Tag Archives: drugs

Access to affordable healthcare to 65% of Indian population still remains a key issue even after six decades of independence of the country.

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Despite so much of stringent government control, debate and activism on the affordability of modern medicines in India, on the one hand, and the success of the government to make medicines available in the country at a price, which is cheaper than even Pakistan, Bangladesh and Sri Lanka, on the other, the fact still remains, about 65% of Indian population does not have access to affordable modern medicines, as compared to just 15% in China and 22% in Africa.The moot question therefore arises, despite all these stringent price regulation measures by the government and prolonged public debates over nearly four decades to ensure better ‘affordability of medicines’, why then ‘access to modern medicine’ remained so abysmal to a vast majority of the population of India, even after sixty years of independence of the country?This vindicates the widely held belief that in India no single minister or ministry can be held accountable by the civil society for such a dismal performance in the access to healthcare in the country. Is it then a ‘system flaw’? May well be so.

Poor healthcare infrastructure:

As per the Government’s own estimate, India falls far short of its minimum requirements towards basic public healthcare infrastructure. The records indicate, as follows:

1. A shortage of 4803 Primary Health Centres (PHC)

2. A shortage of 2653 Community Health Centres (CHC)

3. No large Public Hospitals in rural areas where over 70% of the populations live

4. Density of doctors in India is just 0.6 per 1000 population against 1.4 and 0.8 per 1000 population in China and Pakistan respectively, as reported by WHO.

The Government spending in India towards healthcare is just 1.1% of GDP, against 2% of China and 1.6% of Sri Lanka, as reported by the WHO.

Some good sporadic public healthcare initiatives to improve access:

The government allocation around US$2.3 billion for the National Rural Health Mission (NRHM), is a good initiative to bring about uniformity in quality of preventive and curative healthcare in rural areas across the country.
While hoping for the success of NRHM, inadequacy of the current rural healthcare infrastructure in the country with about 80 percent of doctors, 75 percent dispensaries and 60 percent of hospitals located only in the urban India may encourage the skeptics.

PPP to improve access to medicines:

At this stage of progress of India, ‘Public Private Partnership (PPP)’ initiatives in the following four critical areas could prove to be very apt to effectively resolve this issue

1. PPP to improve affordability:

It appears that in earlier days, the policy makers envisaged that stringent drug price control mechanism alone will work as a ‘magic wand’ to improve affordability of medicines and consequently their access to a vast majority of Indian population.

When through stricter price control measures the access to medicines did not improve in any significant measure, the industry associations reportedly had jointly suggested to the government for a policy shift towards public-private-partnership (PPP) model way back in December 2006. The comprehensive submission made to the government also included a proposal of extending ‘concessional price for government procurement’ under certain criteria.

In this submission to the government, the industry did not suggest total price de-regulation for the pharmaceutical industry of India. Instead, it had requested for extension of the price monitoring system of the ‘National Pharmaceutical Pricing Authority (NPPA)’, which is currently working very effectively for over 80 percent of the total pharmaceutical industry in India. Balance, less than 20 percent of the industry, is currently under cost-based price control.

However, the argument of the NPPA against this suggestion of the pharmaceutical industry is that the market entry price of any formulation under the ‘price monitoring’ mechanism is not decided by the government. Hence without putting in place any proper price control/negotiation system to arrive at the market entry price of the price decontrolled formulations, the existing ‘price monitoring’ mechanism may not be as effective, as in future more and more high price patented non-schedule formulations are expected to be introduced in the market.

However, the government seems to have drafted a different drug policy, which has now been referred to a new Group of Ministers for approval. It is worth noting that to make the PPP proposal of the industry effective, the Ministry of Health, both at the centre and also at the state levels, will require to quickly initiate significant ‘capacity building’ exercises in the primary and also in the secondary healthcare infrastructural facilities. FICCI is reported to have suggested to the Government for an investment of around US$ 80 billion to create over 2 million hospital beds for similar capacity building exercises.

Frugal budgetary allocation towards healthcare could well indicate that the government is gradually shifting its role from public healthcare provider to healthcare facilitator for the private sectors to help building the required capacity. In such a scenario, it is imperative for the government to realize that the lack of even basic primary healthcare infrastructure leave aside other financial incentives, could impede effective penetration of private sectors into semi-urban and rural areas. PPP model should be worked out to address such issues, as well.

2. PPP to leverage the strength of Information Technology (IT) to considerably neutralize the healthcare delivery system weaknesses:

Excellence in ‘Information Technology’ (IT) is a well recognized strength that India currently possesses. This strengths needs to be leveraged through PPP to improve the process weaknesses. Harnessing IT strengths, in the areas of drug procurement and delivery processes, especially in remote places, could hone the healthcare delivery mechanism, immensely.

