industry of the nation?

Stipulations for M&As under the Competition Act:

Section 6(1) of the Act prohibits any person or enterprise from entering into a combination which has an “appreciable adverse effect” on competition in India. It also stipulates that any enterprise which intends to enter into such M&A, shall give notice to the CCI furnishing details of the proposed M&A within thirty days of:

(i)  Approval of the merger by the Board of Directors of the concerned enterprise

or

(ii) Execution of any agreement relating to acquisitions referred to in clause 5(a) & (b) of the Act. S.6(2A) provides a period of 210 days to the CCI to complete the investigation relating to such combinations (if the CCI is unable to come to any conclusion within this period then the combination is deemed to be approved)

S.5 of the Act lays down the transactions which will qualify as combinations for the purposes of the Act. The following is the threshold limit for Mergers and Acquisitions:
• Transactions among Indian companies with combined assets of Rs. 1000 Crores or Rs 3000 Crores in turnover of the merged entity
• Cross-border transactions involving both Indian and foreign companies with combined assets of US $500 million or US $1.5 billion in turnover

• Transactions that have a territorial nexus with India, where the acquirer has US $125 million in assets or US $375 million in turnover in India.

Once any transaction reaches the threshold limit as specified in S.5, the enterprise has to take recourse to the procedure as specified in the Competition Act.

A time to keep our nose to the Grindstone:

Last year, though the growth of the Global Pharmaceutical Industry with a turnover of US$ 752 billion significantly slowed down to just 6.7% due to various contributing factors, the Indian Pharmaceutical Industry continued to maintain a robust of growth of 19% with a turnover of US$ 10.1 billion (IMS October, 2010).

R&D will fuel future growth:

However, on a longer term perspective, the domestic industry growth will be significantly driven by the newer products, which will be the outcome of painstaking innovative research and development initiatives. Keeping this point in mind, the fact that today India accounts less than one per cent of over US$130 billion of the worldwide spending on research and development for pharmaceuticals, despite its known strength in process chemistry and abundant talent pool, has started attracting attention of the government.

Government taking appropriate measures:

It is encouraging to note that the Department of Pharmaceuticals of the Government of India through its ‘Vision 2020’ initiatives is planning to create a new echo-system in the country to promote new drug discovery platforms. This is expected to catapult the country as one of the top five global pharmaceutical hubs, by 2020 attracting additional investments of around US$ 20 billion to the GDP of the country.

Primary role of the industry:

The Primary role of the Research based Pharmaceutical Industry in India, like in many other countries of the world, is to make significant contribution to the healthcare objectives of the nation by meeting the unmet needs of the ailing patients, with innovative medicines. This role can be fulfilled by developing newer medicines through painstaking, time-consuming, risky and expensive basic research initiatives. The research based Pharmaceutical Industry in India is committed to its prime function of discovering and developing new medicines not only for the patients in India but all over the world.

Encouraging innovation will be critical:

Despite immense progress made over the past decades in developing new medicines for numerous acute and chronic illnesses, innovation still remains critically important in the continuous and ever complex battle between disease and good health. Ongoing efforts in Research & Development (R&D) would require a robust national policy environment that would encourage, protect and reward innovation. Improving healthcare environment in partnership with the Government remains a priority for the Research based Pharmaceutical Companies in India, both global and local.

Continuous improvement in ‘Access to Medicines’ is critical:

Therefore, improving access to healthcare in general and medicines in particular should be on the top priority agenda of the policy makers in our country. High incidence of mortality and morbidity burden in a country like ours can only be addressed by improving Access to healthcare through a concerted partnership oriented strategy.

Some concerns still linger:

However, in the new paradigm, which has been designed to foster innovation in the country, there are still some loose knots to be tightened up to achieve the set objectives for the inclusive growth of the nation, in the longer term perspective.

These measures, in turn, will help improving the competitiveness of India vis-à-vis countries like China to attract appreciable investments towards R&D related to pharmaceutical and bio-pharmaceutical products. The Government has already initiated measures to expand the capacity of Indian judiciary and setting- up of fast-track specialized courts that can more effectively enforce Pharmaceutical patents with requisite technical expertise.

Industry should set examples in ‘Good Corporate Governance’ and ‘Global Good Manufacturing Practices’:

Another area of focus should be on corporate good governance. This encompasses adherence to high ethical standards in clinical trials, regulatory and legal compliance, working to prevent corrupt practices, high ethical standard in promotion of medicines and addressing all other issues that support good healthcare policies of the Government. In addition, Pharmaceutical Industry should take active measures to involve all concerned to fight the growing menace of counterfeit and spurious medicines, which significantly affect the lives of the ailing patients, all over the country.

All stakeholders should work in tandem:

It is obvious that the Pharmaceutical Industry alone will have a limited role to address key healthcare issues of our nation, especially when around 400 million Below the Poverty Line (BPL) population will not be able to afford any expenses towards healthcare, at all. All stakeholders like the government, corporate and the civil society in general, must work together according to their respective abilities, obligations and enlightened societal interests to effectively address such pressing issues.

Let us move ahead from ‘Price Control’ to ‘Price Monitoring’:

Despite Medicine Prices in India being one of the lowest in the world, mainly because of stiff competition within the industry and watchful eye of an effective price regulator, 100% of the Pharmaceutical market in the country is currently being price regulated by the Government even with the growth restrictive and ‘draconian’ ‘Third Schedule’ of the DPCO 95.

