Tag Archives: Access

India’s ‘National Health Policy 2015′ Needs Wings To Fly

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Ensuring ‘access to healthcare for all’ has remained a key well-articulated good intent of all the successive Governments in India, cutting across the political regimes, since 1983.

The Union Ministry of Health & Family Welfare published the first “National Health Policy (NHP)”, in 1983, which was endorsed by the Indian Parliament in the same year. The policy categorically enunciated the following:

“India is committed to attaining the goal of ‘Health for All by the Year 2000 A.D.’ through the universal provision of comprehensive primary healthcare services”.

For the first time after independence, this document captured the key directions and dimension of the national health policy such as, the creation of infrastructure for primary healthcare; close co-ordination with health-related services and activities (like nutrition, drinking water supply and sanitation); active involvement and participation of voluntary organizations; provision of essential drugs and vaccines; qualitative improvement in health and family planning services; provision of adequate training; and medical research aimed at the common health problems of the people. However, it did not elaborate much about the Universal Health Care (UHC).

Abysmal public expenditure to meet the key goal of NHP 1983:

The NHP 1983, which was revised in 2002, recommended an increase in public health expenditure to 2.0 percent of GDP in 2010.

The 12th Fiver Year Plan of the Government of India again acknowledged that the health sector expenditure by the central and state governments, both plan and non-plan will have to be substantially increased during the plan period. It also stated that the health expenditure was increased from 0.94 per cent of GDP in the 10th Plan to 1.04 per cent in 11th Plan and it should be increased to 2.5 per cent of GDP by the end of 12th Five Year Plan period.

That said, the bottom-line is, the current public spending on health is stagnating around 0.9 percent of the GDP. Leave aside implementation of the 1983 NHP goal of providing “Health for all by the year 2000 A.D”, even in 2015, India continues to grapple with the challenges for ensuring availability, accessibility, affordability and quality of comprehensive healthcare to all, though various governments have come and gone during this period. India’s rank in the Human Development Index (HDI) also remains at pitiful 136 out of 187 countries and despite improvements, India is likely to miss some key MDG targets in 2015.

Pockets of improvements – mostly grossly inadequate:

In the midst of gloom and doom in the health space of India, the 57 page draft NHP 2015 captures some of commendable improvements, as well, and very rightly so, which I am not going to repeat in this article.

A June 2013 report of IMS Institute also acknowledges that the extent of change and improvement in India’s healthcare system over the past decade is remarkable. The Government of India’s initiatives, as well as private sector actions and public-private-partnership programs, have contributed to this progress. Yet a lot more remains to be done.

The report highlights the following areas, which are worth taking note of:

  • The physical accessibility of public or private healthcare facilities is a challenge in rural areas. By contrast, in urban areas, accessibility is less of a challenge due to more facilities being available.
  • An increasing proportion of the population is using private healthcare 
facilities for both in-patient and out-patient treatments. Long waiting times and absence of diagnostic facilities are among the main reasons private healthcare facilities are chosen over public centers for in-patient treatment. For out-patient treatment, the availability or doctors and quality of care are cited as reasons for selecting a private healthcare facility. However, patients would readily switch to public healthcare centers if these issues were addressed, the research report states.
  • The cost of treatment at a public healthcare facility is much more affordable than at a private center. However, due to lack of physical reach, availability of quality treatment and other practices, patients are forced to use more expensive private facilities, thus exacerbating affordability challenges. The majority of Out of Pocket (OoP) expenses are due to medicines.
  • Overall, while there are pockets of improvements, significant healthcare access challenges continue to exist for the Indian population, especially in rural areas.

OoP expenses on health is one of the highest in India:

Out of Pocket (OoP) expenditure on health is one of the highest in India at 61.7 percent, as acknowledges by the draft NHP 2015, as well. This is against 35.3 of China, 30.6 of Brazil, 44.6 of Sri Lanka, 61.3 of Bangladesh, 14 of Thailand, 8.9 of United Kingdom and 11.8 of the United States. The reason being, due to lack of access to cheaper and quality public health facilities, a vast majority of the Indian population is forced to turn to expensive private healthcare providers, as confirmed by the IMS Institute in its above report..

Suggested framework for a comprehensive view of healthcare access:

The same June 2013 report of IMS Institute states that healthcare access has varying meaning in different countries, especially across developing and developed economies. In the developed economies, it is often equated to the access status of healthcare insurance, whereas in the developing economies, it is viewed primarily across two dimensions: the physical reach of a healthcare facility, and affordability to the patient.

Thus, it is important to build a framework that would provide a comprehensive view to healthcare access. The framework should be able to define healthcare access in the Indian context, aided by other parameters that are key in ensuring quality treatment to a patient.

The framework also allows understanding of each component of healthcare access separately, including inter-dependencies.

According to IMS Institute, healthcare access has 4 key dimensions as follows:

Physical Reach:

This component defines physical accessibility of a requisite healthcare facility, i.e. availability of a healthcare facility having an out-patient department (OPD) for common ailments, and an in-patient department (IPD) for hospitalization. These facilities may either be public or private in nature. Physical reach is defined as the ability to enter a healthcare facility within 5 kilometers (5km) from the place of residence or work.

Availability/Capacity:

This component defines availability of the requisite healthcare resources to provide patient treatment, i.e. doctors, nurses, in-patient beds, diagnostics, consumables, etc. The availability is governed by minimum specifications defined by the Government of India for public healthcare facilities, and international organizations such as W.H.O.

Quality/Functionality:

This component defines the quality of the healthcare resources available at the point of patient treatment.

Affordability:

This component defines the ability of a patient to afford complete treatment for the illness or disease.

Draft NHP 2015 – ‘Health is a fundamental right’:

Though the above parameters were not quite considered, as such, to define access to healthcare, the new government has done a good job with the draft NHP 2015, while updating NHP 2002. The new draft has evoked good interest among the stakeholders as healthcare has become very costly in India and continues to go north, steadily, as mentioned above.

The draft has covered lots of ground related to health, spanning across the change in the nature of the nation’s disease burden from communicable to non-communicable diseases, shortage of human resources in health sector and right up to the use of information and communication technology. It’s a hard fact that low investment in public health has been placing India consistently at the lower rungs of the development indices.

Against the backdrop of paltry public expenditure on health, the Union Ministry of Health and Family Welfare through its draft National Health Policy, 2015 (NHP 2015) has proposed making health a fundamental right, similar to denial of health an offence.

The draft policy reiterates, “Many industrialized nations have laws that do so. Many of the developing nations that have made significant progress towards universal health coverage, such as Brazil and Thailand, have done so, and … such a law is a major contributory factor. A number of international covenants to which we [India] are joint signatories give us such a mandate – and this could be used to make a national law. Courts have also rulings that, in effect, see health care as a fundamental right — and a constitutional obligation flowing out of the right to life.”

The draft NHP 2015 even states, “The Centre shall enact, after due discussion and on the request of three or more states a National Health Rights Act, which will ensure health as a fundamental right, whose denial will be justiciable.”

The new draft policy acknowledges that primary healthcare of date covers not more than 20 per cent of the health needs and that a very high OoP health expenditure (over 61 percent on medicines) is pushing nearly 63 million people into poverty every year.

One of the key features of the new draft policy is an universal medical insurance scheme that will be virtually free for the poor and affordable for the rest. The government expects the stakeholders to send their comments and suggestions on the draft policy by February 28, 2014.

However, the draft NHP 2015 does not deliberate on some other important areas, such as specific time-bound commitments on public investments, insurance cover on outpatient treatments & care and appropriate regulations for the private sector to contain healthcare costs.

Cut on current year health budget raises may eyebrows:

In the midst of the prevailing lackluster public healthcare scenario, just in the last month (December 2014), the government has reportedly ordered a US$ 948 million (20 percent) cut in its 2014-15 healthcare budget due to fiscal constraints.

It is worth mentioning that at 0.9 percent of GDP, India’s public health expenditure is already among the lowest in the world, as compared to compared to 2.7 percent in China, 4.2 percent in brazil, 1.4 percent in Bangladesh, 1.6 percent in Sri Lanka, 2.9 percent in Thailand and 8.5 percent in the United States.