3. PPP in ‘Telemedicine’:

‘‘Telemedicine” is another IT enabled technology that can be widely used across the nation to address rural healthcare issues like, distant learning, disease prevention, diagnosis and treatment of ailments.
Required medicines for treatment could be made available to the patients through ‘Jan Aushadhi’ initiative of the Department of Pharmaceuticals (DoP), by properly utilising the Government controlled public distribution outlets like, ration shops and post offices, which are located even in far flung and remote villages of India.

4. PPP in healthcare financing for all:

Unlike many other countries, over 72 percent of Indian population pay out of pocket to meet their healthcare expenses.

While out of a population of 1.3 billion in China, 250 million are covered by insurance; another 250 million are partially covered and the balance 800 million is not covered by any insurance, in India total number of population who have some healthcare financing coverage will be around 200 million and the penetration of health insurance is just around 3.5% of the population. India is fast losing grounds to China mainly due to their better response to healthcare needs of the country.

As the government has announced ‘Rashtriya Swasthaya Bima Yojna (RSBY)’ for the BPL families, an integrated and robust healthcare financing model for all, is expected to address the affordability issue more effectively.

According to a survey done by National Sample Survey Organisation (NSSO), 40% of the people hospitalised in India borrow money or sell assets to cover their medical expenses. A large number of population cannot afford to required treatment, at all.

Conclusion:

An integrated approach by creating effective healthcare infrastructure across the country, leveraging IT throughout the healthcare space and telemedicine, appropriately structured robust ‘Health Insurance’ schemes for all strata of society, supported by evenly distributed ‘Jan Aushadhi’ outlets, deserve consideration of the government to improve access to affordable healthcare to a vast majority of population of the country, significantly.

Well researched PPP models in all these areas, involving the stakeholders, need to be effectively implemented, sooner, to address this pressing issue.

By Tapan Ray

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

A global pharmaceutical iconoclast, who sees “Fortune” beyond the creamy top layers of the society … even at the bottom of the Pyramid

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In March 2009 GlaxoSmithKline (GSK) unraveled a path breaking vision, within the global pharmaceutical industry, with the creation of a ‘voluntary patent pool’to spark development of new treatments for neglected diseases of the poorest countries of the world.

The head honcho of GSK Andrew Witty articulated, as reported by Reuters, ‘he feels that this is the right way to help research, especially of tropical diseases like malaria, filariasis, cholera etc. to meet the unmet needs of the poorer population of the world’.

Cares for the poor:
Simultaneously, Witty also announced that GSK will sell its patented medicines in the 50 poorest countries of the world at 25% of their cost in the developed nations and invest 20% of profits made in these poorest countries to help creating and developing local healthcare infrastructure and treatment facilities for the indigenous population.

It appeared to me that this young global pharma CEO is charting the yet uncharted frontiers where there are no footsteps to follow. Witty attained this iconic status when he aired his views without slightest hesitation by admitting openly, “Society expects us to do more in addressing these issues. To be frank, I agree. We have the capacity to do more and we can do more”.

Challenged the global pharmaceutical industry:
The young CEO, to utter surprise of many, further added, “he was challenging the industry to go further to address global health problems by being more flexible on patent protection and pricing in the neediest countries”.

That was March 2009…Came March 2010…

Repeated the firm resolve:
During his visit to India in March 2010, Witty reiterated the same resolve with unequivocal clarity. When a Journalist from “The Economics Times” asked him, ‘There are concerns among some of your global peers about the patent and regulatory environment in this country. Are you concerned with the existing regulatory environment in India?’, Witty replied with his usual conviction and élan as follows:

“I am relatively relaxed with the Indian regulatory environment. The government has made it clear about the direction to have an intellectual property (IP) mechanism and to be TRIPS compliant. Some people are unrealistic and want everything to change overnight. But we should be absolutely realistic about pricing to keep it affordable for India. If someone has the IP right, it does not mean that it should make it inaccessible for lower income people. Over the next 10-15 years India will become increasingly IP defined market.”

Is it a mere ‘lip service?’:
If you ask me, does this leader belong to a different genre? I shall reply with an emphatic ‘yes’. Andrew Witty seems to be indeed ‘walking the talk’ and is understandably quite capable of thinking much beyond of pleasing ‘The Wall Street’ and the likes of it, just with quarter to quarter business performance and ‘guidance’. He thinks about the patients both rich and poor. There are no reasons to doubt this patient-centric noble intent, Nor does it appear to me as a mere ‘lip service’.

One can interpret a ‘one-off statement’ made by any global pharma CEO in a way that one would like to. However, repetition of the same statement time and again in different counties possibly reflects nothing but firm resolves of a young visionary, determined to translate the same into reality with unprecedented courage.

