Does Healthcare Feature In Raisina Hill’s To-Do List?

At the Capitol Hill, while addressing the joint session of the United States Congress, on June 08, 2016, our Prime Minister Mr. Narendra Modi well articulated the following, in his inimitable style:

“My to-do list is long and ambitious. It includes a vibrant rural economy with robust farm sector; a roof over each head and electricity to all households; to skill millions of our youth; build 100 smart cities; have a broadband for a billion, and connect our villages to the digital world; and create a 21st century rail, road and port infrastructure.”

This ambitious list is indeed praiseworthy. However, as the Prime Minister did not mention anything about health care infrastructure, while referring to rapid infrastructure development in India, it is not abundantly clear, just yet, whether this critical area finds a place in his ‘to-do’ list, as well, for ‘We The People of India’.

This apprehension is primarily because, no large scale, visible and concrete reform measures are taking place in this area, even during the last two years. It of course includes, any significant escalation in the public expenditure for health.

Ongoing economic cost of significant loss in productive years:

“The disease burden of non-communicable diseases has increased to 60 per cent. India is estimated to lose US$ 4.8 Trillion between 2012 and 2030 due to non-communicable disorders. It is therefore critical for India to transform its healthcare sector,” – says a 2015 KPMG report titled, ‘Healthcare: The neglected GDP driver.’ 

This significant and ongoing loss in productive years continues even today in India, handicapped by suboptimal health care infrastructure, and its delivery mechanisms. Such a situation can’t possibly be taken for granted for too long. Today’s aspiring general public wants the new political leadership at the helm of affairs in the country to address it, sooner. A larger dosage of hope, and assurances may not cut much ice, any longer.

Transparent, comprehensive, and game changing health reforms, supported by the requisite financial and other resources, should now be translated into reality. A sharp increase in public investments, in the budgetary provision, for healthy lives of a vast majority of Indian population, would send an appropriate signal to all.

As the above KPMG report also suggests: “It is high time that we realize the significance of healthcare as an economic development opportunity for national as well as state level.”

Pump-priming public health investments:

With a meager public expenditure of just around 1.2 percent of the GDP on health even during the last two years, instead of rubbing shoulders with the global big brothers in the health care area too, India would continue to rank at the very bottom.

Consequently, the gaping hole within the healthcare space of the country would stand out, even more visibly, as a sore thumb, escaping the notice, and the agony of possibly none.

With around 68 percent of the country’s population living in the rural areas, having frugal or even no immediate emergency healthcare facilities, India seems to be heading towards a major socioeconomic imbalance, with its possible consequences, despite the country’s natural demographic dividend.

According to published reports, there is still a shortage of 32 and 23 percent of the Community Health Centers (CHC) and the Primary Health Centers (PHC), respectively, in India. To meet the standard of the World Health Organization (WHO), India would need minimum another 500,000 hospital beds, requiring an investment of US$ 50 Billion.

Moreover, to date, mostly the private healthcare institutions, and medical professionals are engaged in the delivery of the secondary and tertiary care, concentrated mostly in metro cities and larger towns. This makes rural healthcare further challenging. Pump-priming public investments, together with transparent incentive provisions for both global and local healthcare investors, would help augmenting the process.

Help propel GDP growth:

As the above KPMG report says, the healthcare sector has the ability to propel GDP growth via multiple spokes, directly and indirectly. It offers a chance to create millions of job opportunities that can not only support the Indian GDP growth, but also support other sectors of the economy by improving both demand and supply of a productive healthy workforce.

Three key areas of healthcare:

Healthcare, irrespective of whether it is primary, secondary or tertiary, has three major components, as follows: 

  • Prevention
  • Diagnosis
  • Treatment 

Leveraging digital technology:

As it appears, leveraging digital technology effectively, would help to bridge the health care gap and inequality considerably, especially in the first two of the above three areas.

