Tag Archives: 2017

MDGs Break Ground For SDGs: Is India Poised To Achieve The Health Goals?

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The Millennium Development Goals (MDGs) were placed in the pages of history amid several other remarkable global initiatives of the United Nations (UN), as the timeframe for achievement of these targets got over in 2015.

In 2000, the leaders of 189 countries signed this historic millennium declaration at the United Nations Millennium Summit for improving the lives of the world’s poorest people. Eight MDGs, were agreed upon by its members, each one supported by 21 specific, measurable targets and more than 60 indicators with clear deadlines, as a concerted global movement in this direction. The eight goals spanned across the areas of poverty alleviation, providing universal primary education, ensuring gender equality, preventing child mortality, meeting maternal health needs, protecting the environment and entering various global partnerships, with a target achievement date of 2015.

Did the glass remain ‘half-full’ or ‘half-empty’?

At the end of 2015 the UN reportedly called the MDGs ‘the most successful anti-poverty movement in history’. However, it could probably be a matter of looking at this glass either as ‘half-full’ or ‘half-empty’.

An interesting article published in the international daily ‘The Guardian’ on July 06, 2015, highlighted some hits and misses of MDGs from the global perspective.

Globally, several goals of the MDGs have not been made for various reasons. Focusing on health-related areas, I find, though the child mortality rate has reduced by more than half over the past two and a half decades from 90 to 43 deaths per 1,000 live births, its MDG target of an expected decline by two thirds could not be achieved.  Similarly, the global maternal mortality ratio despite falling by nearly half, was far short of its aim of a two-thirds reduction. Likewise, despite the reduction of the number of new HIV infections by around 40 percent between 2000 and 2013, its MDG goal of halting and beginning to reverse the spread of HIV/Aids by 2015 has not been met.

The overall status in India:

According to the United Nations in India, in the above focus areas, the country has made some progress in reducing its under-five mortality rate, which declined from 125 per 1,000 live births in 1990 to 49 per 1,000 live births in 2013; maternal mortality rate also declined from 437 per 100,000 live births in 1990-91 to 167 in 2009.

India recorded significant progress in reducing the prevalence of HIV and AIDS across different types of high-risk categories, with adult prevalence reducing from 0.45 percent in 2002 to 0.27 percent in 2011. However, a quarter of global TB cases still occur in India with nearly 2.2 million people are diagnosed with the disease annually, and an estimated 220,000 die as a result.

MDGs and India’s achievements:

Coming now to target versus achievements, the Millennium Development Goals India Country Report 2015 released by the Ministry of Statistics & Program Implementation (MoSPI) in February 2015, states that India had put considerable emphasis on all the MDGs with significant progress. Although the nation could meet targets of some of these well ahead of the 2015 deadline, overall, only six of the 18 targets adopted as part of the eight goals in 2000 have been fully met. However, according to another report brought out by the U.N. Economic and Social Commission for Asia and the Pacific, India has met only four of the eight MDGs.

As per Sample Registration System 2013, though the overall reduction of Under 5 Child Mortality Rate (U5MR) was nearly 60 percent happened during 1990 to 2013, India had missed this target.

Similar were the performances for a reduction in the Infant Mortality Rate (IMR) and the proportion of one year old children immunized against measles and improving the Maternal Morality Ratio (MMR). However, the prevalence of HIV among pregnant women aged 15-24 years showed a declining trend and incidence of Malaria also came down. Thus, it appears that the progress made and the achievements recorded in India against MDG targets are indeed a mixed bag.

The same question, therefore, logically follows for India too: Has the glass become ‘half-full’, or remained half-empty post MDG efforts?

MDGs break ground for ‘Sustainable Development Goals (SDGs)’:

The MDGs comprising of eight goals to eradicate extreme poverty, were indeed a laudable concerted global initiative of the United Nations. It could reportedly bring over a billion people out of extreme poverty. According to ‘United Nations (2015): The Millennium Development Goals Report’, during the period of 1990 to 2015, extreme poverty fell in developing countries from 47 to 14 percent. Similarly, the proportion of undernourished people fell by almost half, with almost similar decline in the child and maternal mortality rate. Nevertheless, communicable diseases, gender/income inequalities and striking disparities between rural and urban areas continued to persist with the world’s poor remaining overwhelmingly concentrated in several areas.