Conclusion:
This iconic CEO, I reckon, is doing no charity or philanthropy with his path breaking vision, as those are not certainly the purpose of any business. Neither should one do charity or philanthropy with shareholders’ money and without their clear consent. Andrew Witty, in my view, perhaps is in the same page as with the management Guru C.K. Prahalad, who first postulated, now an oft repeated hypothesis, ‘The fortune at the bottom of the pyramid’.
Witty, as I have been witnessing, has already demonstrated his prowess with the traditional pharmaceutical global business model, in a comparative yardstick. Now professionally equipped with a strong pharmaceutical marketing background, honed over so many years, I am sure, Andrew will succeed even more in curving out a lion’s share of the global pharmaceutical business for his company, in the long run, creating a win-win situation for much over six billion global people, including a vast majority of the ailing, poor, neglected, hungry and marginalized population of the world.
By Tapan Ray

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

Collaborative commercialization of inexpensive smaller incremental innovation in Chemistry will play an important role in bringing affordable new drugs or new drug delivery systems

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It started in the 17th century:

Alchemy, a medieval chemical science and speculative philosophy aiming to achieve the transmutation of the base metals into gold, searching for a universal cure for disease and indefinitely prolonging life, not considered a science by many, gradually became the basis for the development of chemistry into the 17th century. However, perceivable impact of chemistry on humanity, through its smaller incremental innovation, started being felt only in the second half of the 19th century.

Chemistry – an interface between the physical world and humanity:

Experts in this field often opine that the current form of human civilization has been made possible, to a great extent, through significant advancement of such innovation in chemistry and its role in modern technology. Chemistry is indeed an interface between the physical world on the one hand and the humanity on the other.

Getting a perspective of resource and time requirements for such initiatives:

Is there any similarity between development of pharmaceutical chemistry and IT software?

Now a days, one finds a striking similarity between small incremental innovation in IT software and the same in pharmaceutical chemistry. Both are creative and belong to the knowledge economy. Scientists in both the communities try to generate innovative ideas, which can lead to their effective commercialization.

Resource requirements for these two are strikingly different:

However, the nature of the commercialization process of these two sciences, though seemingly similar in terms of innovativeness, is indeed quite different. In the software community, two people can implement an idea with minimal resource requirement and could end up with a profitable commercialized product, without much difficulty. In contrast, two chemists may come up with a brilliant idea, which in many cases, may require significant investment of resources much before to even think to get the initial product commercialized. Subsequent steps of scaling up will be a separate issue altogether, with more resource commitment.

The process of commercialization of smaller incremental innovation in pharmaceutical chemistry is much longer:

As we all know, the process of commercialization of incremental innovation in chemistry takes a much longer time scale, as these are not usually spare time projects, unlike computer softwares. The cost involved in testing out and implementing a new idea in chemistry is very high and may not even be possible without any robust institutional backing.

Target inexpensive smaller incremental innovation in pharmaceutical chemistry:

Some illustrative examples of such smaller incremental innovation in chemistry are as follows:

1. Development of pharmaceutical co-crystals

2. Merger of chemistry of traditional and modern medicines for synergy in both efficacy and safety

3. Chemical technology switch: taking technology of one field and transferring it to a different field to get a new drug substance

4. Application of polymorphic chemistry in drug discovery.

The process has begun:

International experience:

The chemistry department of Oxford University, U.K, which is incidentally the biggest chemistry department of the western world, has made significant advances in commercializing incremental innovation in chemistry. Among many, they created and commercialized the following three entities through such incremental innovation:

• Medisense

• Oxford Molecular

• Oxford Assymetry

The Indian experience:

Despite all challenges, in India, as well, the commercialization process of smaller incremental innovation in chemistry has already begun. The Chemistry Department of the University of Delhi has developed 11 patentable technologies for improved drug delivery system using nano-particles. One of such technologies was development of ‘smart’ hydrogel nano-particles for encapsulating water-soluble drugs. This technology was sold to Dabur Research Foundation in 1999.

Another nano-particle drug delivery technology in opthalmogy area was also commercialized by transferring it to Chandigarh based Panacea Biotech Ltd.

Conclusion:

This process is expected to gain momentum in our country too, contributing significantly to the progress of the healthcare sector of the nation. “Commercializing smaller incremental innovation in Pharmaceutical Chemistry”, I reckon, will play a key role in providing affordable modern medicines to a vast majority of the population, as India transforms itself into a knowledge superpower.

By Tapan Ray

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

Regulatory Data Protection and Indian Interest

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Of late, I read and hear raging debates, especially through media, on the relevance of Regulatory Data Protection (RDP) or Data Exclusivity in India. This issue is being considered by many as a fight between the commercial interests of multinational and the domestic Indian companies. In this fight the provision for RDP is being highlighted as something, which is against our national interest.