In addition to the healthcare budget, the finance ministry has reportedly also ordered a spending cut this year for India’s HIV/AIDS program by about 30 percent to US$ 205.4 million.

A report from Reuters, quoting one of the health ministry officials, stated that this budget cut could crimp efforts to control the spread of diseases. More newborns die in India than in poorer neighbors such as Bangladesh, and preventable illnesses such as diarrhea kill more than a million children every year.

Needs wings to fly:

The draft NHP 2015 has come thirteen years after the previous NHP 2002 and following a 20 percent cut even on the paltry budgetary allocation on public health of this financial year. Thus, many skeptics ponder whether this well drafted NHP 2015, pregnant with many great promises, would ever see the light of the day.

The skepticism gets further reinforced, when the draft NHP 2015 says that to achieve its objectives the budgetary allocation on health would be increased to 2.5 percent of the GDP. The Government proposes to rely mostly on general taxation, besides creating a health cess similar to that of education cess, for effective implementation of this health policy. The draft indicates that 40 percent of this budget would come from central expenditure.

A quick reading of the following text from the Reuter’s report makes the scenario even more intriguing:

“The retrenchment (budget cut) could also derail an ambitious universal healthcare program that Modi wants to launch in April. The plan aims to provide all citizens with free drugs and diagnostic treatments, as well as insurance benefits.

The cost of that program over the next four years had been estimated at 1.6 trillion rupees (US$ 25 billion). The health ministry officials had been expecting a jump in their budget for the coming year, in part to pay for this extra cost.

‘Even next year we don’t think we’ll get a huge amount of money,’ said one official, adding that it was now unclear how the new program would be funded.”

Thus, the key point to ponder now: Would the NHP 2015 have wings to fly?

Is India just producing various documents on health without action?

Not too long ago, in October 2010, the Government of India constituted a ‘High Level Expert Group (HLEG)’ on Universal Health Coverage (UHC) under the chairmanship of the well-known international medical expert Prof. K. Srinath Reddy. The HLEG was mandated to develop a framework for providing easily accessible and affordable health care to all Indians.

The HLEG Report defined UHC as follows:

“Ensuring equitable access for all Indian citizens, resident in any part of the country, regardless of income level, social status, gender, caste or religion, to affordable, accountable, appropriate health services of assured quality (promotive, preventive, curative and rehabilitative) as well as public health services addressing the wider determinants of health delivered to individuals and populations, with the government being the guarantor and enabler, although not necessarily the only provider, of health and related services”.

I discussed this subject in my blog post of December 12, 2011, titled “Health being a basic human right, the proposal for Universal Health Coverage augurs well for India”

Most probably, this excellent HLEG report on UHC has already become an archival material for the posterity to refer, if and when required.

Interestingly, despite governments of different political dispensation ruling the country since 1983, the key goal of the NHP 1983 to ‘provide healthcare to all by the year 2000’ continues to haunt us over the last three decades.

Public healthcare infrastructure, especially in rural India, still remains grossly inadequate.

In most of the villages in India, primary health facilities, if available, (except in some progressive states), continue to be shoddy, fragile and is gasping for breath, as it were. Recent examples of Bilaspur (Chhattisgarh) sterilization tragedy in November 2014, when 15 women died or the incident of last week in Chatra district of Jharkhand, where about 40 women allegedly underwent sterilization under torchlight, would vindicate this point.

Much hyped program of “free essential drugs for all, from the government hospitals” has not been universally implemented, just yet…again due to financial resource constraints and paucity of other wherewithal.

Conclusion:

Currently, none of the newer constitutional rights, such as right to food, education and employment, enacted by the lawmakers for the well being of the concerned people of the country, is functioning as desired for various financial and administrative reasons. Even making adequate budgetary provisions for all these projects continue to pose a great challenge, both for the central and the state Governments.

Overall, NHP 2015 is a well-drafted and comprehensive policy document. It analyses the successes and failures of the past quite well, with a proposal of making health as a fundamental right. However, the status and experience with the other fundamental right-based legislations in India, do not fuel much optimism in this critical area, at least, as of now.

Consequently, the draft NHP 2015 does not appear to be more than a lucid narration of good intents, just what the NHP 1983 and 2002 did. Next month’s Union budget allocation for the financial year 2015-16 for health, calculated as a percentage of India’s GDP, would hopefully bring more clarity in this area.

Additionally, other important areas such as, specific time-bound commitments on public investments for health; extensions of medical insurance cover to even outpatient treatments & care and appropriate regulations for the private sector to contain healthcare expenditure, are worth considering in the NHP 2015.

Shorn of all these, would the National Health Policy 2015 have its wings to fly?

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.

 

Patented Drug Pricing: Relevance To R&D Investments

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The costs of most of the new life saving drugs, used in the treatment of dreaded diseases such as cancer, have now started going north at a brisk pace, more than ever before.

From the global pharma industry perspective, the standard answer to this disturbing phenomenon has remained unchanged over a period of time. It continues to argue; with the same old emphasis and much challenged details that the high drug price is due to rapidly escalating R&D expenses.

However, experts have reasons to believe that irrespective of R&D costs, the companies stretch the new drug prices to the farthest edge to maximize profits. Generation of highest possible revenue for the product is the goal. Passing on the benefits of the new drug to a large number of patients does not matter, at all.

How credible is the industry argument?

In this context, let me take the example of Hepatitis C drug – Sovaldi of Gilead. Many now know that for each patient Sovaldi costs US$ 30,000 a month and US$ 84,000 for a treatment course.

According to an article published in Forbes, one health executive estimated that the annual price tag for Sovaldi could reach US$ 300 Billion because so many people have Hepatitis C infection worldwide.  This mindboggling amount is more than all spending on all drugs in the United States, currently.  A more realistic number might be between US$7 Billion and $12 Billion a year.  Even that amount is roughly five times the amount Gilead spends each year on research.

Like Sovaldi, in many other instances too, industry argument of recovering high R&D investment through product pricing would fall flat on its face.

Need to put all the cards on the table:

The distinguished author underscores in his article the expected responsibilities of the experts in this area to ask the global pharma industry to connect the dots for all us between:

  • The societal goals they aim to achieve
  • The costs they incur on R&D
  • The profits they should reasonably be earning.

Public investments in R&D:

Another article titled, “Putting Price On Life”, argues that R&D projects are mainly initiated in the public sphere through tax-funded research. Unfortunately, patients do not derive any benefit of these public investments in terms of reduction in prices for the related drugs. On the contrary, they effectively pay for these new products twice – once through tax-funded research and then paying full purchase price of the same drug.

Additionally, industry corners the praise for the work done by others in tax-funded research, while at the same time making R&D less risky, as public funded research groups carry out most of the initial risk prone and breakthrough innovation.

The article also highlights that global pharma companies receive other tax credits over billions of dollars for their expenditure on R&D. However, the R&D figures that are produced are not adjusted to take into account the tax credits, thereby inflating costs and the prices of drugs.

All these tax credits significantly lower the private costs of doing the R&D in the United States, increasing the private returns. Interestingly, there does not seem to be any public information regarding who gets the tax credit and what the credit is used for, while the government does not retain any rights in the R&D.

Does pharma R&D always create novel drugs?

According to a report, US-FDA approved 667 new drugs from 2000 to 2007. Out of these only 75 (11 percent) were innovative molecules having much superior therapeutic profile than the available drugs. However, more than 80 percent of 667 approved molecules were not found to be better than those, which are already available in the market.

Thus, the question that very often being raised by many is, why so much money is spent on discovery and development of ‘me-too’ drugs, and thereafter on aggressive marketing for their prescription generation? This is important, as the patients pay for the entire cost of such drugs including the profit, after being prescribed by the doctors?

Should Pharma R&D move away from its traditional models?

The critical point to ponder today, should the pharmaceutical R&D now move from its traditional comfort zone of expensive one company initiative to a much less charted frontier of sharing drug discovery involving many players? If this approach gains acceptance sooner, it could lead to significant increase in R&D productivity at a much lesser cost, benefiting the patients at large.

Finding the right pathway in this direction is more important today than ever before, as the R&D productivity of the global pharmaceutical industry, in general, keeps going south and that too at a faster pace.