To enable the Industry to be globally competitive in all aspects of its operations, the government should move ahead from ‘Price Control’ to effective ‘Price monitoring’ mechanism and scrap the growth restrictive measures like, ‘third schedule’ of the current DPCO.

Transaction costs of medicines are too high:

Current transaction costs (all taxes) on medicines in India including trade margins is as high as over 50% of the ex-factory cost of a product.

This cost has been further increased in 2011-12 Union Budget proposal. The government should reduce exorbitantly high transaction costs to make medicines even more economical to the common man.

Conclusion:

I am confident, the entire Pharmaceutical Industry in India would continue to act responsibly with demonstrable commitment to help achieving the healthcare objectives of the nation.

Global players will keep on searching for their suitable targets in the emerging markets like India, just as Indian players are searching for the same in the global markets. This is a process of consolidation in any industry and will continue to take place across the world. Adverse impact of M&A on competition, if any, will now be effectively taken care of by the CCI.

So far as the ‘Financial Reform’ process is concerned, India has always been a slow starter, but it never walked backwards. This tradition, I reckon, will continue in the vibrant democracy of the country, in future too.

By: Tapan J 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.

Dissapointing: No proposal of ‘Healthcare Reform’ in the Union Budget of India for 2011-12: China rolled it out in 2009.

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January 15, 2011 issue of ‘The Lancet’ in an article titled, “Learning from others” states the following:

“Having universal coverage through a public commitment does have costs, including public costs. The proportion of national expenditure on health that is met by the government is 26% in India and 45% in China. Or, to look at a related contrast, while government expenditure on health care in India is only around 1·1% of its GDP, it is around 1·9% in China. One need not be a genius to see that if the government of a country is ready to spend more on health, it could expect better results in terms of the health of the people.”

While comparing India with China, I reckon, one should take into account of larger disease burden in India as compared to China and the cost that India pays due to slow progress of reform processes in a democratic framework with open and free society and the vibrant outspoken media in the country. Further, the healthcare reform processes in China started over a decade earlier than India, resulting in a significant difference in the healthcare infrastructure, healthcare delivery and the healthcare financing systems of both the countries, over a period of time.

Access to safe drinking water and sanitation:

Access to safe drinking water in India may be comparable to other emerging economies, but sanitation condition in India needs radical improvement. According to World Health Organization (WHO, 2009) the Access to potable water and improved sanitation in those countries are as follows:

Country Drinking Water  (% population) Sanitation                     (% population)
India 89 28
Brazil 91 77
China 88 65
Mexico 95 81
South Africa 93 59

Key issues in the Public Hospitals:

The ethical issues, which the patients face, especially, in the hospitals of India, I reckon, have not been reported for China by the Transparency International.

Transparency International India (2005) had reported the following seven key issues and irregularities experienced by the patients at the Government Hospitals in India:

  1. Medicines unavailable: 52%
  2. Doctors suggest a visit to their private clinic: 37%
  3. Doctors refer to private diagnostic centers: 31%
  4. Over-prescription of medicines: 24%
  5. Bribes demanded by staff: 20%
  6. Diagnostics tests done even when unnecessary: 18%
  7. Doctors are absent: 13%

All these continue to happen in India, with no respite to patients, despite ‘Hippocratic Oath’ being taken by the medical profession and the new MCI guidelines for the doctors being in place within the country. Moreover, a miniscule spend of 1% of the GDP by the Government of India towards public healthcare of the nation, is indeed a shame.

Healthcare Reform in China:

Early April, 2009, China, a country with 1.3 billion people, unfolded a plan for a new healthcare reform process for the next decade to provide safe, effective, convenient and affordable healthcare services to all its citizens. A budgetary allocation of U.S $124 billion has been made for the next three years towards this purpose.
China’s last healthcare reform was in 1997:
China in 1997 took its first reform measures to correct the earlier practice, when the medical services used to be considered just like any other commercial product. Very steep healthcare expenses made the medical services unaffordable and difficult to access to a vast majority of the Chinese population.
Out of pocket expenditure towards healthcare services also increased in China:
The data from the Ministry of Health of China indicates that out of pocket spending on healthcare services more than doubled from 21.2 percent in 1980 to 45.2 percent in 2007. At the same time the government funding towards healthcare services came down from 36.2 percent in 1980 to 20.3 percent in the same period.
Series of healthcare reforms were effectively implemented since then like, new cooperative medical scheme for the farmers and medical insurance for urban employees, to address the situation  prevailing at that time.
The core principle of the new phase of healthcare reform in China:
The core principle of the new phase of the healthcare reform process in China is to provide basic health care as a “public service” to all its citizens, where more government funding and supervision will assume a critical role.
The new healthcare reform process in China will, therefore, ensure basic systems of public health, medical services, medical insurance and medicine supply to the entire population of China. Priority will be given to the development of grass-root level hospitals in smaller cities and rural China and the general population will be encouraged to use these facilities for better access to affordable healthcare services. However, public, non-profit hospitals will continue to be one of the important providers of medical services in the country.
Medical Insurance and access to affordable medicines in China:
Chinese government plans to set up diversified medical insurance systems. The coverage of the basic medical insurance is expected to exceed 90 percent of the population by 2011. At the same time the new healthcare reform measures will ensure better health care delivery systems of affordable essential medicines at all public hospitals.
Careful monitoring of the healthcare system by the Chinese Government:
Chinese government will monitor the effective implementation and supervision of the healthcare operations of not only the medical institutions, but also the planning of health services development, and the basic medical insurance system, with greater care.
It has been reported that though the public hospitals will receive more government funding and be allowed to charge higher fees for quality treatment, however, they will not be allowed to make profits through expensive medicines and treatment, which is a common practice in China at present.
Drug price regulation and supervision in China:
The new healthcare reform measures will include regulation of prices of medicines and medical services, together with strengthening of supervision of health insurance providers, pharmaceutical companies and retailers.
As the saying goes, ‘proof of the pudding is in the eating’, the success of the new healthcare reform measures in China will depend on how effectively these are implemented across the country.