In this scenario, I shall try to argue that in our country, on the contrary, a provision for a robust RDP mechanism, which will protect clinical trial data of ANY innovator both against disclosure and unfair commercial use, is in the best interest of India, at least, for the following four important reasons:

1. RDP to benefit even small to medium size domestic Indian pharmaceutical companies:

Small to medium size pharmaceutical companies in India, who do not have adequate wherewithal to get engaged in drug discovery research, will also be benefitted from RDP. They will be able to obtain data exclusivity for a specific period on the new clinical data that they will be generating for new fixed dose combinations (FDC), new medical uses and new formulations of medicines. This will help them create more resources to invest in R&D to meet the unmet needs of the patients.

2. RDP on traditional medicines to benefit Indian Pharmaceutical companies:

Rich reservoir of Indian traditional medicines, commonly categorized under Ayurvedic, Unani and Siddha, are being used by a large majority of Indian populations over centuries. Such medicines are not protected by product patents, as such.

Further clinical development of these traditional medicines for greater efficacy and safety profile or newer usage, even if the ultimate product is not patentable, will help the common man immensely with affordable medicines.

The new clinical data generated by the researcher for such initiatives will be protected through RDP for a specific time period both against disclosure and unfair commercial use to make such efforts commercially viable and attractive.

RDP in this way can help the researcher to invest in the R&D of traditional plant based or similar medicines, which are not protected by any product patent. This in turn will help many domestic Indian pharmaceutical companies to get engaged in less cost intensive R&D with a robust economic model, built around RDP or data exclusivity.

3. RDP to boost outsourcing of clinical trials to India:

As per CII, clinical trials market in India is currently growing at 30-35%. McKinsey estimated that EU and US based pharmaceutical companies will spend US$ 1.5 billion per year on clinical trials in India by 2010. Currently China with 5 year regulatory data protection in place is having significant edge over India in this area.

Many CROs have started making investments in India to create world class clinical trial facilities to encash this opportunity. Such investments, both domestic as well as in form of FDI, are expected to further increase, if an effective RDP mechanism is created within the country.

4. RDP to help Competition from China:

Despite some significant inherent weaknesses of China, as compared to India, in terms of a preferred global pharmaceutical business destination, China is fast outpacing India in R&D related activities. More number of global R&D based pharmaceutical companies has started investing quite significantly in China. One of the key reasons for such development is that China provides product patent, patent linkage and RDP, whereas India provides only product patent.

R&D based global pharmaceutical and biotech companies who want a robust IPR regime in the countries where they will invest more, therefore, prefer China to India in terms of FDI.

A robust RDP mechanism in India would help bridging this gap considerably.

Conclusion:

There is a widespread apprehension in some quarters in India that RDP will delay the entry of cheaper generic drugs in the country. This apprehension seems to be unfounded.

Unlike product patent, RDP will not provide any market exclusivity even within the specified period of RDP. Any generic manufacturer can generate its own regulatory data and obtain marketing approval from the Drug Controller General of India (DCGI) to market a non patent related product in the country, just as in any developed market of the world. Thus RDP will not delay any generic entry into the market.

My final argument, if the provision for RDP or Data Exclusivity will delay the entry of cheaper generic medicines into India, why the same is not happening in the developed markets of the world like, USA, EU, Japan and even in China, despite having a robust provision for RDP or Data Exclusivity firmly in place in each of these countries?

Thus in my view, the provision for RDP in India is undoubtedly in the best interest of our country.

By Tapan Ray

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

Healthcare reform process and policy measures to reduce socio-economic inequalities should be implemented in tandem for optimal economic progress of a nation.

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Important research studies indicate that health of an individual is as much an integral function of the related socio-economic factors as it is influenced by the person’s life style and genomic configurations.It has now been well established that socio-economic disparities including the educational status lead to huge disparity in the space of healthcare.Healthcare preventive measures with focus just on disease related factors like, hygiene, sanitation, alcohol abuse, un-protected sex, smoking will not be able to achieve the desired outcome, unless the underlying socio-economic issues like, poverty, hunger, education, justice, values, parental care are not properly addressed.

It has been observed that reduction of social inequalities ultimately helps to effectively resolve many important healthcare issues. Otherwise, the minority population with adequate access to knowledge, social and monetary power will always have necessary resources available to address their concern towards healthcare, appropriately.

Regular flow of newer and path breaking medicines to cure and effectively treat many diseases, have not been able to eliminate either trivial or dreaded diseases, alike. Otherwise, despite having effective curative therapy for malaria, typhoid, cholera, diarrhoea/dysentery and venereal diseases, why will people still suffer from such illnesses? Similarly, despite having adequate preventive therapy, like vaccines for diphtheria, tuberculosis, polio, hepatitis and measles, our children still suffer from such diseases. All these continue to happen mainly because of socio-economic considerations.