A June 06, 2016 paper titled, ‘Promoting Rural Health Care: Role of telemedicine,’ published by the multi-industry trade organization -The Associated Chambers of Commerce and Industry of India (ASSOCHAM) said: “With limited resources and a large rural population telemedicine has the potential to revolutionize the delivery of healthcare in India.”

As the report highlighted, it would help faster diagnosis of ailments, partly address the issues of inadequacy of health care providers in rural areas, and also the huge amount of time that is now being spent in physically reaching the urban health facilities. Maintenance of the status quo, would continue making the rural populace more vulnerable in the health care space, than their urban counterparts.

The study forecasted that India’s telemedicine market, which has been growing at a compounded annual growth rate (CAGR) of over 20 per cent, holds the potential to cross US$32 million mark in turnover by 2020, from the current level of over US$15 million.

According to another report, currently, with around 70 percent overall use of smartphones, it is quite possible to give a major technology enabled thrust for disease prevention, together with emergency care, to a large section of the society.  

However, to demonstrate the real technology leveraged progress in this area, the Government would require to actively help fixing the requisite hardware, software, bandwidth and connectivity related critical issues, effectively. These will also facilitate keeping mobile, and other electronic health records.

Disease treatment with medicines:

To make quality drugs available at affordable prices, the Indian Government announced a new scheme (Yojana) named as ‘Pradhan Mantri Jan Aushadhi Yojana’, effective July 2015, with private participation. This is a renamed scheme of the earlier version, which was launched in 2008. Under the new ‘Pradhan Mantri Jan Aushadhi Yojana’, about 500 generic medicines will be made available at affordable prices. For that purpose, the government is expected to open 3000 ‘Jan Aushadhi’ stores across the country in the next one year i.e. 2016-17.

The question now is what purpose would this much hyped scheme serve?

What purpose would ‘Pradhan Mantri Jan Aushadhi Yojanaserve?

Since the generic drugs available from ‘Jan Aushadhi’ retail outlets are predominantly prescription medicines, patients would necessarily require a doctor’s physical prescription to buy those products.

In India, as the doctors prescribe mostly branded generics, including those from a large number of the Government hospitals, the only way to make ‘Jan Aushadhi’ drugs available to patients, is to legally allow the retailers substituting the higher priced branded generic molecules with their lower priced equivalents, sans any brand name.

Moving towards this direction, the Ministry of Health had reportedly submitted a proposal to the Drug Technical Advisory Board (DTAB) to the Drug Controller General of India (DCGI), for consideration. Wherein, the Ministry reportedly suggested an amendment of Rule 65 of the Drugs and Cosmetics Rules, 1945 to enable the retail chemists substituting a branded drug formulation with its cheaper equivalent, containing the same generic ingredient, in the same strength and the dosage form, with or without a brand name.

However, in the 71st meeting of the DTAB held on May 13, 2016, its members reportedly turned down that proposal of the ministry. DTAB apparently felt that given the structure of the Indian retail pharmaceutical market, the practical impact of this recommendation may be limited.

For this reason, the ‘Pradhan Mantri Jan Aushadhi Yojana’, appears to be not so well thought out, and a one-off ‘making feel good’ type of a scheme. It is still unclear how would the needy patients derive any benefit from this announcement.

Conclusion:

On June 20, 2016, while maintaining the old policy of 100 per cent FDI in the pharmaceutical sector, Prime Minister Modi announced his Government’s decision to allow foreign investors to pick up to 74 per cent equity in domestic pharma companies through the automatic route.

This announcement, although is intended to brighten the prospects for higher foreign portfolio and overseas company investment in the Indian drug firms, is unlikely to have any significant impact, if at all, on the prevailing abysmal health care environment of the country.

Hopefully, with the development of 100 ‘smart cities’ in India, with 24×7 broadband, Wi-Fi connectivity, telemedicine would be a reality in improving access to affordable healthcare, at least, for the population residing in and around those areas.