Besides Democracy, China has something to learn from India too:

The article, as mentioned above, from ‘The Lancet’ concludes by saying that unlike China, the real progress in India has come out of public discussion and demonstration within the democratic set-up in India. One such program is distribution of cooked mid-day meals to school children and selected interventions in child development in pre-school institutions. Such programs are currently not available in China for development of proper physical and mental health of, especially, the children of the marginalized section of the society

Conclusion:
There exists a sharp difference between India and China in the critical healthcare delivery system. The Chinese Government at least guarantees a basic level of public funded and managed healthcare services to all its citizens. Unfortunately, the situation is not quite the same in India, because of various reasons.
High economic growth in both the countries has also led to inequitable distribution of wealth, making many poor even poorer and the rich richer, further complicating the basic healthcare issues involving a vast majority of poor population of India.
To effectively address the critical issues related to health of its population, the Chinese Government has already announced a blueprint outlining its new healthcare reform measures for the next ten years. How will the Government of India respond to this situation for the new decade that has just begun?

It was very dissapointing to learn from the Union Budget speech of the Finance Minister of India for 2011-12 that the perspective of our Government on the importance of healthcare for the fellow citizens of India, still remains indifferent.

By: Tapan J 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.

The top two reasons for not seeking medical treatment, across the population, are not poor ‘Access to Healthcare’ in India

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“About 1.8 million children under age of 5 die in India every year; 68,000 mothers die due to maternal causes, and 52 million children in the country are stunted”.

“With 70% people living in more than 600,000 villages across rural India, not more than an estimated 30% have access to modern medicine”.

Such sensational headlines could be fallacious at times and may tend to divert the attention of all concerned from some of the key healthcare issues in India. We are indeed too negative in our approach towards a problem solution process. All stakeholders interested in improved healthcare facilities are continuously engaged in an eternal blame game. Government blames the industry and the industry blames the government and so on. In this unfortunate logjam scenario since last several decades, any possibility of breaking it will require active interference by a ‘Cerebral Braveheart”

Moreover, taking advantage of this situation, some groups of people want to progress their vested interests by projecting a ‘Weaker India’ and pontifying with crocodile tears.

Let me now try to explore these issues with hard facts.

Access to ‘round the year’ healthcare facilities in India:

As reported by the Government of India in 2004, access to healthcare infrastructure and services for the rural villages in terms of percentages were as follows (Source:India Health Report 2010) :

  1. Primary Health Centers: 68.3
  2. Sub-Centers: 43.2
  3. Government Dispensaries: 67.9
  4. Government hospitals in urban areas: 79
  5. Private Clinics: 62.7
  6. Private Hospitals: 76.7

I reckon, after implementation of National Rural Health Mission (NRHM) and National Urban Health Mission (NRUM), this situation prevailing in 2004 has improved. However, the scope for further improvement in all these areas still remains very high.

Hence, the shrill voice highlighting around 65% of population of India does not have access to healthcare or medicines seem to be motivated and highly misplaced.

‘Access to Modern Medicines’ is improving in India:

In addition to the above facts, CAGR (volume) of the pharmaceutical industry since the last ten years has been over 10%, leaving aside another robust growth factor being contributed through the introduction of new products, every year. Encouraging growth of the Indian Pharmaceutical Market (IPM), since the last decade, both from the urban and the rural areas certainly signals towards significant increase in the domestic consumption of medicines in India.

IPM maintained a scorching pace of 16.5% growth in 2010. A recent forecast of IMS highlights similar growth trend in 2011, as well.

In addition, extension of focus of the Indian pharmaceutical Industry, in general, to the fast growing rural markets clearly supports the argument of increasing ‘Access to Modern Medicines’ in India. The improvement in access may not exactly be commensurate to the volume growth of the industry during this period, but a major part of the industry growth could certainly be attributed towards increase in access to medicines in India.

For arguments sake, out of this rapid growth of the IPM, year after year consistently, if I attribute just 5% growth per year, for the last nine years over the base year, to improved access to medicines, it will indicate, at least, 57% of the population of India is currently having access to modern medicines and NOT just 35%, as I wrote in this blog earlier.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend. Official communications of the government still quote the outdated statistics, which states that 65% of the population of India does not have ‘Access to Modern Medicines’ even today. No wonder, why many of us still prefer to live on to our past.

Be that as it may, around 43% of the population will still not have ‘Access to Modern Medicines’ in India. This issue needs immediate attention of the policy makers and can be resolved with a holistic approach. A robust model of healthcare financing for all socio-economic strata of the population, further improvement of healthcare infrastructure and healthcare delivery systems are the needs of the hour.