Current IPR mechanism failing to deliver:

Current mechanism of Intellectual Property Rights (IPR), especially in the pharmaceutical space, undoubtedly facilitates spiraling high drug prices with no respite to patients and payers, as access to these drugs gets severely restricted to the privileged few, denying ‘right to life’ to many.

Moreover, the current global ‘Pharma Patent System’ does not differentiate between qualities of innovations. The system extends equal incentives for pricing the drugs as high as possible, even if those offer little advantages to patients. Fortunately, this loophole has been plugged in the Indian Patents Act 2005, to a large extent.

That said, there is no well-structured incentive available to develop clinically superior drugs with public funding, even in India, so that prices could be significantly lower with equally lesser risks to the companies too.

Conclusion:

Current pricing system of patented medicines is even more intriguing, as these have no direct or indirect co-relationship with R&D expenditures incurred by the respective players. On the contrary, drug prices allegedly go up due to other avoidable high expenditures, such as, physicians’ gratification oriented marketing, which includes even reported bribing, high profile political lobbying and private jet setting key executives lifestyle with exorbitant compensation packages, besides others.

To effectively address this issue, besides public R&D funding, there has been a number of suggestions for creation of a win-win pathway like, creation of “Health Impact Fund’. There are other inclusive, sustainable and cost effective R&D models too, such as ‘Open Innovation’ and ‘Accelerating Medicines Partnership (AMP)’, to choose from.

A recent HBR Article titled “A Social Brain Is a Smarter Brain” also highlighted, “Open innovation projects (where organizations facing tricky problems invite outsiders to take a crack at solving them) always present cognitive challenges, of course. But they also force new, boundary-spanning human interactions and fresh perspective taking. They require people to reach out to other people, and thus foster social interaction.” This articulation further reinforces the relevance of a new, contemporary and inclusive drug innovation model for greater patient access with reasonable affordability.

Be that as it may, ‘Patented Drug Pricing’ does not seem to have any relevance to a company’s investments towards R&D. On the contrary, the companies charge the maximum price that they could possibly handle to maximize profits on these life saving medicines.

In an environment of indifference like this, it is the responsibility of other stakeholders, especially the government, to ensure, by invoking all available measures, that life saving medications for dreaded diseases such as cancer, can get to those who need them the most, come what may.

Is the ever-alert new Government listening?

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.

Union Budget 2014-15: Ticks The ‘Top Priority’ Boxes on Healthcare

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The Union Budget 2014-15, especially for healthcare, needs to be analyzed against the backdrop of what the common patients have been going through in the healthcare space of India, over a period of time.

In that context, I would quote new sets of data from a consumer expenditure survey carried out reportedly by the National Sample Survey Organization (NSSO) in 2011-12, capturing the following disturbing facts for a period between 2000 and 2012:

  • Total family spend on medical bills increased by 317 percent in urban areas and 363 percent in rural areas for institutional care, while ‘at-home’ medical expenses increased by about 200 percent in both urban and rural areas.
  • For institutional care in hospitals and nursing homes, costs of tests increased by a hopping 541 percent in urban areas. Even for the at-home patient, costs of diagnostic tests increased by over 400 percent in the same period.
  • Increases in doctors’ fees in hospitals were 433 percent in rural areas compared to 362 percent in urban cities,
  • Hospital charges went up by 454 percent in rural areas compared to 378 percent in urban areas.
  • Medicine costs in hospitals went up by 259 percent in rural versus about 200 percent in urban areas.
  • The number of families that reported expenditure on hospitalization dipped from 19 percent to 14 percent in urban areas and from 19 percent to 15 percent in rural areas. Lack of proper facilities at accessible distances was reported to be a key factor in dipping cases of hospitalization in rural areas.
  • Conversely, families that spent on patient care at home increased from 61 percent to 75 percent in urban areas and from 62 percent to 79 percent in rural areas.

Against the above backdrop, within 45 days after coming to power, in his maiden Union Budget Proposal for 2014-15, the Finance Minister of India has ticked most of the right boxes of national health priorities for India. It may not be a dream budget covering everything and all expectations; nonetheless, the budget reflects the intent of the government for the coming years.

Without going into minute details of the Union Budget in general, in this article, I shall dwell on its impact on the healthcare arena of India, in particular.

Key focus areas for healthcare:

Broadly speaking in the healthcare space what impacts the stakeholders most, besides others, are the following and no responsible government can afford to wish these away:

  • Access
  • Affordability
  • Capacity Building
  • Innovation
  • Ease of Doing Business

Within these five key areas, the Finance Minister appears to have focused on the four, namely – ‘Access’, ‘Affordability’, Capacity Building and overall ‘Ease of Doing Business’ in India.

I shall deliberate on each of these points briefly in a short while.

An example of pre-budget expectations of a pharma industry association:

With the current healthcare issues of India in mind and the above priority areas in the backdrop, I read recently in a business magazine, the expectations of one of the pharma industry association’s from the Union Budget 2014-15. Without being judgmental, I am now quoting those points for you to evaluate any way you would like to.

The key expectations of that pharma association were reportedly as follows:

1. Weighted Tax Deduction on Scientific Research:

“Currently there are no specific tax benefits available to units engaged in contract R&D or undertaking R&D for group companies. Benefits should be provided for units engaged in the business of R&D and contract R&D by way of deduction from profits”.

2. Clarity on taxing giveaways to doctors:

“The ambiguity of the CBDT circular in this regard has created widespread concern in the industry. As an interim measure, the CBDT may consider constituting a panel with adequate representation from the industry and Departments of Revenue and Pharmaceuticals to define expenses as ‘ethical’ or ‘unethical’ and lay down guidelines for implementation”.

3. Tax holiday for healthcare infrastructure projects:

“It is necessary to extend the tax holiday benefit to hospitals set up in urban areas to enable companies to commit the substantial investments required in the healthcare sector”.

4. FDI – Ambiguity on coverage (e.g. whether allied activities such as R&D, clinical trials are covered):

“Currently, there are no specific guidelines laid down on whether the FDI provisions are applicable to pharmaceutical companies undertaking allied activities e.g. R&D, clinical trials etc”.

5. Excise Duty on Active Pharma Ingredients (APIs):

“The excise duty rate of APIs be rationalized and brought on par with pharma goods i.e. excise duty on the inputs (API) should be reduced from 12% to 6%. Alternatively, the Government may introduce a refund mechanism to enable Pharma manufacturers to avail refund of excess CenVat Credit”.

Other issues that this particular pharma association had penned in its pre-budget memorandum of 2014-15, were as under:

  • Adoption and implementation of uniform marketing guidelines (e.g. the Uniform Code of Pharmaceutical Marketing Practices circulated by the DoP)
  • Rationalization of clinical trial guidelines
  • Updating of governing laws such as Drugs & Cosmetic Act to reflect the current industry scenario
  • Stakeholder consultation while introducing and implementing drug pricing guidelines

Interesting?

This memorandum is indeed interesting…very interesting, especially when it is taken as comprehensive and well-publicized expectations from the Union Budget of a pharma association in India. This pre-budget memorandum is just an example. Other pharma associations also had put on the table, their respective expectations from the government in the budget.

I gave this example, just to highlight what the new government has actually delivered in the charted priority areas in its warm-up maiden budget proposal, for the benefit of all concerned.

Pragmatic healthcare push in the Union Budget 2014-15:

I felt good to note, within a very short period, the new government could fathom the real healthcare issues of the country, as mentioned above, and proposed to deploy the national exchequers’ fund, probably following the good old saying “put your money where your mouth is”.

Initiates a major step towards ‘Health for All’:

In that direction, the government in its budget proposal has given a new thrust towards ‘Health for All’. For this purpose, two critical initiatives have been proposed:

Free Drug Service:

Free medicines under ‘Health for All’ would also help addressing the issue of poor ‘Access’ to medicines in the country.

Free Diagnosis Service:

Besides ‘Access’, focus on diagnosis and prevention would consequently mean early detection and better management of diseases.

Thus, free medicines and free diagnosis for everyone under ‘Health for All’ would help reducing Out of Pocket (OoP) expenditure on healthcare in India quite significantly. It is worth reiterating that OoP of over 70 percent, which is one of the highest globally, after Pakistan, pushes millions of people into poverty every year in India. This proposal may, therefore, be considered as a precursor to Universal Health Care (UHC).