Still the fundamental question remains: What happens to the remaining vast majority of the rural population of India? What about their health care? Poorly thought out, and apparently superficial ‘Pradhan Mantri Jan Aushadhi Yojana’ won’t be able to help this population, either. 

With the National Health Policy 2015 draft still to see the light of the day in its final form, the path ahead for healthcare in India is still rather hazy, if not worrying. 

As stated before, in the Prime Minister’s recent speech delivered at the ‘Capitol Hill’ of the United States earlier this month, development of a robust healthcare infrastructure in the country did not find any mention in his ‘to-do’ list.

Leaving aside the ‘Capitol Hill’ for now, considering the grave impact of health care on the economic progress of India, shouldn’t the ‘Raisina Hill’ start pushing the envelope, placing it in one of the top positions of the national ‘to-do’ list, only to protect the health interest of ‘We The People 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.

New “National IPR Policy” of India – A Pharma Perspective

Whether under pressure or not, is hardly of any relevance now. What is relevant today is the fact that the new Indian Government, almost in a record time of just around two months, has been able to release a high quality first draft of an important national policy for public discourse.

In October 2014, the Department of Industrial Policy and Promotion (DIPP) constituted a six-member ‘Think Tank’ chaired by Justice (Retd.) Prabha Sridevan to draft the ‘National IPR Policy’ of India and taking quick strides, on December 19, 2014, released its first draft of 29 pages seeking stakeholders’ comments and suggestions on or before January 30, 2015. A meeting with the stakeholders has now been scheduled on February 5, 2015 to take it forward.

A quick glance at the Draft IPR Policy:

The proposed ‘Mission Statement’ as stated in the draft “National IPR Policy” is:

“To establish a dynamic, vibrant and balanced intellectual property system in India, to foster innovation and creativity in a knowledge economy and to accelerate economic growth, employment and entrepreneurship.”

Specifying its vision, mission and objectives, the draft policy suggests adopting a catchy national slogan to increase IP awareness: ‘Creative India; Innovative India’ and integrating IP with “Smart cities”, “Digital India” and “Make in India” campaigns of the new Government.

The ‘Think Tank’ dwells on the following seven areas:

  • IP Awareness and Promotion
  • Creation of IP
  • Legal and Legislative Framework
  • IP Administration and Management
  • Commercialization of IP
  • Enforcement and Adjudication
  • Human Capital Development

In the policy document, the ‘Think Tank’ has discussed all the above seven areas in detail. However, putting all these in a nutshell, I shall highlight only three of those important areas.

1. To encourage IP, the ‘Think Tank’ proposes to provide statutory incentives, like tax benefits linked to IP creation, for the entire value chain from IP creation to commercialization.

2. For speedy redressal of patent related disputes, specialized patent benches in the high courts of Bombay, Calcutta, Delhi and Madras have been mooted. The draft also proposes creation of regional benches of the IPAB in all five regions where IPOs are already located and at least one designated IP court at the district level.

3. The draft concludes by highlighting that a high level body would monitor the progress of implementation of the National IP Policy, linked with performance indicators, targeted results and deliverables. Annual evaluation of overall working of the National IP Policy and quantification of the results achieved during the period have also been suggested, along with a major review of the policy after 3 years.

Although the National IPR policy cuts across the entire industrial spectrum and domains, in this article I shall deliberate on it solely from the pharmaceutical industry perspective.

Stakeholders’ keen interest in the National IPR Policy – Key reasons:

Despite full support of the domestic pharmaceutical industry, the angst of the pharma MNCs on the well-balanced product patent regime in India has been simmering since its very inception, way back in 2005.

A chronicle of recent events, besides the seven objectives of the IPR policy as enumerated above, created fresh general inquisitiveness on how would this new policy impact the current pharmaceutical patent regime of India, both in favor and also against.

Here below are examples of some of those events:

  • At a Congressional hearing of the United States in July 2013, a Congressman reportedly expressed his anger and called for taking actions against India by saying:

“Like all of you, my blood boils, when I hear that India is revoking and denying patents and granting compulsory licenses for cancer treatments or adopting local content requirements.”