So called ‘Diseases of the Poor’ are no longer the ‘Leading Causes of Death’ in India:

Unlike popular belief that diseases of the poor are the leading causes of death in India. The office of the Registrar General of India (2009) highlights a totally different scenario, where the top five leading causes of death in terms of percentage, have been reported as follows:

  1. Cardiovascular diseases: 24.8
  2. Chronic Obstructive Pulmonary Disease (COPD): 10.2
  3. Tuberculosis: 10.1
  4. Cancer: 9.4
  5. Ill-defined conditions: 5.3

Thus the diseases of the developed world like cardiovascular diseases, COPD and Cancer cause over 45% of the total deaths in India, whereas Tuberculosis, Malaria, Diarrheal and digestive diseases cause around 23% deaths in the country.

The key reasons for not seeking medical treatment are not poor ‘Access to Healthcare’:

As I wrote before, the key reasons for not seeking medical treatment across socio-economic status in the country are not predominantly ‘Poor Access to Healthcare ‘. The following data will vindicate this point:

Reason Rural Poorest 20% Rural Richest 20% Urban Poorest 20% Urban Richest 20%
Financial Reasons 39.7 21.2 37.2 2.3
Ailments not considered serious 27.2 45.6 44.3 84.4
No Medical facilities 12.8 10.0 1.6 _
Others 20.3 23.2 16.9 13.3
Total 100 100 100 100

(Source: India Health Report 2010)

Conclusion:

Thus even if the government ensures ‘Access to Healthcare’ to 100% of the population of India by taking all drastic infrastructural, policy and delivery measures, still a large section of the population both rich and poor and from urban as well as rural India will not seek medical treatment assuming many of their ailments are not serious enough. Such a situation will definitely not materially improve the healthcare scenario of India, adversely affecting the economic progress of the country by a robust productive population.

This necessitates continuous disease awareness campaigns with active participation of all stakeholders, including the civil society across the country, sooner rather than later, in tandem with all measures as will deem necessary.

By: Tapan J 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.

Have the successive ‘Drug Policies’ of India delivered? If not, why not?

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January 11, 2011 edition of ‘The Lancet’ in its article titled, “Financing health care for all: challenges and opportunities” commented as follows:
“India’s health financing system is a cause of and an exacerbating factor in the challenges of health inequity, inadequate availability and reach, unequal access, and poor-quality and costly health-care services. The Government of India has made a commitment to increase public spending on health from less than 1% to 3% of the gross domestic product during the next few years…. Enhanced public spending can be used to introduce universal medical insurance that can help to substantially reduce the burden of private out-of-pocket expenditures on health.”
The “Drug Policy “of India:
The new ‘Drug Policy’ of India, which is long overdue, should address all these key issues, as articulated by ‘The Lancet’. Unfortunately, outdated ‘1995 Drug Policy’ is still operational, since last fifteen years. The reason for inordinate delay in putting a new, robust and more reform oriented ‘Drug Policy ’in place is still not known to many, as it is probably languishing in the prison of indecision of the bureaucracy of the country.
The ‘Drug Policy 1986’ clearly enunciated the basic policy objectives relating to drugs and pharmaceuticals in India. After around 25 years, should not the government, at the very least, ponder to assess whether the successive drug policies have delivered to the nation the desirable outcome or not?
In my view, the objectives of the new ‘Drug Policy’ should help accelerating the all-round inclusive growth of the Indian pharmaceutical industry to make it a force to reckon with in the global pharmaceutical space. The drug policies are surely not formulated just to implement rigorous price control measures for drugs. The policy should also formulate other key measurable initiatives, assigning specific accountabilities, to contribute significantly towards achieving the healthcare objectives of the nation. The policy should also encourage working closely and in tandem of all the related ministries of the government.
Financial protection against medical expenses for all is very important:
One of the very major issues in the healthcare space of the country is high out of pocket expenses by the majority of our population. “Financial protection against medical expenditures is far from universal with only 10% of the population having medical insurance” in India. (Source: Lancet Jan 11, 2011).
A comparison of private (out of pocket) health expenditure: (Source: Lancet)
1. Pakistan: 82.5% 2. India: 78% 3. China: 61% 4. Sri Lanka: 53% 5. Thailand: 31% 6. Bhutan: 29% 7. Maldives: 14%
The key issue remains unresolved:
The above edition of ‘The Lancet’ has highlighted that outpatient (non-hospitalization) expenses in India is around 74% of the total health expenses in India and the drugs account for 72% of this total outpatient expenditure. The study has also highlighted that 47% and 31% hospitalization in rural and urban areas respectively are financed by loans and sell of assets.
Drug Prices in India:
The cost of medicines, especially the essential medicines in India, is one of the lowest in the world, even more economical than our neighboring countries like, Bangladesh, Sri Lanka and Pakistan. Moreover, as per DIPP data the inflation index of medicine in 2009 was much lower at 112.32 against the same for all commodities in the same year at 127.47. National Pharmaceutical Pricing Authority (NPPA) also indicated that there was almost no rise (+0.5%) of drug prices in 2010 over the previous year because of effective ‘Drug Price Monitoring mechanism’ by the regulator and fierce market competition.
Around 38% – 40% of Indian population can’t afford to spend on medicines:
While framing the ‘Drug Policy’, the government should also keep in mind that a population of around 38 to 40% of India, still lives below the poverty line and will not be able to afford any expenditure towards medicines. Adding more drugs in the list of essential medicines and even bringing them all under stringent price control will not help the country to resolve this important issue, in the prevailing situation.
The key focus area of successive ‘Drug Policies’ of India has been just ‘price’:
The reform initiatives enunciated by the government in the successive drug policies have been considered by the pharmaceutical industry, in general, as far from satisfactory. In the era of globalization, where market forces play a dominant role to control prices, including the essential commodities, the rigors of stringent price control on pharmaceuticals need to be addressed urgently. This was re-enforced even in the ‘National Economic Survey Report of 2009′.
Will continuation of the same focus be able to resolve the issue?
I do not think so. Continuation of the focus on price since last four decades has certainly enabled the government to ensure that drugs prices in India are cheapest in the world. However and very unfortunately the ‘Drug Policies’ with focus on price alone have not been able to ensure even today that 47% and 31% of hospitalization in rural and urban areas, respectively, are financed by robust healthcare financing systems and not by private loans and selling of assets by individuals.
Expectations from the new ‘Drug Policy’:
Adequate and immediate policy measures to respond to the needs of a robust healthcare financing model for all strata of the society are absolutely critical to address this pressing issue. Effective penetration of health insurance, will, therefore, be one of the key growth drivers not only for the Indian pharmaceutical industry, but also to ensure its inclusive growth, as desired by many.
Conclusion:
Unfortunately, the ‘Drug Policies’ of India have not been able to keep pace with the globalization process of the country as compared to even those industries, which are dealing with the essential commodities, like pharmaceuticals. The amended Indian Patents Act came into force in the country in January 2005. The drug policy of India, for various reasons, has not been able to articulate, as yet, specific key measures to encourage innovation, giving a new thrust to the pharmaceutical R&D space of the country, as much as it should have been.
The ‘New Drug Policy’ should have clear and transparent provisions of stringent drugs ‘price monitoring’ mechanism by the NPPA. The policy should also include an equally transparent system to ensure that errant pharmaceutical players, if any, who will be caught with profiteering motives, under any garb, at the cost of precious lives of the ailing patients, are brought to justice with exemplary punishments, as will be defined by law.

