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

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 Unfortunately, outdated ‘1995 Drug Policy’ is still operational, since last fifteen years.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

By: Tapan J Ray

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

85% of the patented new drugs have therapeutic equivalents…they do not increase the cost of treatment for the common man: Points…Counterpoints

Affordability of patented drugs has become a major controversial and at the same time a very sensitive issue in the healthcare space of India, just as in many other parts of the world. The government, the NGOs and other stakeholders, on the one hand, seem to be quite concerned about it. Innovator companies, on the other hand, also have quite robust arguments in their favor.

Meanwhile, the daily newspaper ‘DNA’ published a report on June 15, 2010 with a headline, “NPPA may cap cancer drug prices via Para 10’.

Let us now try to go through the points and counterpoints of this raging debate.

The basic reasons of concern:

The key points for this concern, I reckon, is based on the following two beliefs:

1. All our citizens should have access to all new drugs
2. All these new drugs are essential to treat most of the related disease conditions

Points in favor of free pricing for patented new drugs:

- Price is a function of the value that a patented new drug will offer to the patients. The price of new drugs will, in addition, include components of the cost incurred by the innovators towards research and development, to offer these products to the patients. This is absolutely essential to ensure continuous investment towards R&D by the innovator companies to meet the unmet needs of the patients.

- It has been reported that currently only 2.3% of the Indian Pharmaceutical Market (IPM) will represent drugs, which have no therapeutic equivalent. This means over 97% of the IPM constitutes of medicines, which have one or more therapeutic equivalents.

- So far as the patented products are concerned, over 85% of all those will have therapeutic alternatives. Empirical evidence suggests that just around 15% of the patented molecules have significant therapeutic advantages over existing drugs and cannot be replaced.

- Beta-lactam, Cephalosporin and Quinolone group of antibiotics are still relevant today and will remain for many more years. So are the likes of Beta Blockers, Calcium antagonists, Ace inhibitors, Proton Pump inhibitors and Statins.

- Therefore, all patients with any common disease profile will have adequate and a good number of cheaper treatment options with the generic drugs. As all new drugs are not essential to treat all related disease conditions, generic and patented medicines should co-exist to cater to the healthcare needs of patients of all income groups. Those who can afford to pay extra for the incremental value of such patented drugs should also have an option.

The Counter points:

- The opponents of the above argument raise the counter question, “if 85% of the patented drugs will have appropriate therapeutic equivalents, why then the pharmaceutical companies spend such a huge amount of money and other resources towards R&D to invent molecules, which do not add significant and substantial value to the existing ones to treat patients? Rationalization of such avoidable R&D expenditures will help reducing the price of even path-breaking patented molecules for the treatment of many disease conditions of the ailing patients”

- In this context ‘Australian Prescriber (2004; 27:136-7)’ commented:

“The patent system, which assumes that investment in the development of new drugs, is so important that the principles of the free market should be abrogated to reward pharmaceutical companies with a legally enforced period of protection from competition”.

- NGOs with a differing view point ask, “Many patented products are still not available in India, does the medical profession in the country find themselves seriously handicapped for not having access to these drugs?’

- This group puts forth the counter argument, “patent protection is based on the fundamental belief that for continuing investment to invent newer drugs, innovations must be adequately rewarded through appropriate protection of the patents. Thus patent protection should only be given to those innovations for which no therapeutic equivalents are available.”


A die-hard protagonist for fostering innovation commented, though the exclusivity for a patented drug given to an innovator would last for 20 years, the real commercial benefits will be available for just around 10 years, that too after spending a fortune towards R&D. Whereas, post patent expiry, the commercial benefits to the generic manufacturers (virtually spending nothing towards R&D) for the same molecule will last in perpetuity…for the patients’ sake!

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.

Indian Patent offices (IPOs) have started showing improvement in their functioning; still lot of grounds to cover.

Indian Patent offices are located, with four clearly specified jurisdictions, at New Delhi, Mumbai, Kolkata and Chennai.

Since last few years enough efforts have been made towards overall capacity building initiatives, training of personnel and digitalizing the huge databank of these offices, with wide scale application of information technology (IT). As a result the patent offices are now having almost a centralized database to provide online services to the users in various areas of their operations. Users are now having the facilities of not only online patent search, but also for online patent applications.

More extensive IT applications are required to achieve greater system efficiency and transparency:

However, to bring in more efficiency and transparency in the system, there is a need to introduce appropriate IT applications in all the transactional interfaces between the patent office personnel and the patent applicants.

Still there are lots of grounds to cover:

Following are the key areas which should be taken care of by the Controller General of Patents, Design and Trade marks (CGPDTM) to make the IPOs more efficient, transparent and effective:

1. The Patent Manual, which provides essential guidelines to the patent examiners to bring in uniformity in the patent application examination process, is long overdue.

2. Many patent applicants feel that there is a need to include the International Non-proprietary Names (INN) in the title of pharmaceutical patent applications by the IPO.

3. Inadequate bandwidth makes the IT system slow, reducing its operational efficiency.

4. Electronic-filing of patent applications has been introduced, but there is no facility of paying the fees online by credit card. This facility should be introduced to make it more convenient for applicants to file patent applications online, adding more speed to the process.

5. Electronic prosecution of patent applications should be introduced to make the patent prosecution virtually paperless and more efficient.

6. Despite new technological measures most patent officers and also the public in general are still following the traditional method of filing the patent applications due to the ease and authenticity of filing records. To encourage applicants to file applications electronically, incentives such as reduced fees may be offered to those who file their applications electronically.