Thus, learning valuable lessons and significantly benefitting from them, MDGs broke ground for the next logical global initiative in this genre. As the time-frame for implementation of MDGs got over in 2015, the global leaders on the same platform of the United Nations followed it through with the newly developed ‘Sustainable Development Goals (SDGs)’ in the same year.

While aiming to make the outcomes of the new drive more sustainable with a focus on the environmental goals, SDGs did not altogether jettison some of the unfinished agenda of MDGs – mainly for continuity. Unlike MDGs, SDGs are targeted primarily to the developing, least developed and poorest countries. Nevertheless, all member countries of the UN require participating, fund and actively contribute in achieving SDGs targets, no matter how developed they are.

While MDGs had only 8 goals, 21 targets and 63 indicators, SDGs are a set of 17 goals and 169 targets that all 193 UN Member States, including India have committed to achieve between 2016 and 2030. Importantly, though MDG targets were adopted in 2002 and got over in 2015, its effective time span for achievement was of 25 years, as the baseline data used were for the year 1990 with some subsequent revisions. Whereas the baseline for SDGs starts from 2015 estimates, which may be revised to actual figures as and when these are made available.

Health goals in SDG:

Health has a central place in SDG 3 to ‘ensure healthy lives and promote well-being for all, of all ages’. Briefly speaking, it commits itself to a global effort to eradicate epidemics of both communicable and non-communicable disease and strengthen health systems’ capacity, ensuring Universal Health Coverage (UHC), along with making medicines and vaccines affordable to all. In addition, SDG 3 clearly focuses on mental health issues with suicide being the second leading cause of death globally between the ages of 19 to 25. It also aims at reducing the numbers of deaths and illnesses caused by air, water, and soil pollution and contamination, significantly.

Towards further enhancing public policy efforts, SDG 3 emphasizes on strengthening the implementation of the WHO Framework Convention on Tobacco Control; supporting the research and development of vaccines and medicines; substantially increasing health financing; the recruitment, development, training, and retention of the health workforce; and strengthen early warning, risk reduction, and management of health risks. Besides, a few targets falling under other different goals are also linked to the health goal of SDG 3, in various ways.

SDG 3 targets:

According to the ‘Resolution adopted by the General Assembly on 25 September 2015’ on ‘Transforming our world: the 2030 Agenda for Sustainable Development’, SDG 3 lays down nine key targets, as follows, though a few of which overlap with the MDGs:

  • Reduce the global maternal mortality ratio to below 70/100,000.
  • Reduce neonatal mortality to below 12/1,000 and U5MR to below 25/1,000.
  • End the epidemics of AIDS, tuberculosis, malaria, and neglected tropical diseases and combat hepatitis, waterborne diseases, and other communicable diseases.
  • Reduce by one-third premature mortality from non-communicable diseases.
  • Strengthen the prevention and treatment of substance abuse.
  • Halve the number of global deaths and injuries from road traffic accidents (by 2020).
  • Ensure universal access to sexual and reproductive health care services.
  • Achieve universal health coverage.
  • Reduce the number of deaths and illnesses from hazardous chemicals and air, water, and soil pollution and contamination.

Is India poised for it now?

This is indeed a critical question. I guess, no one can just yet vouch, with a great degree of certainty, what exactly would India ultimately achieve against the SDG 3 targets. That said, I reckon, India has now all its success ingredients in place. Let me deliberate on just a few broad but very important ones out of all those, as hereunder:

  • With the announcement of the National Health Policy 2017 (NHP 2017) and commitment to the same by none other than Prime Minister Modi himself, focusing on public health has now been recognized as one of the critical ingredients for the future economic prosperity of India. Hence, there is a fair chance now that the nation’s public health expenditure as a percentage of GDP would be gradually raised from around 1.2 percent to 2.5 percent – expectedly by 2020, bringing health in the core development agenda of both the Central and the State Governments.
  • The unfinished task of achieving MDGs needs to be completed faster, driven by its ongoing momentum. The national and the respective States-specific goals, along with a clear roadmap to achieve the targets within the specified time-frame, outlining the success indicators for each deliverable, assigning accountability to designated individuals with a periodic review system for the same, needs to be put in place, soon, actively encouraged by the current national development oriented Union Government, if not initiated already.
  • The process of implementation of the Universal Health Coverage (UHC), as enunciated in the NHP 2017 should be hastened. This is necessary to bring the entire population, without any discrimination whatsoever, as the beneficiary of this movement.
  • Scaling up the capacity building process at a much faster pace for the entire public health infrastructure and service delivery systems, along with skill development programs need to be placed at the center stage of the public health agenda of India, to bring SDG 3 to fruition.
  • Strategic involvement of private players and the credible NGOs to achieve SDG 3 targets would help move faster to ultimately experience the sense of a great public health related achievement for all concerned within, and probably outside the country, as well.