By: Tapan J 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.

Gone 2010…Comes 2011: Looking Back…Looking Ahead at the Healthcare Space of India

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Our country, especially the media and the politicians (perhaps not so much the ‘Aam Aadmi’), appears to be totally engrossed now in uprooting the issue of corruption from the soil of India, once and for all. Politicians of all hues are not showing any sign of respite to let go this opportunity, without squeezing out the last drop of ‘political elixir’, out of the current high level of self-created cynicism. This is very important for them in the run-up to the next general and state elections for ultimate win in the political power-game. The ‘common man’, like you and me, on the contrary, is perhaps thinking about job creation, financial progress, infrastructure development, education and health.

The Fourth Estate of the country, especially the Electronic Media, seems to be lapping up any news, which could even remotely help the TRPs of their respective news channels going north.

In a chaotic situation like this, when even the country’s parliament is defunct, it appears, by and large the entire nation is currently being encouraged to get deeply engaged in ‘self-flagellation’, as it were. There seems to be a desperate need to prove to the world, time and again, how bad the Indians are. The ‘Brand India’ after taking so many powerful blows on its chin, is in tears now.

Be that as it may, has India achieved anything in the year 2010 with a public spend of just around 1% of the GDP towards healthcare? Let me try to capture some of those hard facts, which could appear as a laundry list though, at the very onset of the brand New Year. I have collated these details from various published sources.

Some doomsayers with ever ‘pontifying’ mind-set would nevertheless keep brushing all these aside. However, acknowledging these achievements, I would rather say, “all these are too little even for too few”.

Whatever it is, I am trying to put these details in one place for a comprehensive record of the year, just gone by.

Here it goes:

I. Healthcare Indicators:

I. The number of polio cases has sharply declined during the year. Only 41 polio cases have been reported as on November 30, 2010, against 633 in the corresponding period of 2009.

II. Adult HIV prevalence has declined from 0.41% in 2000 to 0.31% in 2009. The number of new annual HIV infections has declined by more than 50% from 2000 to 2010.(Source: National AIDS Control Organization )

III. Leprosy Prevalence Rate has declined to 0.71/10,000 in March, 2010. 32 State/UTs have achieved elimination by March 2010, leaving only Bihar, Chhattisgarh and Dadra & Nagar Haveli.

IV.TB mortality in has gone down from over 42/lakh population in 1990 to 23/lakh population in 2009 as per the WHO global report 2010. The prevalence of the disease in the country has reduced from 338/lakh population in 1990 to 249/lakh population by the year 2009 (Source: WHO global TB report, 2010).

II. New Initiatives:

  1. A bivalent oral polio vaccine (bOPV) was launched in the country in Bihar on January 9, 2010.
  2. A ‘Sports Injury Centre’ was dedicated to the nation at the Safdarjung Hospital, Delhi, with an inpatient capacity of 35 beds with all modern facilities.
  3. The Indian Pharmacopeia Commission published the 2010 version of Indian Pharmacopeia.
  4. Upgradation of the National Centre for Disease Control (NCDC), Delhi with an estimated cost of Rs 382.41. Crore.
  5. A scheme to support the State Government Medical Colleges for conducting paramedical courses with a total proposed project cost of Rs.1156.43 Crore.
  6. Setting up of 132 Auxiliary Nurse Midwives training schools at an estimated cost of Rs.5.00 Crores per school and 137 General Nursing and Midwifery training schools at an estimated cost of Rs.10.00 Crores per school.
  7. Ministry of Health and Family Welfare and Ministry of Railways signed a memorandum of Understanding for development of healthcare infrastructure along the railway network of the country.
  8. A new ‘National Program for Health Care of the Elderly’ (NPHCE) was approved with an outlay of Rs. 288.00 Crore for 2010-11 & 2011-12.
  9. Urban Slum Health Check-up Scheme for Diabetes and Blood pressure was launched in New Delhi on November 14, 2010. Pilot project is in progress in Bangalore, Hyderabad, Kolkata, Mumbai, Chennai and Ahmedabad.
  10. The revised National Program for Prevention & Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS) was approved with a budgetary provision of Rs. 1230.90 Crore
  11. Under Central Government Health Scheme (CGHS), a pilot project of a standalone hemodialysis center has started at Sadiq Nagar CGHS Wellness center in collaboration with M/S Alliance Medicorp (India) Limited, Chennai, under Public Private Partnership (PPP).