This short video clipping captures the tone and mood of one such hearing of the US lawmakers.

  • On April 30, 2014, the United States in its report on annual review of the global state of IPR protection and enforcement, named ‘Special 301 report’, classified India as a ‘Priority Watch List Country’. Placement of a trading partner on the ‘Priority Watch List’ or ‘Watch List’ indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on IP.
  • It further stated that USTR would conduct an Out of Cycle Review (OCR) of India focusing in particular on assessing progress made in establishing and building effective, meaningful, and constructive engagement with the Government of India on IPR issues of concern. An OCR is a tool that USTR uses on adverse IPR issues and for heightened engagement with a trading partner to address and remedy in those areas.
  • “India misuses its own IP system to boost its domestic industries,” commented the US Senator Orrin Hatch while introducing the 2014 report of the Global Intellectual Property Centre (GIPC) of US Chamber of Commerce on ‘International Intellectual Property (IP) Index’. In this report, India featured at the bottom of a list of 25 countries, scoring only 6.95 out of 30. The main reasons for the low score in the report were cited as follows:

-       India’s patentability requirements are (allegedly) in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.

-       Non-availability of regulatory data protection

-       Non-availability of patent term restoration

-       The use of Compulsory Licensing (CL) for commercial, non-emergency situations.

Based on this report, US Chamber of Commerce urged USTR to classify India as a “Priority Foreign Country”, a terminology reserved for the worst IP offenders, which could lead to trade sanctions.

  • In the midst of all these, international media reported:

“Prime Minister Narendra Modi got an earful from both constituents and the US drug industry about India’s approach to drug patents during his first visit to the US last month. Three weeks later, there is evidence the government will take a considered approach to the contested issue.”

  • Washington based powerful pharmaceutical industry lobby group – PhRMA, which seemingly dominates all MNC pharma trade associations globally, has reportedly urged the US government to continue to keep its pressure on India in this matter. According to industry sources, PhRMA has a strong indirect presence and influence in India too. Interestingly, as reported in the media a senior representative of this lobby group would be India when President Obama visits the country later this month.
  • In view of all these concerns, during Prime Minister Narendra Modis’s visit to the United States in September 2014, a high-level Indo-US working group on IP was constituted as a part of the Trade Policy Forum (TPF), which is the principal trade dialogue body between the two countries.
  • Almost immediately after the Prime Minister’s return to India, in October 2014, the Government formed a six-member ‘Think Tank’ to draft ‘National IPR Policy’ and suggest ways and legal means to handle undue pressure exerted by other countries in IPR related areas. The notification mandated the ‘Think Tank’ to examine the current issues raised by the industry associations, including those that have appeared in the media and give suggestions to the ministry of Commerce and Industry as appropriate.
  • However, the domestic pharma industry of India, many international and national experts together with the local stakeholders continue to strongly argue against any fundamental changes in the prevailing patent regime of India.

A perspective of National IPR Policy in view of Pharma MNCs’ concerns:

I shall now focus on four key areas of concern/allegations against India on IPR and in those specific areas what has the draft National IPR Policy enumerated.

- Concern 1: “India’s patentability requirements are in violations of ‘Trade Related Aspects of Intellectual Property Rights (TRIPS)’ Agreement.”

Draft IPR Policy states: “India recognizes that effective protection of IP rights is essential for making optimal use of the innovative and creative capabilities of its people. India has a long history of IP laws, which have evolved taking into consideration national needs and international commitments. The existing laws were either enacted or revised after the TRIPS Agreement and are fully compliant with it. These laws along with various judicial pronouncements provide a stable and effective legal framework for protection and promotion of IP.”

A recent vindication: Just last week (January 15, 2015), Indian Patent Office’s (IPO’s) rejection of a key patent claim on Hepatitis C drug Sovaldi (sofosbuvir) of Gilead Sciences Inc. further reinforces that India’s patent regime is robust and on course.