Increase in FDI cap on insurance sector:

The Finance Minister has proposed an increase in the limit of Foreign Direct Investment (FDI) in the insurance sector from the current level of 26 per cent to 49 per cent. However, the additional investment has to follow the Foreign Investment Promotion Board (FIPB) route. Though this change is not healthcare sector specific, nonetheless, it would ensure deeper penetration of health insurance, improving access to healthcare.

Other key 2014-15 Union Budget proposals:

Other key proposals include:

  • Universal access to early quality diagnosis and treatment to TB patients
  • Two National Institutes of Aging (NIA) at AIIMS, New Delhi, and Madras Medical College, Chennai. NIA aims to cater to the needs of the elderly population which has increased four-fold since 1951. The number of senior citizens is projected to be 173 million by 2026.
  • Four more AIIMS-like institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Purvanchal in UP, for which Rs 500 Crore has been set aside.
  • Additional 58 government medical colleges. The proposal also includes 12 government medical colleges, where dental facilities would also be provided.
  • 15 Model Rural Health Research Centers (MHRCs) in states for better healthcare facilities in rural India.
  • HIV AIDS drugs and diagnostic kits have been made cheaper through duty rationalization.
  • For the first time, the budget proposal included central assistance to strengthen the States’ Drug Regulatory and Food Regulatory Systems by creating new drug testing laboratories and strengthening the 31 existing ones.

Focus on biotechnology:

The Finance Minister proposed a cluster-led biotech development in Faridabad and Bangalore, as well as agro-biotech clusters in Mohali, Pune and Kolkata.  It is a well-established fact that a cluster approach ensures that academia, researchers and the companies engage closely to create strong synergies for innovation and growth.

The announcement of Rs 10,000 Crore funds for ‘startups’ is also expected to help ‘startups’ in the biotech space.

Withdrawal of exemption of a service tax:

As a part to widen the service tax net, the Finance Minister has proposed withdrawal of exemption on service taxes in case of technical testing of newly developed drugs on humans. This has attracted ire of the pharma industry, just as any withdrawal of tax exemption does.

Re-arranging the proposals under high impact areas:

As indicated above, if I now re-arrange the Union budget proposals 2014-15 under each high impact areas, the picture would emerge as follows:

Access improvement:

- “Health for All” – Free drugs and diagnostic services for all would help improving ‘Access’ to healthcare by manifold.

- Universal access to early quality diagnosis and treatment to TB patients would again help millions

- Deeper penetration of health insurance and its innovative usage would also help a significant number of populations of the country having adequate ‘Access’ to healthcare.

Affordability:

- HIV AIDS drugs and diagnostic kits have been made cheaper through duty rationalization.

- “Health for All” – Free drugs and diagnostic services for all would help answering the issue of ‘Affordability’, as well.

Capacity building:

- Two National Institutes of Aging (NIA) at AIIMS, New Delhi, and Madras Medical College, Chennai.

- Four more AIIMS-like institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Purvanchal in UP, for which Rs 500 Crore is being set aside.

- Additional 58 government medical colleges, including 12 colleges where dental facilities would also be provided.

- 15 Model Rural Health Research Centers (MHRCs) in states for better healthcare facilities in rural India.

- Central assistance to strengthen the States’ Drug Regulatory and Food Regulatory Systems by creating new drug testing laboratories and strengthening the 31 existing state laboratories.

Innovation:

- Cluster-led biotech development

Ease of doing business:

- Numbers of common pan-industry initiatives have been enlisted in the general budget proposals, many of which would improve overall ‘Ease of Doing Business’ in the healthcare sector too.

A concern:

Despite all these, there is a concern. In the Union Budget proposals 2014-15, the health sector attracted a total outlay of Rs 35, 163 Crore, which is an increase from the last year’s Rs 33, 278 Crore. I wonder, whether this increase would be sufficient enough to meet all healthcare commitments, as it does not even take inflation into account.

Conclusion:

Taking all these into consideration, the Union Budget proposals for 2014-15, in my view, are progressive and reformists in nature. I am quite in sync with the general belief that the idea behind any financial reform of a nation is not to provide discretionary treatment to any particular industry.

With that in mind, I could well understand why this budget has not pleased all, including the constituents of the healthcare industry and would rather consider it only as a precursor to a roadmap that would follow in the coming years.

However, given the monetary and fiscal constraints of the country, the Union Budget 2014-15, with its key focus on healthcare ‘Access’, ‘Affordability’, ‘Capacity Building’ and overall ‘Ease of Doing Business’ in India, sends right signals of moving towards a new direction, for all. Opportunities for ‘Innovation’ and growth in the biotechnology area have also been initiated, which expectedly would be scaled up in the coming years.

Currently, the general belief both globally and locally is that, this new government has the enthusiasm, will and determination to ‘Walk the Talk’ to make India a global force to reckon with, including its healthcare space.

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. 

Is Drug Innovation As Critical As Access To Medicines For All? [Augmented By A Video]

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To make important medicines available to all in a sustainable way, the renowned philosopher Thomas Pogge in this very interesting video clipping titled “Medicines For The 99 Percent” suggested the following three simple, yet critical, steps to effectively run the healthcare system of any nation with a cost-effective and patient-centric approach:

  • Access to important medicines for all
  • A robust drug innovation model to meet the unmet needs of patients
  • Transparent and efficient systems to make medicines affordable to all, eliminating wastage of all kinds

To translate this process into reality Pogge proposed an out-of-box model, not just to incentivize companies for drug innovation, but also to produce those drugs in a cost-effective way . In his submission, Pogge recommended a US$ 6 billion ‘Health Impact Fund’ to revolutionize the way medicines are developed and sold. He strongly argued that the value of an innovative drug should always be ascertained by its differential “Health Impact” on patients over the equivalent available generics in the respective disease areas.

As you will see in the video, the model is interesting and deserves wholehearted support from all stakeholders, despite possible resistance from some powerful quarters prompted by vested interests.

Drug innovation and access to medicines:

As the good old saying goes, “Health is Wealth”. When a person falls sick, regaining health is all-important. Medicines play a very critical role there, for all. In the ongoing battle against various types of diseases, addressing unmet needs of the patients is also equally important. For this reason, drug innovation plays just as critical a role.

However, it is now a well-known fact that medicines, as such, are not very expensive to manufacture on a relative yardstick. Abundant availability of cheaper generic medicines, post-patent expiry, with as much as  90 percent price erosion over the concerned patented drug price, would vindicate this point.

Current R&D model:

Astronomical mark-ups on the cost of goods for the innovative-patented drugs coming out of the current R&D model, restrict access to these medicines mostly to rich people of both poor and rich countries of the world, depriving majority of the have-nots. Although in an ideal situation, all these medications should be accessible to those who need them the most.

Is the model sustainable?

Innovator companies attribute ‘astronomical’ high prices of patented drugs to hefty R&D expenditure, which probably includes high cost of failures too. Unfortunately, despite ongoing raging debates, R&D expense details are still held very close to the chest by the innovator companies, with almost total lack of transparency. Many experts, therefore, believe that this opaque, skewed and unsustainable drug R&D model of the global pharma majors needs a radical makeover now, as you would yourself see by clicking on the ‘video clipping’, as mentioned above

To ensure full access to important drugs for all, there are other R&D or innovation models too. Unfortunately, none of those appears to be financially as lucrative to the innovator companies as the one that they are currently following, thus creating a challenging logjam in the inclusive process of drug innovation.

Are Pharmaceutical R&D expenses overstated?

Some experts in this area argue that pharmaceutical R&D expenses are overstated, as the real costs are much less.

An article titled “Demythologizing the high costs of pharmaceutical research”, published by the London School of Economics and Political Science in 2011 indicated that the total cost from the discovery and development stages of a new drug to its market launch was around US$ 802 million in the year 2000. This was worked out in 2003 by the ‘Tuft Center for the Study of Drug Development’ in Boston, USA.

However, in 2006 this figure increased by 64 per cent to US$ 1.32 billion, as reported by a large pharmaceutical industry association of the United States, though with dubious credibility as considered by many.