III. National Rural Health Mission (NRHM)

  1. Healthcare Infrastructure:

I. New construction and upgradation of 433 District Hospitals, 2921 Community Health Centers (CHCs), 4165 Primary Health Centers (PHCs) and 11856 Health Sub-Centers.

II. 9120 PHCs became functional for 24 hours, as compared to only 1262 in 2005.

  1.                III.  2426 health facilities which include District Hospitals, Sub-District Hospitals and Community Health Centers started functioning as First Referral Units (FRUs) as compared to 955 in 2005.

 

  1.                IV.  1653 Mobile Medical Units are operating in different States providing services in the interior areas.
  2. Human Resource:

I. 2394 Specialists, 8284 MBBS doctors, 9578 AYUSH doctors, 26734 staff nurses, 53552 ANMs and 18272 other Para-medical staff were added to the health system to improve the services.

II. Over 8.33 lakh trained ASHA/community workers were engaged to link the households with the health facility.

 

3.  Healthcare System:

 

I. State and District Health Societies were set up in all the States and Union Territories (UTs).

  1.                               II.  Planning capacity at the district level was strengthened and Integrated District Health Action Plan prepared by 540 districts.

4. Community Engagement:

Effective and efficient decentralized management of health system is being achieved through communalization of facilities, adequate and flexible financing with community accountability, monitoring progress against Indian Public Health Standards, innovations in human resources, together with engagement and building of capacity at all levels.

I. 29904 ‘Rogi Kalyan Samitis’ were registered in the health facilities up to PHC level.

  1.                               II.  4.93 lakh Village Health and Sanitation Committees (VHSCs) were constituted and 4.82 lakh joint accounts at the Village Health and Sanitation Committees and Health Sub-Centers were opened.
  2.                            III.  23.61 million Village Health & Nutrition Days were held at village level over the last three years to provide immunization, maternal and child healthcare and other public health related services at ‘Anganwadi’ centers.

5. Service Delivery:

I. Under the ‘Janani Suraksha Yojana (JSY)’, which is cash transfer scheme to promote institutional delivery, over 100.78 lakh pregnant mothers were covered in 2009-10 as against 7.39 lakh in 2005-06.

  1.                               II.  53500 male health workers were hired for all the Sub Health Centers (SHC) in 235 high focus districts for disease control with a total costs of Rs. 385.52 Crores per year.

6. Family Planning:

  1.                                 I.  Fixed day Fixed Place Family Planning Services round the year through PHCs
  2.                               II.  ‘Santushti’ strategy was implemented through ‘Janasankhya Sthrirata Kosh’, to provide private sector gynecologists and vasectomy surgeons an opportunity to conduct sterilization operations through Public Private Partnership (PPP) initiatives.

7. Disease Control:

  • National Tuberculosis Control Program:

I. Treatment success rates increased from 25% to 87% in 2010.

II. Death rates have declined from 29% to 4% in 2010

III. Treatment success rate is now >85% and new sputum positive (NSP) case detection rate is currently more than the global target of 70%.

  • The National Program for Control of Blindness started providing financial assistance to NGOs for cataract operations and treatment of other eye diseases.
  • 75 districts were added to the National Program for Prevention and Control of Deafness (NPPCD), making it a total of 176 districts of 15 States and 4 UTs. Rs.11.50 Crore has been provided for the current year.
  • Phase–I of ‘Pradhan Mantri Swasthya Suraksha Yojana’ projects commenced with an allocation of Rs 9307.60 Crore.

IV. Healthcare Legislation:

1. The Indian Medical Council (Amendment) Bill 2010 was introduced in the ‘Lok Sabha’ to give effect to amendments to the IMC Act 1956 by which in certain specified situations Government can dissolve the elected Medical Council and replace it, for a period not exceeding one year with a nominated Board of governors.

2. The “National Institute of Mental Health and Neuro Sciences Bangalore Bill, 2010” was introduced in the ‘Rajya Sabha’ to facilitate NIMHANS to develop as an Institute of National Importance on the lines of All India Institute of Medical Sciences, New Delhi,

3. The Clinical Establishments (Registration & Regulation) Bill, 2010 was passed by both Houses of Parliament and notified. The Act aims at providing registration & regulation of clinical establishments in the country with a view to prescribing minimum standards of facilities and services.

V. International Cooperation:

  • A MoU on the Establishment and Operation of Global Disease Detection (GDD) – India Centre, between National Centre for Disease Control, New Delhi and Centre of Disease Control and Prevention, Atlanta, USA, was signed during the recent visit of the US President Mr. Barack Obama in November 2010.
  • India raised the issue of counterfeit medicines and “urged countries to steer clear from the commercially motivated debates over the ‘counterfeit’ issue which have hampered public health by preventing access to good quality and low cost generic drugs”. As a result WHA adopted a resolution establishing a time limited and result oriented working group on substandard / spurious / falsely-labeled / falsified / counterfeit medical products comprised of and open to all Member States.