Following are some research studies, which I am using just as examples to vindicate the point:

• HIV/AIDs initially struck people across the socio-economic divide. However, people from higher socio-economic strata responded more positively to the disease awareness campaign and at the same time more effective and expensive drugs started becoming available to treat the disease, which everybody suffering from the ailment cannot afford. As a result, HIV/AIDS are now more prevalent within the lower socio-economic strata of the society.

• Not so long ago, people across the socio-economic status used to consume tobacco in many form. However, when tobacco smoking and chewing were medically established as causative factors for lung and oral cancers, those coming predominantly from higher/middle echelon of the society started giving up smoking and chewing of tobacco, as they accepted the medical rationale with their power of knowledge. Unfortunately the same has not happened with the people of relatively lower socio-economic status. As a consequence of which, ‘Bidi’ smoking, ‘Gutka’/tobacco chewing have not come down significantly within people belonging to such class, leading to more number of them falling victim of lung and oral cancer.

Thus, in future, to meet the unmet needs when more and more sophisticated and high cost disease treatment options will be available, it will be those people with higher socio-economic background who will be benefitted more with their education, knowledge, social and monetary power. This widening socio-economic inequality will consequently increase the disparity in the healthcare scenario of the country.

Phelan and Link in their research study on this issue has, therefore, remarked:

“Breakthroughs in medical science can do a lot to improve public health, but history has shown that, more often than not, information about and access to important new interventions are enjoyed primarily by people at the upper end of the socioeconomic ladder. As a result, the wealthy and powerful get healthier, and the gap widens between them and people who are poor and less powerful.”

Conclusion:

Though healthcare reform measures are essential for the progress of any nation, without time bound simultaneous efforts to reduce the socio-economic inequalities, it will not be easy for any nation to achieve the desirable outcome.

By Tapan Ray

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

China has recently unfolded the blueprints of its new healthcare reform measures, when will India do so?

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Early April, 2009, China, a country with 1.3 billion people, unfolded a plan for a new healthcare reform process for the next decade to provide safe, effective, convenient and affordable healthcare services to all its citizens. A budgetary allocation of U.S $124 billion has been made for the next three years towards this purpose.
China’s last healthcare reform was in 1997:

China in 1997 took its first reform measure to correct the earlier practice, when the medical services used to be considered just like any other commercial product, as it were. Very steep healthcare expenses made the medical services unaffordable and difficult to access to a vast majority of the Chinese population.

Out of pocket expenditure towards healthcare services also increased in China…but…:

The data from the Ministry of Health of China indicate that out of pocketl spending on healthcare services had doubled from 21.2 percent in 1980 to 45.2 percent in 2007. At the same time the government funding towards healthcare services came down from 36.2 percent in 1980 to 20.3 percent in the same period.

A series of healthcare reforms was effectively implemented since then like, new cooperative medical scheme for the farmers and medical insurance for urban employees, to address this situation.

The core principle of the new phase of healthcare reform in China:

The core principle of the new phase of reform is to provide basic health care as a “public service” to all its citizens. This is the pivotal core principle of the new wave healthcare reform process in China where more government funding and supervision will now play a critical role.

The new healthcare reform process in China will, therefore, ensure basic systems of public health, medical services, medical insurance and medicine supply to the entire population of China. Priority will be given for the development of grass-root level hospitals in smaller cities and rural China and the general population will be encouraged to use these facilities for better access to affordable healthcare services. However, public, non-profit hospitals will continue to be one of the important providers of medical services in the country.

Medical Insurance and access to affordable medicines:

Chinese government plans to set up diversified medical insurance systems. The coverage of the basic medical insurance is expected to exceed 90 percent of the population by 2011. At the same time the new healthcare reform measures will ensure better health care delivery systems of affordable essential medicines at all public hospitals.

Careful monitoring of the healthcare system by the Chinese Government:

Chinese government will monitor the effective management and supervision of the healthcare operations of not only the medical institutions, but also the planning of health services development, and the basic medical insurance system, with greater care.

It has been reported that though the public hospitals will receive more government funding and be allowed to charge higher fees for quality treatment, however, they will not be allowed to make profits through expensive medicines and treatment, which is a common practice in China at present.

Drug price regulation and supervision:

The new healthcare reform measures will include regulation of prices of medicines and medical services, together with strengthening of supervision of health insurance providers, pharmaceutical companies and retailers.

As the saying goes, ‘proof of the pudding is in its eating’, the success of the new healthcare reform measures in China will depend on how effectively these are implemented across the country.

Healthcare scenario in India:

Per capita public expenditure towards healthcare in India is much lower than China and well below other emerging countries like, Brazil, Russia, China, Korea, Turkey and Mexico.