The authors of the above article had also mentioned that the following factors were not considered while working out the 2006 figure of US$ 1.32 billion:

▪   Tax exemptions that the companies avail for investing in R&D

▪   Tax write-offs that amount to taxpayers’ contributing almost 40 percent of the R&D cost

▪   Cost of basic research should not have been included as those are mostly undertaken       by public funded universities or laboratories

The article observed that ‘half the R&D costs are inflated estimates of profits that companies could have made, if they had invested in the stock market instead of R&D and include exaggerated expenses on clinical trials’.

“High R&D costs have been the industry’s excuses for charging high prices”:

In line with this deliberation, in the same article the authors reinforce the above point, as follows:

“Pharmaceutical companies have a strong vested interest in maximizing figures for R&D as high research and development costs have been the industry’s excuse for charging high prices. It has also helped generating political capital worth billions in tax concessions and price protection in the form of increasing patent terms and extending data exclusivity.”

The study concludes by highlighting that “the real R&D cost for a drug borne by a pharmaceutical company is probably about US$ 60 million.”

Should Pharmaceutical R&D move away from the traditional model?

Echoing philosopher Thomas Pogge’s submission, another critical point to ponder today is:

Should the pharmaceutical R&D now move away from its traditional comfort zone of expensive one company initiative to a much less charted frontier of sharing drug discovery involving many players?

If this overall collaborative approach gains broad acceptance and then momentum sooner, with active participation of all concerned, it could lead to substantial increase in R&D productivity at a much lesser expenditure, eliminating wastage by reducing the cost of failures significantly, thus benefiting the patients community at large.

Choosing the right pathway in this direction is more important today than ever before, as the R&D productivity of the global pharmaceutical industry, in general, keeps going south and that too at a faster pace.

Making drug innovation sustainable: 

Besides Thomas Pogge’s model with ‘Health Impact Fund’ as stated above, there are other interesting drug R&D models too. In this article, I shall focus on two examples:

Example I:

A July 2010 study of Frost & Sullivan reports: “Open source innovation increasingly being used to promote innovation in the drug discovery process and boost bottom-line”.

The concept underscores the urgent need for the global pharmaceutical companies to respond to the challenges of high cost and low productivity in their respective R&D initiatives, in general.

The ‘Open Innovation’ model assumes even greater importance today, as we have noted above, to avoid huge costs of R&D failures, which are eventually passed on to the patients again through the drug pricing mechanism.

‘Open Innovation’ model, as they proposed, will be most appropriate to even promote highly innovative approaches in the drug discovery process bringing many brilliant scientific minds together from across the world.

The key objective of ‘Open Innovation’ in pharmaceuticals is, therefore, to encourage drug discovery initiatives at a much lesser cost, especially for non-infectious chronic diseases or the dreaded ailments like Cancer, Parkinson’s, Alzheimer, Multiple Sclerosis, including many neglected diseases of the developing countries, making innovative drugs affordable even to the marginalized section of the society.

Android smart phones with huge commercial success are excellent examples of ‘Open Source Innovation’. So, why not replicate the same successful model of inclusive innovation in the pharmaceutical industry too?

Example II - “Accelerating Medicines Partnership (AMP)” initiative:

This laudable initiative has come to the fore recently in he arena of collaborative R&D, where 10 big global pharma majors reportedly decided in February 2014 to team up with the National Institutes of Health (NIH) of the United States in a ‘game changing’ initiative to identify disease-related molecules and biological processes that could lead to future medicines.

This Public Private Partnership (PPP) for a five-year period has been named as “Accelerating Medicines Partnership (AMP)”. According to the report, this US federal government-backed initiative would hasten the discovery of new drugs in cost effective manner focusing first on Alzheimer’s disease, Type 2 diabetes, and two autoimmune disorders: rheumatoid arthritis and lupus. The group considered these four disease areas among the largest public-health threats, although the span of the project would gradually expand to other diseases depending on the initial outcome of this project.

“A Social Brain Is a Smarter Brain”: 

As if to reinforce the concept, a recent HBR Article titled “A Social Brain Is a Smarter Brain” also highlighted, “Open innovation projects (where organizations facing tricky problems invite outsiders to take a crack at solving them) always present cognitive challenges, of course. But they also force new, boundary-spanning human interactions and fresh perspective taking. They require people to reach out to other people, and thus foster social interaction.” This articulation further reinforces the relevance of a new, contemporary and inclusive drug innovation model for greater patient access.

Conclusion:

Taking these points into perspective, I reckon, there is a dire need to make the process of offering innovative drugs at affordable prices to all patients absolutely robust and sustainable as we move on.

Philosopher Thomas Pogge, in his above video clipping, has also enunciated very clearly that all concerned must ensure that medications get to those who need them the most. He has also shown a win-win pathway in form of creation of a “Health Impact Fund’ to effectively address this issue. There are other inclusive, sustainable and cost effective R&D models too, such as Open Innovation and Accelerating Medicines Partnership (AMP), to choose from.

That said, a paradigm shift in the drug innovation model can materialize only when there will be a desire to step into the uncharted frontier, coming out of the comfort zone of much familiar independent money spinning silos of drug innovation. Dove tailing business excellence with the health interest of all patients, dispassionately, would then be the name of the game.

Bringing this transformation sooner is extremely important, as drug innovation would continue to remain as critical as access to important medicines for all, in perpetuity.

However, to maintain proper checks and balances between drug innovation and access to medicines for all, the value of an innovative drug should always be ascertained by its differential ‘Health Impact’ on patients over equivalent available generics in that disease area and NOT by how much money, including the cost of R&D failures, goes behind bringing such drugs to the market, solely driven by commercial considerations.

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.

 

 

RHDS: A Simmering Promise in Despondency

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Eric Topol, a leading cardiologist who has embraced the study of genomics and the latest advances in technology to treat chronic disease says, “We’ll soon use our smartphones to monitor our vital signs and chronic conditions in future.”

By clicking on this video clipping, you can watch how Dr. Topol in his talk titled “The Wireless Future of Medicine”, highlights several of the most important wireless devices in medicine’s future – all helping to keep more patients out of hospital beds.

In achieving similar objectives, India’s potential is indeed immense. The good news is, though in India Internet penetration has just crossed 16 percent of its total population, in absolute numbers this percentage reportedly works out to nearly 10 times the population of Australia. According to a report released by the Internet and Mobile Association of India (IMAI) and IMRB, there will be around 243 million internet users in India by June 2014, overtaking the US as the world’s second largest internet base after China. This situation must be leveraged to improve access to healthcare in the country significantly.

‘Remote Healthcare Delivery Solutions (RHDS)’

However, for several other reasons the situation is quite challenging in India. Out of its total population of over 1.2 billion, nearly 72.2 percent live in the hinterland and remote rural areas spreading across over 700,000 villages. In all these places, despite huge prevalence of diseases, inadequate healthcare infrastructure and delivery mechanisms offer an ideal backdrop to explore innovative healthcare solutions such as, ‘Remote Healthcare Delivery Solutions (RHDS)’ or ‘Telemedicine’. In that endeavor, smartphones could play a key role in improving access to healthcare for a very large number of population.

The World Health Organization (WHO) has defined ‘Telemedicine’ as:

“The use of information and communications technology (ICT) to deliver healthcare, particularly in settings where access to medical services is insufficient.”

Thus, to effectively improve access to healthcare, especially in rural India, RHDS holds a great promise.

A complex mix:

Healthcare space in India is generally a complex mix of issues related to access, availability, affordability and quality of healthcare, compounded by inadequate public healthcare infrastructure and delivery system on the one hand and expensive private healthcare facilities on the other. The degree of this complexity is rather stark in rural areas.

In a situation like this, RHDS holds a great promise to satisfy healthcare needs of the hinterland and rural India, as this would entail effective medical care, despite understaffed Primary Healthcare Centers (PHCs) and undertrained healthcare staff, with low start-up costs.

Equipped with modern Internet enabled technologies, RHDS would facilitate transmission of patient related information through SMS, email, audio, video, or other image transmissions, like MRI and CT Scans to relevant specialists of different disciplines of medical sciences located in other places. With RHDS, these specialists can monitor even blood pressure or blood glucose levels of patients on computer screens without examining them in person.