VI. Health Research:

I. Draft National Health Research Policy prepared during the year, is being debated across the country.

II. Draft Policy for Knowledge Management Policy for Health – services, education and research prepared and debates completed.

III. Based on guidelines for use of assisted reproductive technologies a draft Bill has been prepared.

IV. Guidelines for management of cancers of buccal mucosa, stomach & cervix has been developed.

My wish-list for 2011:

In my view, the following 5 important issues, if addressed effectively in 2011,could make a significant impact on the Healthcare space of India:

1. Announcement of a robust, reform oriented long overdue pharmaceutical ‘Drug Policy’ in India.

2. More budgetary allocation and a transparent delivery system for the National Rural Health Mission (NRHM) and the Rashtriya Bima Yojana (RBY) to improve access to healthcare and ensure inclusive growth in the healthcare sector, covering majority of the population of the country.

  1.               3.  A strong healthcare financing model covering all strata of  society to reduce  the burden of huge ‘out of pocket’ healthcare expenses and make healthcare more accessible and affordable to all.

- The 2010 ‘World Health Report’ of the ‘World Health Organization (WHO)’ “provided governments of various countries with practical guidance on ways to finance healthcare expenses. Taking evidence from all over the world, the report showed how all countries, rich and poor, can adjust their health financing mechanisms so more people get the healthcare they need.” I reckon, policy makers in India will exert enough efforts in 2011 for speedy implementation of such reform oriented healthcare initiatives in the country in its endeavor to fulfill the long overdue promise – ‘health for all.’

4. Progressive policy and fiscal measures to encourage innovation and pharmaceutical R&D within the country

5. Speedy resolution of all Intellectual Property related disputes through ‘Fast Track IP Courts’ to create appropriate innovation oriented ‘Echo System’ in the country.

Conclusion: 

All the achievements of the year just gone by, are good… but are these enough? India in its ‘Healthcare Policy’ statement, way back in mid-1980 promised, ‘health for all’ by the year 2000. We are not there, not just yet.

Though the country is trying hard to achieve the ‘Millennium Development Goals (MDG)’ by 2015, as the situation stands today, it appears a remote possibility, in many areas.

Non-communicable diseases are now posing a major threat to the country, significantly increasing the burden of disease. The World Health Organization (WHO) has cautioned that India would be the ‘diabetic capital’ of the world with a population of around 80 million diabetic patients by 2030. Further, the ‘Cardiological Society of India’ predicts that there would be around 100 million cardiac patients in the country by 2020, which roughly works out to be around 60% of the total cardiac patient population of the world.

Keeping all these in view, the achievements made by the country in the year 2010, though should be taken note of… but the moot question still remains, ‘aren’t all these too little even for too few?’

By: Tapan J 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.

To accelerate increasing ‘Access to Modern Medicines’ in India: A Strategic Approach

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Currently no one knows what the ‘Access to Modern Medicines’ in India is, in real term. Like many others, both local and global. I myself was quoting the World Medicines Situation of 2004 report, the base year of which is actually 1999. Thus there should not be even an iota of doubt in anybody’s mind that the above reported situation has changed quite significantly during the last decade in India and the statement that both the government and the industry alike has been making since then, ‘only 35% of the population of the country, against 53% in Africa and 85% in China has access to modern medicines’, is indeed quite dated. It does not make sense, at all, in the recent times of the Pharmaceutical industry in India.

More surprisingly, an updated information on the subject does not seem to be available anywhere, as yet, not even with the World Health Organization (WHO). However, the good news is, it has been reported that the ‘World Medicines Situation’ is currently being updated by the WHO.

 Access to modern medicines is improving in India:

Be that as it may, CAGR volume growth of the pharmaceutical industry since the last ten years has been around 10%, leave aside another robust growth factor being contributed through the introduction of new products, every year. Encouraging growth of the Indian Pharmaceutical Market (IPM), since the last decade, both from the urban and the rural areas certainly signals towards significant increase in the domestic consumption of medicines in India. In addition, extension of focus of the Indian pharmaceutical Industry, in general, to the fast growing rural markets clearly supports the argument  of increasing ‘Access to Modern Medicines’ in India. The improve in access may not exactly be commensurate to the volume growth of the industry during this period, but a major part of the industry growth could certainly be attributed towards increase in access to medicines in India.

For arguments sake, out of this rapid growth of the IPM, year after year consistently, if I attribute just 5% of the growth per year, for the last nine year over the base year, to improved access to medicines, it will indicate, at least, 57% of the population of India is currently having access to modern medicines and NOT just 35%, as I wrote in this blog earlier.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend. Official communications of the government still quote the outdated statistics, which states that 65% of the population of India does not have ‘Access to Modern Medicines’ even today. No wonder, why many of us still prefers to live on to our past.

Be that as it may, around 43% of the population will still not have ‘Access to Medicines’ in India. This issue needs immediate attention of the policy makers and can be achieved with a holistic approach to resolve this issue. A robust model of healthcare financing for all socio-economic strata of the population, further improvement of healthcare infrastructure and healthcare delivery systems are the need of the hour.