In conclusion:

As MDGs break ground for SDGs, India seems to me quite poised to achieving its health goals.

Moving towards this direction will invite a sharp focus on addressing the  non-communicable diseases, as well, while accelerating the ongoing efforts on maternal and child health, and nutrition.

It goes without saying that meeting SDG 3 targets will require adequate public investments for health, besides a well-crafted and time-bound public health policy, charting a clear roadmap for the same. The current Union Government now appears to have committed to both, putting its National Health Policy 2017 in place.

Once these goals are attained, it will enable India to clearly ‘Ensure healthy lives and promote well-being for all, at all ages’. In that process, a new India will be created where all essential public health related needs and demands of all, irrespective of their socioeconomic status, will be expeditiously taken care of, delivering with precision high quality of products and services.

Hopefully, the transformed India would then demonstrate to the world, as someone had said before, it’s just not a matter of ‘more money for health, but also more health for money’.

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.

National Health Policy 2017: Some Silver Linings, Some Trepidation

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In September 2016, the Supreme Court directed the Indian Government to finalize the ‘National Health Policy (NHP)’ guaranteeing ‘assured health services to all’, a draft version of which was already made available to the public on December 30, 2014.

In its order the Apex Court had said: “In case the Union of India thinks it worthwhile to have a National Health Policy, it should take steps to announce it at the earliest and keep issues of gender equity in mind.”

After a wait of over two years, on March 16, 2017, the Union Cabinet approved the final version of the National Health Policy 2017 (NHP 2017) for implementation. The tough socioeconomic distress of the general population related to health care, fueled by near collapsing public health care delivery system when private health care providers are becoming more and more expensive, prompted the current Government to initiate drafting yet another new ‘Health Policy’, with a gap of around 15 years.

NHP 2017 covers a gamut of subjects while articulating its primary aim, which is to inform, clarify, strengthen and prioritize the role of the Government in shaping health systems in all its dimensions. These are investments in health, organization of health care services, prevention of diseases and promotion of good health through cross sectoral actions, access to technologies, developing human resources, encouraging medical pluralism, building a knowledge base, developing better financial protection strategies, strengthening regulation and health assurance.

In this article, primarily for greater clarity in understanding by the readers, I shall start with the reasons of my trepidation and then focus on the silver linings of the NHP 2017.

Some trepidation:

While explaining the reasons for my trepidation, I shall go back to what I said even before. Over several decades, many of us have tried to ferret out the reasons of giving low national priority to provide access to reasonably affordable, quality public health care to all its citizens by the successive Governments in India but in vain. The quest to know its rationale becomes more intense, as we get to know, even some developing countries in Asia, Africa and Middle East are taking rapid strides to catch up with the health care standards of the developed countries of the world.

In the last few years, many such countries, such as, Thailand, Turkey, Rwanda and Ghana, besides China, have successfully ensured access to quality and affordable health care to their citizens through well-structured national initiatives. The Governments of economically poorer countries, such as, Sri Lanka and Bangladesh too are making rapid progress in this direction, protecting the most vulnerable populations in their respective countries from getting sucked into extreme poverty.

In this context, it will be worthwhile recapping that the NHP 1983, which was revised in 2002, also recommended an increase in public health expenditure to 2.0 percent of GDP in 2010. Not too long ago, in October 2010, the then Government in power constituted a ‘High Level Expert Group (HLEG)’ on Universal Health Coverage (UHC) under the chairmanship of the well-known international medical expert Prof. K. Srinath Reddy. The HLEG was mandated to develop a framework for providing easily accessible and affordable health care to all Indians. The HLEG Report defined UHC as follows:

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

That said, the reality is, even in the Union budget for 2017-18, the public spending on health keeps hovering around abysmal 1 percent of the GDP. The Union Budget Allocations for several critical health related programs have either remained just around the same as before, or have declined, in real terms. Almost similar trend is noticed in the States, as well. For example, according to the latest Maharashtra State Budget for 2017-18, the State has decided to spend much less on its medical and public health sector schemes in the forthcoming financial year.