Key advantages:

The key advantages of a structured and well committed implementation of RHDS or ‘Telemedicine’ in india are as follows:

  • Elimination of many costs, including travel expenses for specialists and patient transfers – especially in a critical health situation, improving access to quality healthcare.
  • Reduction of feeling of isolation of the rural medical practitioners by upgrading their knowledge through Tele-education or Tele-Continuing Medical Education (CME) programs.

RHDS in India:

In India, RHDS initiative in form of telemedicine commenced more than a decade ago in 1999, when the Indian Space Research Organization (ISRO) deployed a SATCOM-based telemedicine network across the country. ISRO’s telemedicine program has now been reportedly enhanced to multi-point systems with a network of 400 centers across India.

The good news is, besides Department of Information Technology, the Ministry of Health & Family Welfare and many state governments, some well-reputed medical and technical institutes, corporates and academia have also started taking active interest in this area, especially oriented for the rural population of India.

In this context it is worth mentioning that in March 2014, Biocon Foundation reportedly partnered with Canara Bank and the Odisha Government for an e-healthcare program that aims at setting up of diagnostic facilities in PHCs to improve healthcare access to  51,000 villages.

Simultaneously, the Department of Information Technology has put in place the ‘Standards for Telemedicine Systems’ and the Ministry of Health & Family Welfare has constituted the National Telemedicine Task Force to provide further thrust to RHDS in India,.

To cite an example, US based World Health Partners (WHP) have reportedly set up an extensive Tele-Medicine network in the state of Uttar Pradesh (UP), which has received almost 35,000 calls in two years requesting for services. After receiving the calls, the patients requiring intervention were directed to WHP’s franchisee clinics in the respective areas. This model included three areas namely, Meerut, Bijnor and Muzzafarnagar.

Apollo group, Narayana Hruduyalaya, Aravind Eye Hospital and Asia Heart Foundation are also running similar system in India. Unfortunately, none of these or even all put together can extend such facilities to patients across the whole of India, just yet.

The Market:

According to a report of Infinity research the global market for telemedicine is around US$ 9 billion with a CAGR of 20 percent. However, another report quoting KSA Technopak indicates that the Indian market is currently relatively very small with a market size of around US$ 7.5 Million. Considering future growth opportunities, as deliberated here, RHDS market holds a great promise.

Telemedicine or RHDS market is classified based on the type of technology and services used and usually analyzed on the basis of telemedicine applications, such as Tele-consultation, Tele-cardiology or Tele-dermatology etc. However, Tele-consultation reportedly dominates the telemedicine services market.

To give an idea of its market potential, the BRIC (Brazil, Russia, India and China) telemedicine market was reportedly at US$ 200.5 million in 2009 and was expected to expand at a CAGR of 15.8 percent from 2009 to 2014.

The telemedicine technology market segment forms the largest segment of the overall BRIC telemedicine market and is expected to be US$ 307.4 million by end 2014 with a CAGR of 16.6 percent from 2009 to 2014. The services segment in the overall BRIC telemedicine market is expected to reach US$ 111 million in 2014 with a CAGR of 13.8 percent.

The Challenges in India:

Again there are following two critical challenges in this areas:

  • The biggest challenge is undoubtedly the broadband Internet connectivity.
  • Transmitting patients’ medical records through Internet could infringe upon patient privacy giving rise to ethics related issues, besides avoidable litigations.

I reckon, these concerns can be well addressed, if both the private healthcare providers and the Government together resolve and chart a time-bound pathway to improve access to quality healthcare in a cost effective manner to a large majority of Indian population.

Conclusion:

Various public and private RHDS solution providers are gradually getting actively engaged, though incoherent way, to create awareness about telemedicine in the country. This  brings with it a never before hope of ensuring access to quality healthcare to almost the entire population of the country.

A survey conducted in the United States highlighted that 85 percent of patients expressed satisfaction with their telemedicine consultation. Back home in India, a similar study in Odisha reported a satisfaction rate as high as 99 percent post telemedicine consultation.

Having a large base of medical and IT manpower with requisite expertise in RHDS, India holds a great promise to become a major telemedicine hub even for its neighboring countries, transforming the healthcare delivery scenario in all those places significantly.

Bundling all these, together with the increasing use of Internet enabled smartphones as explained by Dr. Eric Topol in his video clipping above, RHDS does offer a simmering promise in an otherwise despondent healthcare scenario of India.

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.

Why Try To Reinvent The Wheel With So Much Of Hullabaloo?

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A recent IMS study, apparently ‘authorized’ (whatever it means) by the Planning Commission of India has reportedly suggested various ‘ways to make drugs affordable in India’.

Though there does not appear to be anything new in the reported suggestions, the well publicized report could manage to snatch an eye-catching media headline: “Patented Drugs Cheaper, but Less Affordable Here”, for whatever may be the reason.

I wish I had an access to the full report for further enlightenment in this area.

Was this ‘authorized’ study necessary at all in the first place?

If the study were related to improving access to medicines in India, several questions would naturally come up, as follows:

  • What does “The study authorized by the Planning Commission” mean? Has the Planning Commission paid from the taxpayers’ money to get this avoidable study done? Or, has the study been done free of cost, as a favor extended to the Planning Commission of India on the issue, in lieu of authorization of the commission for quoting its name in the report?

Following the due process, it would not difficult to unravel whether the Government has made any payment for the study or not.

  • However, assuming that this study was done free of cost, it will be interesting to know what prompted the Planning Commission to even consider to reinvent the wheel with this new IMS study.
  • The reason being, the comprehensive report on the ‘Universal Health Care (UHC)’ dated November 2011 prepared by the ‘High Level Expert Group (HLEG), chaired by the Chief of the ‘Public Health Foundation of India (PHFI), Dr. Professor K. Srinath Reddy, is already pending before the Commission for giving shape to it working with all the concerned ministries. It is worth mentioning that the Planning Commission of India also had commissioned the HLEG study.
  • Instead of taking the UHC initiative forward, along with, hopefully, an expedited action of the Department of Pharmaceuticals to put in place a robust mechanism for patented drugs pricing, wasting time by moving in circles on the part of the Planning Commission in search of probably yet another ‘Eureka’ type report, would cost a great deal to the healthcare system of India. On the contrary, from the news report it appears that the findings or suggestions made in the IMS report are rather mundane, far from being anywhere near ‘Eureka’ type by any imaginable yardstick.

HLEG already charted the pathway for UHC in India:

The HLEG report has defined the UHC as follows:

“Ensuring equitable access for all Indian citizens, resident in any part of the country, regardless of income level, social status, gender, caste or religion, to affordable, accountable, appropriate health services of assured quality (promotive, preventive, curative and rehabilitative) as well as public health services addressing the wider determinants of health delivered to individuals and populations, with the government being the guarantor and enabler, although not necessarily the only provider, of health and related services”.

Ten principles for UHC in India:

Following are the ‘Ten Principles’, which guided the HLEG to formulate its recommendations for the UHC in India:

  • Universality
  • Equity
  • Non-exclusion and non-discrimination
  • Comprehensive care that is rational and of good quality
  • Financial protection
  • Protection of patients’ rights that guarantee appropriateness of care, patient choice, portability and continuity of care
  • Consolidated and strengthened public health provisioning
  • Accountability and transparency
  • Community participation
  • Putting health in people’s hands

HLEG study guarantees access to essential free health services for all:

Because of the uniqueness of India, HLEG proposed a hybrid system that draws on the lessons learned from within India as well as other developed and developing countries of the world.

UHC will ensure guaranteed access to essential health services for every citizen of India, including cashless in-patient and out-patient treatment for primary, secondary and tertiary care. All these services will be available to the patients absolutely free of any cost.

Under UHC all citizens of India will be free to choose between Public sector facilities and ‘contracted-in’ private providers for healthcare services.

It is envisaged that people would be free to supplement the free of cost healthcare services offered under UHC by opting to pay ‘out of pocket’ or going for private health insurance schemes 

Another Planning Commission commissioned report on procurement and distribution of medicines:

Another working group of the Planning Commission on health, constituted for the 12th Five Year Plan (2012-2017) headed by the then Secretary of Health and Family Welfare Mr. K. Chandramouli, had also submitted its report to the Commission.