Gilead’s patent application was opposed by Hyderabad based Natco Pharma. According to the ruling of the IPO, a new “molecule with minor changes, in addition to the novelty, must show significantly enhanced therapeutic efficacy” when compared with a prior compound. This is essential to be in conformity with the Indian Patents Act 2005. Gilead’s patent application failed to comply with this legal requirement.

Although Sovaldi ((sofosbuvir) carries an international price tag of US$84,000 for just one treatment course, Gilead, probably evaluating the robustness of Sovaldi patent against Indian Patents Act, had already planned to sell this drug in India at a rice of US$ 900 for the same 12 weeks of therapy.

It is envisaged that this new development at the IPO would prompt entry of a good number of generic equivalents of Sovaldi. As a result, the price of sofosbuvir (Sovaldi) formulations would further come down, despite prior licensing agreements of Gilead in India, fetching huge relief to a large number of patients suffering from Hepatitis C Virus, in the country.

However, reacting to this development Gilead has said, “The main patent applications covering sofosbuvir are still pending before the Indian Patent Office…This rejection relates to the patent application covering the metabolites of sofosbuvir. We (Gilead) are pleased that the Patent Office found in favor of the novelty and inventiveness of our claims, but believe their Section 3(d) decision to be improper. Gilead strongly defends its intellectual property. The company will be appealing the decision as well as exploring additional procedural options.”

For more on this subject, please read my blog post of September 22, 2014 titled, “Gilead: Caught Between A Rock And A Hard Place In India

- Concern 2: “Future negotiations in international forums and with other countries.”

Draft IPR Policy states: “In future negotiations in international forums and with other countries, India shall continue to give precedence to its national development priorities whilst adhering to its international commitments and avoiding TRIPS plus provisions.

- Concern 3: “Data Exclusivity or Regulatory Data Protection.”

Draft IPR Policy states: “Protection of undisclosed information not extending to data exclusivity.”

- Concern 4: “Non-availability of patent term restoration, patent linkage, use of compulsory licensing (CL) for commercial, non-emergency situations”.

Draft IPR Policy: Does dwell on these issues.

I discussed a similar subject in my blog post of October 20, 2014 titled, “Unilateral American Action on Agreed Bilateral Issues: Would India Remain Unfazed?

Conclusion: 

Overall, the first draft of the outcome-based model of the National IPR Policy appears to me as fair and balanced, especially considering its approach to the evolving IPR regime within the pharmaceutical industry of India.

The draft policy though touches upon the ‘Utility Model’, intriguingly does not deliberate on ‘Open Source Innovation’ or ‘Open Innovation’.

Be that as it may, the suggested pathway for IPR in India seems to be clear, unambiguous, and transparent. The draft policy understandably has not taken any extreme stance on any aspect of the IP. Nor does it succumb to high voltage power play of the United States and its allies in the IPR space, which, if considered, could go against the public health interest.

It is heartening to note, a high level body would monitor the progress of implementation of the National IPR Policy, which will be linked with performance indicators, targeted results and deliverables. Annual evaluation of the overall working of the policy and the results achieved will also be undertaken. A major review of the policy will be done after 3 years.

That said, pharma MNCs in general, don’t seem to quite agree with this draft policy probably based purely on commercial considerations, shorn of public health interest. It is quite evident, when a senior lobbyist of a powerful American pharma lobby group reportedly commented to Indian media on the draft National IPR Policy as follows:

“Real progress will only be achieved when India demonstrates through policy change that it does indeed value the importance of intellectual property, especially for the innovative treatments and cures of today and tomorrow”.

It appears, India continues to hold its stated ground on IPR with clearly enunciated policy statements. On the other hand MNCs don’t stop playing hardball either. Though these are still early days, the question that floats on the top of mind: Who would blink first?…India? Do you reckon so?

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.