7. The IPOs should digitize all the physical files lying with them, so that file histories of each application are available online.

8. The Patent offices should have designated centres to provide assistance to applicants for filing or prosecuting applications.

9. Clear guidelines to be issued for conducting pre-grant and post grant opposition proceedings. Presently they are being handled in an arbitrary manner.

10. In order to introduce an efficient system of patent prosecution, it is recommended that the IPOs adjust patent term to compensate patentees for any delay in the grant of the patent that reduces the term of the patent, when such delay is caused solely by the IPOs.

11. Decision making and its communication to all concerned to be made faster at the IPOs. A system to be instituted for issuing the operative part of the decision first, followed by details of the decision taken. These should be advertised immediately in the technical journal to close proceedings at the earliest. Delays are leading to increase in the waiting period for the grant of patents, even if the proceedings have been concluded (opposition or otherwise) attracting serial and frivolous pre-grant oppositions. Such delays are also preventing the patent applicants to get their grants. As a result they are unable to initiate infringement proceedings against infringers quickly, defeating the very purpose of the patent system.

12. The timeline for an application, which will be taken up for examination, needs to be clearly defined. Currently, there is no time-line defined for taking up the applications for examination.


All concerned will feel happy, if the DIPP in general and the CGPDTM in particular take note of these suggestions and formalize a process within the IPOs to address these important issues.

Growing discontentment of the past, in several areas of operation within the IPOs, is now being effectively addressed. However, the system still warrants more capacity building to enable the IPOs provide world class services to the patent applicants. This process needs to be expedited to further enhance the credibility of the new IPR regime in India.

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.

65% of Indians do not have access to affordable modern medical treatment – why?

India is indeed a country of many paradoxes. Not just peaceful co-existence of luxurious sky scrapers and dilapidated shanties side by side. In the healthcare sector as well, we witness on one side booming medical tourism of foreign nationals to get various types of ailments treated with the best possible medical amenities, just when on the other side common diseases like, malaria and tuberculosis are taking the common man on a rampage. Is India, therefore, ignoring the crying need to strike a balance between extending cost competitive healthcare benefits to the ‘haves’ of the world without neglecting the domestic ‘have nots’?Another paradox, when India caters significantly to the growing needs of the world for low cost generic medicines, 65% of Indian population cannot afford the same and do not have access even to a doctor.In a situation like this, what sort of equitable distribution of healthcare benefits are we then talking about? Isolated attempts of opening low cost generic medicine shops, enforcing rigorous non-transparent price control, attempt to divert the debate on the price of patented medicines which contribute miniscule decimal points on the total pharma market in India, can at best be termed as populist measures, instead of trying to look at the macro picture to address the pressing healthcare issues of the country.

When we talk about affordability, why do we not talk about affordability of medical treatment as a whole and not just affordability of medicine, for one or many ailments that the common man suffers from? Will our government try to address this bigger issue in a holistic way?

What could possibly be the reasons for such inaction? Is it because improper co-ordination, if not lack of co-ordination, between various Government departments, the ultimate victim of which is the common man?

Such a situation reminds me of an old story of three blind men and an elephant. After touching the trunk of the elephant, one blind man describes the elephant as a large Python, touching a leg of the elephant, the other blind man describes it as a pillar. The third blind man while touching the body of the elephant describes it as a strong wall. Unfortunately no one could describe the elephant as it really is and no one in this particular case was helping them to do so, either.

Could it be that various departments of our Governments are acting like these blind men and are not seeing the big picture – the elephant of the above story? It appears that the Pharmaceutical department of the Ministry of Chemicals and Fertilizers believes that only the price of medicines is the key issue for an ailing patient while going for a medical treatment and not the cost of total treatment. Thus, they seem to be working full time to drive down only the price of medicines.

The Ministry of Health is also trying to do a little bit of something in some not so known areas. The Ministry possibly believes that they are effectively helping everybody to address the pressing healthcare issues. It does not so appear that the Ministry realizes that majority of our population does not have access to affordable modern treatment for the ailments that they are suffering from. Number of doctors, nurses, hospital beds etc. per 1000 of Indian population is still abysmally low even compared to some developing nations. Cost of getting a disease diagnosed even before any medicine is prescribed is sky rocketing, at a break neck speed. Which Government department is trying to address the cost of disease burden and trying to alleviate it for all of us, in a holistic way?

Here comes another paradox. While the Pharmaceutical Department intends to bring down the price to make the drug affordable, the Finance Ministry keeps the transaction cost of medicines at a high level by levying various taxes to improve its revenue collection, ultimately making the same medicine less affordable.

In the developed nations and also in many emerging markets healthcare financing or health insurance for all strata of the society is being successfully implemented to address the key issue of improving access to affordable modern treatment to a vast majority of the population. Even after 61 years of independence we have not been able to address this critical healthcare financing issue effectively.

Piece meal approach of our Government has not succeeded much to address this important issue of the country. Taking one-off populist measures of various types and creating media hype may not help sorting out this issue, at all.

The way forward, very broadly speaking, is to bring the entire healthcare policy making and implementation functions under one ministry. If that is not possible, the concerned ministries should work in unison, with effective procedural interfaces being put in place for proper co-ordination with a clear goal of improving access to affordable modern treatment to all.

Is it not a shame on us that even today, 65% of Indian population does not have access to affordable modern medical treatment?

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.