The Part II of the report titled, “Provisions of ’free medicines for all in public health facilities …” recommends that health being a state subject, all the state governments of the country should adopt the successful and well proven Tamil Nadu model of healthcare procurement.

Tamil Nadu government through Tamil Nadu Medical Supplies Corporation (TNMSC) reportedly makes bulk purchases of drugs and pharmaceuticals directly from the manufacturers through a transparent bidding process, which reduces the cost of medicines to 1/10th and even to 1/15th of the Maximum Retail Price (MRP) of the respective product packs.

As per this report, the total running cost of procurement and distribution for the ‘Free Medicines for All’ project during the 12th plan period would be Rs. 28,675 Crore and an additional allocation of Rs. 1,293 Crore will be required as one time capital costs. The contribution of the Central Government at 85 percent of the total cost would be around Rs 25,667 Crore for the entire Plan period.

Conclusion:

In July 2012, while talking on the above K Srinath Reddy Committee report on UHC, which suggests universal health insurance coverage, the Deputy Chairman of the Planning Commission, Mr. Montek Singh Ahluwalia had reportedly said that the health sector of India would anyway receive a major shot in the arm in the 12th five-year plan with a budgetary allocation of 2 percent of GDP during the plan period. He also articulated that the country’s focus would be on cost-effective treatment and healthcare. For this, there would be a huge demand for human resources in the medical sector.

In the above backdrop, when two such excellent recent reports, commissioned earlier by the Planning Commission itself on improving access to affordable healthcare in India, are still pending before it for initiation of meaningful action with public knowledge, it is difficult to fathom what prompted the necessity for yet another Planning Commission ‘authorized’ study on similar area, with no seemingly earthshaking findings, as detailed in the media report.

This brings me back to where I started from, why is this particular attempt by the Planning commission to ‘Reinvent The Wheel’, yet again, and that too with so much of a hullabaloo, instead of diligently acting on the well crafted pending ones?

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.

Herceptin Biosimilar Expands Drug Access to Breast Cancer Patients in India

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Come February 2014, much to the relief of more than 145,000 patients diagnosed with breast cancer in India, Herceptin of Roche, a critical drug for the treatment of the dreaded disease, will face competition, for the first time, from a less expensive biosimilar equivalent. The product named Canmab developed together with Mylan by Biocon has been priced 25 percent less than Herceptin.

Patient access issue for newer cancer therapy:

Herceptin has been a very critical drug, though equally expensive, for breast cancer patients globally.

Mainly because of its unusual high price, the product created an access barrier to majority of patients in India. Arising out of complexity of the problem faced by the cancer patients, hugely compounded by the affordability issue, on January 12, 2013, it was first reported that in a move that is intended to benefit thousands of cancer patients, Indian Government has started the process of issuing Compulsory Licenses (CL) for three commonly used anti-cancer drugs: 

-       Trastuzumab (or Herceptin, used for breast cancer),

-       Ixabepilone (used for chemotherapy)

-       Dasatinib (used to treat leukemia).

For a month’s treatment drugs like, Trastuzumab, Ixabepilone and Dasatinib reportedly cost on an average of US$ 3,000 – 4,500 or Rs 1.64 – 2.45 lakh for each patient in India.

Pricing issue needs a systemic resolution: 

While there is no single or only right way to arrive at the price of a patent protected medicine, how much the pharmaceutical manufacturers will charge for such drugs still remains an important, yet complex and difficult issue to resolve, both locally and globally. Even in the developed nations, where an appropriate healthcare infrastructure is already in place, this issue comes up too often mainly during price negotiation for reimbursed drugs. 

A paper titled, “Pharmaceutical Price Controls in OECD Countries”, published by the U.S. Department of Commerce, after examining the drug price regulatory systems of 11 OECD countries, concluded that all of them enforce some form of price control to limit spending on pharmaceuticals. The report also indicated that the reimbursement prices in these countries are often treated as de facto market price.

Though there is no such system currently prevailing in India, the Government is mulling to put in place a similar mechanism for patented medicines, as captured in the National Pharmaceutical Pricing Policy (NPPP) 2012.

Further, some OECD governments regularly cut prices of even those drugs, which are already in the market. The value of health outcomes and pharmacoeconomics analysis is gaining increasing importance for drug price negotiations/control by the healthcare regulators even in various developed markets of the world to ensure responsible pricing of IPR protected medicines. For various reasons, no such process is followed either for such product pricing in India, as on date.

Roche changed Herceptin strategy for India:

To effectively address the challenge of pricing of patented medicines in India, Roche reportedly entered into a ‘never-before’ technology transfer and manufacturing contract for biologics with a local Indian company – Emcure Pharma for its two widely acclaimed ‘Monoclonal Antibodies’ anti-cancer drugs – Herceptin and MabThera.

Consequently, Roche introduced its ‘made in India’ brand Herclon (Herceptin) with a much-reduced maximum retail price of about Rs. 75,000 for a 440 mg vial and started co-marketing the product with Emcure Pharma in India.

Although Herceptin patent remains valid in the United States (US) until 2018, Roche decided to discontinue its patent rights for Herceptin in India in 2013.

The pharma major reportedly lost this patent earlier in Europe. This vindicates the views of many experts that Herceptin patent was weak, as it would probably not be able to clear the litmus test of a stringent scrutiny under the Patent Acts of India. The report, therefore, argues that core reason for withdrawal of Herceptin patent in India by Roche cannot be attributed, even remotely, to the ‘weak IP ecosystem’ in India.

Biocon Pricing:

According to reports Biocon’s Canmab, the biosimilar version of Herceptin, will be available in 440 mg vial with a maximum retail price of Rs. 57,500 and also in 150 mg vial at Rs. 19,500.

Lower price would lead to greater patient access – Roche argued earlier:

It was reported, when Roche switched over to Herclon with around 30 percent discounted price from very high price Herceptin, access to the drug improved. In fact, that was the logic cited by Roche for the launch of Herclon in India at that time. 

Just to recapitulate, media reports indicated at that time that Roche intends to offer to Indian patients significantly cheaper, local branded version of Herceptin sooner. The same news item also quoted Roche spokesperson from Basel, Switzerland commenting as follows:

“The scope is to enable access for a large majority of patients who currently pay out of pocket as well as to partner with the government to enable increased access to our products for people in need”.

Conclusion:

It is beyond doubt that even with significantly lower price, Canmab would not be able to guarantee 100 percent access to the drug for all breast cancer patients in the country.

However, applying the same logic of Roche, as mentioned above, with further 25 percent price discount for Canmab by Biocon, the access to this drug should expand significantly for over 145,000 diagnosed breast cancer patients in India even, for an argument’s sake, all other factors, including inadequate number diagnostic facilities etc. remain the same. Isn’t that better?

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

 

Access to Medicine: Losing Track in Cacophony

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Indian Healthcare space is by and large an arena, where perceptions prevail over the changing reality in many important areas. Consequently, fierce discourse in those areas mostly gives rise to a cacophony of ‘Your Perceptions Against Mine’.

It is intriguing, why even in some well-hyped research studies of recent times, multiple interpretations are made not based on specific analytics-based numbers, but around critical data gaps and then the vital ‘conclusion’ is craftily packaged in a particular way to reinforce a set of perceptions and view points.

Serious discourse on ‘Access to Medicine’ in India often falls in these data crevasses, resulting nothing more than abject cynicism and expert sermons sans accountability from all quarters. Suggestions for precise quantification of magnitude of the problem, so far as ‘Access to Medicine’ is concerned, and then measuring the same periodically for sustainable corrective measures, obviously fade away in the din of multiple shrill voices, heavily loaded with self-perceptions attempting to score favorable brownie points.

A quantifiable number on overall ‘access to medicines’ remains illusive:

A quantifiable recent number on overall ‘Access to Modern Medicines’ in India, which could well form the base to measure progress of the country in this critical area subsequently, still remains illusive.

It is an irony, no one seems to know today what is the current ‘Access to Modern Medicines’ in India, in real term.

A recent study too goes around it, but NOT into it:

A 2012 industry sponsored study carried out by IMS Consulting, instead of giving just one number for overall ‘Access to Modern Medicines’ in India, went around it by reiterating the obvious that ‘access’ has 4 dimensions such as, Physical Reach, Availability/Capacity, Quality/Functionality and Affordability.