Thus, leaving aside implementation of the most critical 1983 NHP goal of providing “Health for all by the year 2000 A.D”, even in 2017 India continues to grapple with the same sets of challenges for ensuring adequate availability, accessibility, affordability, and high quality of comprehensive health care for all.

Some silver linings:

Let bygones be bygones. Let me now focus on the silver linings of the NHP 2017.

Besides gradually raising public expenditure for health care from the current around 1.2 percent to 2.5 percent of GDP, following are examples of some silver linings as I see enshrined in several key objectives of the new health policy, besides several others:

  • Progressively achieve Universal Health Coverage: Assuring availability of free, comprehensive primary health care services; ensuring improved access and affordability, of quality secondary and tertiary care services through a combination of public hospitals and the strategic purchasing of services in health care deficit areas, from private care providers, especially the not-for profit providers; achieving a significant reduction in out of pocket expenditure due to health care costs with reduction in proportion of households experiencing catastrophic health expenditures and consequent impoverishment.
  • Reinforcing trust in Public Health Care System: Strengthening the trust of the common man in the public health care system by making it predictable, efficient, patient centric, affordable and effective, with a comprehensive package of services and products that meet immediate health care needs of most people.
  • Align the growth of the private health care sector with public health goals: Influence the operation and growth of the private health care sector and medical technologies to ensure alignment with public health goals.
  • Achieve specific quantitative goals and objectives: These are outlined under three broad components viz. (a) health status and program impact, (b) health systems’ performance and (c) health system strengthening. These goals and objectives are aligned to achieve sustainable development in the health sector in keeping with the policy thrust.

I was encouraged to note a few more silver linings, especially the following ones, from various different areas of the NHP 2017, which:

  • Intends to achieve the highest possible level of good health and well-being, through a preventive and promotive health care orientation, besides its emphasis on allocating up to two-thirds or more of resources to primary care followed by secondary and tertiary care.
  • Plans creation of Public Health Management Cadre in all States to optimize health outcomes and National Health Care Standards Organization to maintain adequate standards in public and private sector.
  • Advocates extensive use of digital tools for improving the efficiency and outcome of the health care system by creating a National Digital Health Authority (NDHA) to regulate, develop and deploy digital health covering the entire process of health care, besides encouraging the application of the ‘Health Card’ for access to a primary health care facility and services anytime, anywhere.
  • States that Health Technology Assessment (HTA) is an important tool to ensure that technology choice is not only participatory, but also guided by considerations of scientific evidence, safety, cost effectiveness, social values; and commits to the development of an institutional framework and required capacity for HTA’s quick adoption.
  • Assures timely revision of the National List of Essential Medicines along with the appropriate price control.
  • Promotes compliance to right of patients to access information on condition and treatment.

The high and low points in NHP 2017:

As I see it, following are - just one each - the most critical high and low points in NHP 2017:

A high point:

NHP 2017 making a categorical promise to increase public health spending to 2.5 percent of GDP in a time-bound manner, guaranteeing Universal Health Care (UHC), is indeed not just encouraging, but also a high point in its silver linings. This is because, without adequate Government spending in this area, it’s just not possible to give shape to UHC, however robust a national health policy is on paper.

A low point:

The draft version of the NHP 2017 had proposed making health a fundamental right for Indian citizens – quite like denial of health is an offence, and reiterated on enactment of this law as follows:

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

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

Thus, one of the lowest points or most disappointing aspects of the NHP 2017, as compared to its draft version, is the absence of the intent of having a National Health Rights Act. This change makes UHC yet another promise, just as before, without any strong legal backing. As many experts believe, when legal rights and mechanisms institutionalize collaborative goals, methods, and service delivery, they create legally binding duties. Government agencies, patient advocates, and the public can invoke such laws to urge collaboration and seek required public health care services, as promised, always.

The reason behind general expectations for the National Health Rights Act, is mainly because previous National Health Policies also assured ‘health for all’ within a given time-frame. The same promise was also carried through by various successive Governments in the past, but did not come to fruition. Nothing has changed significantly on the ground related to public health care, not just yet. Hence, exclusion of the proposed section of this Act in the final version of the NHP 2017 is a low point for me.

The trepidation lingers. Will it be or won’t it be, yet another repetition of the Government promises made through NHPs or otherwise, is the moot question now.

In conclusion:

Specific time frame for achieving most of these policy objectives and intents are still awaited.