Although spending on healthcare by the government gradually increased in the 80’s, overall spending as a percentage of GDP has remained quite the same or marginally decreased over last several years. However, during this period private sector healthcare spend was about 1.5 times of that of the government.

It appears, the government of India is gradually changing its role from the ‘healthcare provider’ to the ‘healthcare enabler’.

High ‘out of pocket’ expenditure towards healthcare in India:

According to a study conducted by the World Bank, per capita healthcare spending in India is around Rs. 32,000 per year and as follows:

- 75 per cent by private household (out of pocket) expenditure
- 15.2 per cent by the state governments
- 5.2 per cent by the central government
- 3.3 percent medical insurance
- 1.3 percent local government and foreign donation

Out of this expenditure, besides small proportion of non-service costs, 58.7 percent is spent towards primary healthcare and 38.8% on secondary and tertiary inpatient care.

Role of the government:

Unlike, recent focus on the specific key areas of healthcare in China, in India the national health policy falls short of specific and well defined measures.

Health being a state subject in India, poor coordination between the centre and the state governments and failure to align healthcare services with broader socio-economic developmental measures, throw a great challenge in bringing adequate reform measures in this critical area of the country.

Healthcare reform measures in India are governed by the five-year plans of the country. Although the National Health Policy, 1983 promised healthcare services to all by the year 2000, it fell far short of its promise.

Underutilization of funds:

It is indeed unfortunate that at the end of most of the financial years, almost as a routine, the government authorities surrender their unutilized or underutilized budgetary allocation towards healthcare. This stems mainly from inequitable budgetary allocation to the states and lack of good governance at the public sector healthcare delivery systems.

Health insurance in India:

As I indicated above, due to unusually high (75 per cent) ‘out of pocket expenses’ towards healthcare services in India, a large majority of its population do not have access to such quality, high cost private healthcare services, when public healthcare machineries fail to deliver.

In this situation an appropriate healthcare financing model, if carefully worked out under ‘public – private partnership initiatives’, is expected to address these pressing healthcare access and affordability issues effectively, especially when it comes to the private high cost and high quality healthcare providers.

Although the opportunity is very significant, due to absence of any robust model of health insurance, just above 3 percent of the Indian population is covered by the organised health insurance in India. Effective penetration of innovative health insurance scheme, looking at the needs of all strata of Indian society will be able to address the critical healthcare financing issue of the country. However, such schemes should be able to address both domestic and hospitalization costs of ailments, broadly in line with the health insurance model working in the USA.

The Government of India at the same time will require bringing in some financial reform measures for the health insurance sector to enable the health insurance companies to increase penetration of affordable health insurance schemes across the length and the breadth of the country.

Conclusion:

It is an irony that on one side of the spectrum we see a healthcare revolution affecting over 33 percent population of the world. However, just on the other side of it where around 2.4 billion people (about 37 percent of the world population) reside in two most populous countries of the world – India and china, get incredibly lesser public healthcare support and are per forced to go for, more frequently, ‘pay from pocket’ pocket type expensive private healthcare options, which many cannot afford or just have no access to.

In both the countries, expensive ‘pay from pocket’ healthcare service facilities are increasing at a greater pace, whereas public healthcare services are not only inadequately funded, but are not properly managed either. Implementation level of various excellent though much hyped government sponsored healthcare schemes is indeed very poor.

Moreover, despite various similarities, there is a sharp difference between India and China at least in one area of the healthcare delivery system. The Chinese Government at least guarantees a basic level of publicly funded and managed healthcare services to all its citizens. Unfortunately, the situation is not the same in India, because of various reasons.

Over a period of time, along with significant growth in the respective economies of both the countries, with China being slightly ahead of India for many reasons, life expectancy in both India and China has also increased significantly, which consequently has lead to increase in the elderly population of these countries. The disease pattern also has undergone a shift in both the countries, mainly because of this reason, from infectious to non-infectious chronic illnesses like, hypertension, diabetes, arthritis etc. further increasing the overall burden of disease.

High economic growth in both the countries has also lead to inequitable distribution of wealth, making many poor even poorer and the rich richer, further complicating the basic healthcare issues involving a vast majority of poor population of India.

A recently published report indicates that increasing healthcare expenditure burden is hitting the poor population of both the countries very hard. The report further says that considering ‘below the poverty line’ (BPL) at U.S$ 1.08 per day, out of pocket healthcare expenditure has increased the poverty rate from 31.1 percent to 34.8 percent in India and from 13.7 percent to 16.7 percent in China.

To effectively address this serious situation, the Chinese Government has announced its blueprint for a new healthcare reform measures for the coming decade. How will the Government of India respond to this situation? It will indeed be interesting to watch.

By Tapan Ray

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

Tackling the menace of counterfeit medicines – vested interests or petty sentiments should not make the pressing public healthcare issue irrelevant.