That is fine. No issue. However, the much sought after number of overall ‘Access to Modern Medicines’ still remained illusory in this study too. Interestingly, there are no numbers available to public for each of the above 4 important dimensions either. Thus the cacophony got shriller.

Clutching on to ‘Dinosaurian data’ in modern times:

Against the above backdrop, like many others, both local and global, even the honorable President of India on January 16, 2013, while addressing the ASSOCHAM 10th Knowledge Millennium Summit, quoted the ‘World Medicines Situation of 2004 report’, the base year of which is reportedly 1999. This study indicated, ‘only 35% of the population of India, against 53% in Africa and 85% in China has access to modern medicines’.

Thus in the absence of any recently updated number, the ‘Dinosaurian data’ of 1999 (published in 2004) is being considered relevant by many even in 2013, including the esteemed industry body that probably provided those irrelevant data to the president of India’s office for his speech, at the beginning of this year.

Importance of capturing today’s ‘Access’ data to provide ‘Healthcare to all’:

There should not be even an iota of doubt that the above reported scenario has changed quite significantly, at least, during the last decade in India, making the 1999 (published in 2004) ‘Access to Medicines’ numbers irrelevant, having no sense whatsoever in 2013.

To drive home this point, I shall now focus on just three sets of parameters, besides many others, to vindicate my comment on ‘dinosaurian data’. These parameters are as follows:

  1. Compounded Annual Growth Rate (CAGR) in per-capita expenditure on healthcare from 2006-11
  2. Compounded Annual Growth Rate (CAGR) of the domestic pharmaceutical industry in this period
  3. Quantum of increase in use of public healthcare facilities

1. Per capita Healthcare expenditure from 2006-11:

Year US $
1999 18.2
2004 28.7
2006 33.0
2007 39.9
2008 42.7
2009 43.6
2010 51.4
2011 59.1

(Source WHO Data)

The above table vey clearly highlights that in 1999, the base year of the above study, per capita healthcare expenditure in India was just US$ 18.2. The figure rose to US$ 28.7 in year 2004, when that study was published. The number reached to US $ 59.1 in 2011. This reflects a double digit Compounded Annual Growth Rate (CAGR) in per capita healthcare expenditure of the country from the 2004 study to 2011.

No doubt, this number is still much less than many other countries. Nevertheless, in 2013, per capita healthcare expenditure in India will be even more, indicating significant increase in ‘Access’ as compared to 2004.

2. Growth of domestic pharmaceutical market: 

According to the PwC – CII report titled “India Pharma Inc.: Gearing up for the next level of growth”, the domestic drug market has been clocking a CAGR of more than 15 percent over the last five years. Thus, high growth of the Indian Pharmaceutical Market (IPM) since the last decade, both from the urban and the rural areas, would certainly signal towards significant increase in the domestic consumption of medicines. Moreover, fast growing rural and semi-urban markets would also clearly support the argument in favor of increasing ‘Access to Modern Medicines’ in India.

A back of the envelope calculation:

Improvement in access as compared to what ‘World Medicines Situation of 2004 report’ had highlighted, may not have a linear relationship to the volume growth of the industry during this period. However, a large part of this growth could indeed be attributed to increase in overall consumption of drugs, leading to improvement in access to medicines in India.

For example, out of the reported 15 percent CAGR of the IPM, if one attributes just 8 percent volume growth/year to increased access to drugs, a back of the envelope calculation would indicate that during last nine years over the base year of 2004, the access to medicines has improved at least to 70 percent of the population, if not more, and has NOT remained just at 35 percent, as many tend to establish a point or two by quoting the above dated report.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend, as evidenced in the honorable President of India’s speech in 2013, as quoted above. Official communications of the government also keep quoting the outdated statistics stating that 65 percent of the population of India does not have ‘Access to Modern Medicines’ even today.

Be that as it may, around 30 percent of Indian population would still perhaps not have ‘Access to Medicines’ in India. This issue needs immediate attention of the policy makers and can possibly be achieved through effective implementation of a holistic public health policy model like, ‘Universal Health Care (UHC)’.

3. Increase in use of public healthcare facilities:

According to a study done by the IMS Consulting Group in 2012, in rural India, which constitutes around 70 percent of the total 1.2 billion populations of India, usage of Government facilities for Out Patient (OP) care has increased from 22 percent in 2004 to 29 percent in 2012, mainly due to the impact of National Rural Health Mission (NRHM). This increase will have significant impact in reducing ‘Out of pocket (OoP)’ healthcare expenses of the rural poor.

Overall impact on some key health indicators: 

The same 2012 study of IMS Consulting highlights that an objective and comprehensive assessment of healthcare access in India was last undertaken in 2004, through a survey performed by the National Survey Sample Organization (NSSO). 
The survey reported on multiple parameters related to healthcare, including morbidity in broad age groups, immunization status, episodes of outpatient/ inpatient treatment across geography/ income segments together with expenditure on treatment. These measures, the study indicates, were taken collectively to indicate the status of healthcare access.

According to this report, the Government of India had undertaken multiple programs to improve healthcare access. These programs have addressed numerous issues, in varying proportion, that are linked to healthcare access, including lack of infrastructure, high cost of treatment, and the quality and availability of treatment. Some of these programs have been enormously successful: for example, India is a polio-free country today, the study reinforces.

The study also highlights significant progress in some basic healthcare indicators. The examples cited are as follows:

  • Maternal mortality rate has decreased by ~50 percent, and was reported at 200 deaths per 100,000 live births in the year 2010 as compared to 390 a decade ago. A few states such as Tamil Nadu, Maharashtra, and Kerala have already achieved the Millennium Development Goal (MDG) of a maternal mortality ratio less than 109 maternal death per 100,000 live births, with multiple other states close to achieving this target.
  • Infant mortality rate has decreased by greater than 25 percent over the period 2000–2009, and was reported at 50 deaths per 1,000 live births. Correspondingly, the under-5 child mortality rate (U5MR) has decreased by similar percentage levels, and was reported at 64 deaths per 1,000 live births. While U5MR for urban India has achieved the MDG target of 42 the same for rural of 71 is significantly lagging the target level.
  • Immunization coverage has increased significantly, for example diphtheria-tetanus-pertussis immunization among 1 year olds has increased from 60% to 70%, and the Hepatitis B coverage has increased from 68% in 2005 to 91% in 2010.
  • National programs have successfully improved detection and cure rates for tuberculosis and leprosy.

No direct relationship established between healthcare spend and outcomes:

Though India’s per-capita healthcare spend has been lowest among the usually compared BRIC countries, the following quick example would clearly establish that the healthcare outcomes do not have a linear relationship with the per-capita healthcare spend either:

Per capita Healthcare expenditure in 2011: Country Comparison

Country US $ World Rank Physician/1000 people Hospital/1000 people Life expectancy at birth (years)
Brazil 1120.56   41 1.76 2.3 73.4
Russia 806.7   55 4.31 9.6 69.0
India 59.1 152 0.65 0.9 67.08
China 278.02   99 1.82 3.8 73.5 

(Source: WHO data)

Thus, taking a cue from these numbers, India should decide at what percapita spend the country would possibly be able to ensure quality ‘access’ to healthcare for 100 percent of its population. Mere, comparison of percapita spend of each country, I reckon, may thus not mean much.

Conclusion:

The moot point, I reckon, is that, to measure progress in any sphere of activity, one will need to have a robust well-derived base point. Thereafter, progress needs to be monitored and quantified periodically from one point to the next.

So far as the access to healthcare in general and medicines in particular are concerned, it becomes difficult to fathom why is this basic approach still not being considered to measure progress in ‘Access’ and its rate in India.

As a result, discussions among the stakeholders do not take place around those updated numbers, either. Instead, what we hear is a high decibel cacophony of perceptions, at times groping around various dimensions of ‘Access’ and that too without quantification of each, as stated above.  This makes the task all the more complicated in pursuit of providing ‘Healthcare to All’ in India.

That said, the question to ponder now:

Does any one know what is the current ‘Access to Modern Medicines’ number in India and at what rate the progress is being made in that direction to achieve ‘Health for All’ objective of the country?

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.