Percentage growth in the healthcare budget is higher than that of the GDP:

With the increase of healthcare expenditure by 15% for 2008-09 and further increase in 2010-11, as announced by the Finance Minister in his recent Budget Speech, the healthcare expenditure as a percentage to GDP still remains around 1.0%, which is quite inadequate to address the key healthcare issues of the country.

The Prime Minister has already has expressed his intent that India will be able to increase its public healthcare spend to around 2.5% of the GDP, when GDP growth will touch the double digit figure of 10%, which I reckon, is no longer a pipe dream.

Explore a Public-Private Partnership (PPP) with the stakeholders of the Pharmaceutical Industry:

To address the critical issue of access to modern medicines, policy makers should now actively consider a series of closely integrated PPP initiatives. These PPP initiatives will initially include ‘Below the Poverty Line’ (BPL) families of our country, which not only constitute a significant part of our population, but also will have almost nil purchasing power for medicines. Thereafter, the scheme, slightly modified, should be extended to all ration card holders in India.

Possible impact of such PPP initiatives on improving access to medicines:

If such PPP initiatives are carefully and innovatively strategized, carefully planned and diligently executed, the access to modern medicines in India could increase from current 57% to over 63% of our population within a year’s time  and to over 82% of the population over a period of next five years.

A ‘Back of the Envelope’ Strategy Outline:

The Objective:

To improve access to medicines to over 60% of the population one year after the execution of the strategy and to over 80% within the next five years. The key stakeholders, especially the pharmaceutical companies in India, will work closely with the Government under PPP initiatives for the improvement of access to modern medicines initially to the BPL families, significantly, who have almost no purchasing power for medicines.

The Plan:

- The stakeholders, mainly the pharmaceutical industry, to work out a suitable methodology to help the Government to reach all pharmaceutical formulations covered under ‘National List of Essential Medicines (NLEM)’ to the BPL families across the country and gradually extend it to all ration card holders in India.

- The government would extend appropriate Tax cuts to the concerned companies, as an incentive towards their involvement in the PPP initiatives.

- The National Pharmaceutical Pricing Authority (NPPA) would continue to strictly implement its drug price monitoring mechanism for all categories of drugs to keep their prices well under control, always.
Key Assumptions:
- According to Planning Commission of India (2007) the population of India is 116.9 Crore or 1.169 billion.

- According to ‘Centre for Science & Environment (August 2007)’ the latest figures on poverty place 27% of India’s population below the poverty line (BPL) out of which 72% reside in rural areas.

- No price of medicines will be affordable to the BPL families.

- The National Sample Survey Organization (NSSO) report on “Public Distribution System & Other Sources of Household Consumption, 2004 – 05” shows that only 28% of the rural poor have benefited from any type of government food assistance schemes, including ‘Public Distribution System’ and for urban areas the figure is just 9.5%. That means about 72 Million people below the poverty line are having ration cards.

- According to 1995 World Bank Study, the established per capita health spending is around Rs.320 per year.

- McKinsey in their report “India Pharma 2015” has stated that expenditure on medicines is 15% of total healthcare spend i.e. Rs.48 per year.

Methodology:

- Identify the number of BPL families who hold ration cards to receive free/subsidized medicine.

- Determine the cost to be incurred by the Government for purchase of medicines under NLEM.

- Devise a system of generating commensurate funds to improve access to BPL families.

- Operationalize the distribution of medicines to BPL families with public transparency

- Increase penetration of ‘Jan Aushadhi’ outlets simultaneously as a supportive incremental measure

Projected increase in ‘Access to NLEM Drugs’:

Million
Population of India

1169
27% of Population is BPL

316
72% rural

228
28% urban

88
28% of 228 million have ration cards

64
9.5% of 88 million have ration cards

8
Total BPL ration card holders

72
Current Access to Modern medicines of 57%

666
When all ration card holders get NLEM drugs the access improves to:

738

�
SO, IF AT LEAST THE BPL RATION CARD HOLDERS GET NLEM MEDICINES, ACCESS IMPROVES FROM 57% TO 63.2%.

Cost implications of Increasing Access from 57% to 63.2%:

  1.  72 million ration card holders will need Rs.48 worth medicines per year i.e. Rs.3456 million or Rs.346 Crores.
  2. If Industry contributes 0.6% of its turnover which will attract full tax (both direct and indirect) exemptions from the Government, the industry contribution works out to Rs.170 Crores.
  3. A similar amount should be provided by the Government for purchase of free/subsidized medicines for exclusive dispensing to the BPL families.

To operationalize improved ‘Access to Medicines’:

- All ration card holders to be provided with a separate card (if not a smart card) for issue of medicines with a Unique Identification Number.

- Each ration shop will have a separate counter named ‘Jan Aushadhi’ for medicine, which will cater to only registered BPL families.

- Government to arrange to train the Ration Shop owners/employees in Pharmaceutical storage and dispensing

- Doctors of Primary Healthcare Centers, Block Dispensaries will be directed to provide free treatment and prescribe NLEM medicines to the members of BPL families holding such ration cards.

- Subsidized/free supply of medicines will be made against prescriptions from the ‘Jan Aushadhi’ counters of the Ration Shops to these families.

- The doctors’ prescriptions with a copy of the bill will be retained by the respective Ration Shops to account for such purchases of medicines by the BPL families.

- More & more members of BPL family will be encouraged to register for ration cards and be eligible for free / subsidized medicines.

Conclusion:

On completion of this scheme for BPL families and after covering all ration card holders, overall the access to modern medicines in India could increase from 57% to over 80% over a period of 5 years.

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.