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There are following three clearly emerging views on the global issue of counterfeit drugs:1. The innovator companies feel that the generic pharmaceutical industry and the drug regulators are
not really very keen to effectively address and resolve this global public health issue.2. The generic companies and the drug regulators feel that the problem is not as acute as it is
projected to be and the innovator global pharmaceutical companies through their intense advocacy
campaign are trying to exploit the situation to fight against generic medicines and parallel imports.

3. Some other group, including a section of NGOs claim that an important public health sentiment is
being used by the R&D based global pharmaceutical companies to extend intellectual property rights
(IPR) to patients’ safety issue, allegedly for vested interest. These organizations have taken their arguments
to various international platforms like Anti-Counterfeiting Trade Agreement (ACTA) and
International Medical Products Anti-Counterfeiting Taskforce (IMPACT) of the World
Health Organization (WHO), for effective resolution of their grievances.

Addressing some of these concerns:

• IPR being extended to the definition of counterfeit medicines:

Even in India, ‘misbranding’ though an integral part of IPR, is considered as a public health issue and is an offence under Section 17 of the Drugs and Cosmetics Acts, 1940. Albany Law Journal of Science and Technology, 2006 has estimated a loss to the industry towards such counterfeit medicines of US$ 30 billion, which is about 6% of the turnover of the global pharmaceutical industry.

• Magnitude of problem with counterfeit medicines has been inflated:

In the industrialized and developed nations of the world with effective regulatory control, the problem perhaps, may not be as acute. A study done by IMPACT in 2006 indicates that in countries like, the USA, EU, Japan, Australia, Canada and New Zealand the problem is less than 1%.

Similar study, on the other hand, indicated that in the developing nations like parts of Asia, Latin America and Africa more than 30% of the medicines are counterfeits. It has also been reported that in South East Asia, estimated prevalence of counterfeit artesunate for malaria is 33-53%.

• Apprehension from some section of the generic pharmaceutical industry:

Apprehensions from some section of the generic pharmaceutical industry that attempts are being made by the interested groups within the industry to bring generic drugs under the purview of counterfeit medicines, is indeed unfounded. As from no developed countries around the world, there has been any threat to non-patent infringing legal generic medicines. And why there should be any such threat at all, when the world is witnessing the global pharmaceutical companies scaling up their generic business operations?

On the contrary generic pharmaceutical business, in almost all developed markets across the world, is growing at a much faster pace than the patented products of the innovator companies and this trend is expected to continue at least in short to medium term.

An unexplained similarity:

From the above details one will be tempted to draw a conclusion that in all those countries where access to modern medicines is poor, incidences of counterfeit medicines are higher. IMPACT has reported counterfeit versions of all types of medicines ranging from anti-malarial, anti-hypertensives, anti-tubercular, anti-retroviral to cardiovascular and other life saving and life style drugs, from these countries.

Various types of counterfeit medicines:

WHO has indicated following types of counterfeit medicines:

• Without active ingredients: 32%

• Wrong ingredients: 21.4%

• Incorrect quantities of active ingredients: 20.2%

• Right quantities of active ingredients but in fake packaging: 15.6%

• High levels of impurities and contaminants: 8.5%

• “Substituted ingredients of anything from paracetamol to boric acid, talcum powder, rat poison or
road paint”

• Medicines purchased online from illegal internet sites: 50%

Factors influencing flourishing trade of counterfeit medicines:

WHO IMPACT has reported following key factors:

• Low manufacturing costs, thus higher profit margin

• Albany Law Journal reports that high pricing ratio of counterfeit medicines compared to a branded
product attracts counterfeiters

• In countries like India the risk of detection of fake medicines is quite low where the penalties for such
heinous crime even today is very lenient, as the amended anti-counterfeit law, for some strange
reasons, has not been made operational, as yet.

Global sales forecast for counterfeit medicines:

The sales of counterfeit medicines across the world as estimated by the ‘Centre for Medicine in Public Interest’ will be around US$75 billion by the end of 2010. This is an increase of over 90% as compared to 2005.

Incidence of detection of counterfeit medicines:

A report from the WHO’s Executive Board in its 124th session indicated that the detection of counterfeit medicines in 2007 had increased to more than 1,500. This reflects an increase of around 20% over 2006 and ten times more compared to year 2000.

Volume of counterfeit seizures, the world over:

WHO indicated that in 2005-06 the volume of counterfeit drug seizures included 2.7 million articles and the main countries where these articles originated from, were reported as follows:

• India: 31%
• UAE: 31%
• China: 20%

Conclusion:

We have, therefore, enough data to establish that counterfeit drugs are posing a growing menace to the humanity. All stakeholders should join hands to address this public health issue, leaving aside petty commercial interests, be it generic pharmaceutical companies or research based pharmaceutical companies, across the world and India is no exception. Otherwise, thugs and criminals who are running to their banks, more often than ever before, with sacks full of money from this illicit trade, at the cost of the innocent patients, will keep going almost scot free, forever.

By Tapan Ray

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

Ensuring ‘health outcomes’ based drugs prescriptions will be more beneficial for the patients in India than just ‘price control’ of drugs

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Currently the global pharmaceutical market is undergoing a metamorphosis. The concept of ‘evidence-based medicine’ is gaining ground in the developed markets of the world, making the pharmaceutical companies generate requisite ‘health outcomes’ data using similar or equivalent products. Cost of incremental value that a product will deliver is of key significance. Some independent organizations like, the National Institute for Health and Clinical Excellence (NICE)in the UK have taken a leading role in this matter.Global pharmaceutical companies using more ‘health outcomes’ data to set pricing strategies:In early 2009, reported agreements between Sanofi-Aventis, Procter & Gamble and Health Alliance as well as Merck and Cigna vindicate this point. These agreements signify a major shift in the global pharmaceutical industry’s approach to gathering and using ‘health outcomes’ data

In the Sanofi-Aventis/Procter & Gamble-Health Alliance agreement, the concerned companies agreed to reimburse health insurance companies expenses incurred for patients suffering from non-spinal bone fracture while undergoing treatment with their drug Actonel.

In the Merck/Cigna agreement, Cigna will have the flexibility to price two diabetes drugs based on ‘health outcomes’ data.

‘Outcomes-based’ pricing strategies are expected to become the order of the day, in not too distant future, all over the world.

The ground realities in India:

Medicines constitute a significant cost component of modern healthcare systems, across the world. In India, overall healthcare system is fundamentally different from many other countries, even China. In most of those countries around 80% of expenses towards healthcare including medicines are reimbursed either by the Governments or through health insurance or similar mechanisms. However, in India situation is just the reverse, about 80% of overall healthcare costs including medicines are private or out of pocket expenses incurred by the individuals/families.

Since 1970, the Government of India (GoI) has been adopting various regulatory measures like cost based price control and price monitoring to make medicines affordable to the common man. For those products, which are patented in India, it has now been reported that GoI is mulling the approach of price negotiation with the respective companies.

However, we should keep in mind that making drugs just affordable in India, where about 65% of population does not have access to modern medicines, is indeed not a core determinant of either healthcare value or proven health outcomes or both.

Cost-effective ‘health outcomes’ based doctors’ prescriptions are more important:

Spending on medicines can be considered as an investment made by the patients to improve their health. To maximize benefits from such spending will require avoidance of products, which will not be effective and the use of lowest cost option with comparable ‘health outcomes’.

For this reason many countries have started engaging the regulatory authorities to come out with head to head clinical comparison of similar or equivalent drugs keeping ultimate ‘health outcomes’ of patients in mind. A day may come in India when the regulatory authorities will also concentrate on ‘outcomes-based’ pricing. However, in Indian context these appear to be very early days.

Till then…

1. Get Standard Treatment Guidelines (STG) prepared for the diseases more prevalent in India, based on, among other data, ‘health outcomes’ studies.

2. Put the STG in place for all government establishments and private hospitals to start with.

3. Gradually extend STG in private medical practices.

4. Make implementation of STG a regulatory requirement.

Thus we need to discuss first what these STGs are.

Standard Treatment Guidelines (STG):

STG is usually defined as a systematically developed statement designed to assist practitioners and patients in making decisions about appropriate cost-effective treatment for specific disease areas.

For each disease area, the treatment should include “the name, dosage form, strength, average dose (paediatric and adult), number of doses per day, and number of days of treatment.” STG also includes specific referral criteria from a lower to a higher level of the diagnostic and treatment requirements.

For a developing country like India formulation of STGs will ensure cost-effective healthcare benefits to a vast majority of population.

In India STGs have already been developed for some diseases by the experts in those areas. These are based on review of current published scientific evidence towards acceptable way forward in diagnosis, management and prevention of various disease conditions

STGs, therefore will provide:

- Standardized guidance to practitioners.
- Cost-effective ‘health outcomes’ based services.

GoI should encourage the medical professionals/institutions to lay more emphasis and refer to such ‘heath-outcomes’ based evidences while prescribing medicines. This will ensure more cost effective ‘health outcomes’ for their patients.

Conclusions:

Such an approach for drug usage will help both the doctors and the patients, significantly, to contain the cost of treatment in general and the cost of medicines in particular. Encouraging and implementing ‘health outcomes’ based medicines prescription in India will require, above all, a change in the mindset of all concerned. The use of an expensive drug with no significant improvement in ‘health outcomes’ should be avoided by the prescribers, initially through self regulation and if required through an appropriate regulation.

By Tapan Ray

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