Nonetheless, while a robust health policy for a new India, and a commensurate increase in Government spending on public health is much warranted, building a well integrate, comprehensive and accountable health infrastructure that will be sensitive to public health care needs of the country, should assume top priority today.

There exists an 83 percent shortage of specialist medical professionals in the Community Health Centers (CHCs) of India, according to the Rural Health Statistics 2015 released by the Ministry of Health & Family Welfare, which was reported by IndiaSpend on September 21, 2015. Again, on February 27, 2016, quoting similar Government Data, IndiaSpend reported that public-health centers across India’s rural areas – 25,308 in 29 states and seven union territories – are short of more than 3,000 doctors, the scarcity rose by 200 percent (or tripling) over 10 years.

Other sets of similar data on the grossly inadequate number of doctors, nurses, paramedics and hospital beds per thousand population in India, coupled with frugal rapid transportation facilities in the vast and remote areas of the country, send a clear signal that capacity building in these areas can’t wait any longer. It has been always essential, but did not feature in the ‘to-do’ list of the Government, until now. In that sense, silver linings in the NHP 2017 open the door of great expectations, especially for UHC, despite some trepidation.

Reasonably well-crafted and robust NHP 2017, needs to be integrated with similar initiatives of the States, soon. Effective implementation of a comprehensive, well-integrated and time-bound health care strategic plan, with requisite budgetary allocations having a periodic review process and assigning specific accountabilities to individuals, are the needs of the hour. Otherwise, the social and economic consequences of the status quo in the health care space of India, would impede the sustainable growth of the nation, seriously.

To progress in this direction, the prevailing status-quo must be disrupted, now – decisively and with a great sense of urgency. It is imperative for the Government to make each one of us not only to believe it, but also experience the same in our everyday life. It is important for all concerned to remember what none other than Prime Minister Modi tweeted on March 16, 2017: “National Health Policy marks a historic moment in our endeavor to create a healthy India where everyone has access to quality health care.”

The National Health Policy 2017 is in place now, this is the time to walk the talk!

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.

Dwindling Drug Innovation: Declining Image: Unchanged Business And Advocacy Models

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A report of ‘The United States International Trade Commission (USITC)’ released on December 22, 2014 suggested, if tariffs and investment restrictions were fully eliminated, and standards of IP protection were made comparable to the U.S and Western European levels, American exports to India would rise by two-thirds.

A year later, on February 01, 2015 an interesting news article highlighted that the flashpoint of this issue “has clearly been pharmaceutical companies and their lobby group Pharmaceutical Research and Manufacturers of America (PhRMA), which have made some of the strongest representations to the US government against India’s IPR regime.” The same report also indicated that many other companies including the aircraft maker Boeing and the generic drug giant Abbott felt that India offered adequate IP protection and that they had not experienced major IP problems in the country.

The above stance of USITC continued echoing right from the beginning of this year. In January 2017, the CEO of US Biotechnology Innovation Organization (BIO) reportedly told our Prime Minister Narendra Modi, ‘if he follows western practices on intellectual property protection, his country would see a “tidal wave” of biotech industry investment.’

On February 08, 2017, when the fifth edition of ‘U.S. Chamber International IP Index’ report was released by the ‘Global Intellectual Property Center (GIPC)’, India featured in the 43rd rank out of 45 countries. With this India remained virtually at the bottom of the IP index for the fourth year on the trot. The GIPC report underscored India’s “anaemic IPR policy”, Section 3.d of the Indian Patents Act, besides several others, as major market access barriers.

On February 14, 2017, another news article reported that America’s pharma sector has asked the US Trade Representative (USTR) to continue to keep India on its Priority Watch List (PWL), which includes countries that are alleged violators of US patent laws, claiming that the environment on the ground remains ‘challenging’ in India. Among the areas of concern for the US pharma companies operating in India, unpredictable IP environment, high tariffs and taxes on medicines, regulatory data protection failure, discriminatory and non-transparent market access policies and unpredictable environment for clinical research were listed among others.

With this backdrop, the key question that haunts many industry watchers, when the World Trade Organization (WTO) has no complaint with the Indian Patents Act 2005, and finds it TRIPS compliant, why are these reports coming from the United States consistently emphasizing that the current IP regime of the country is a key barrier to market access, especially for research-based pharma companies?

Is the core issue of the global pharma industry in India is predominantly not encouraging innovation well enough, or the dearth of inadequate Intellectual Property (IP) protection – or it is something beyond that, and is more fundamental in nature. In this article, I shall dwell in this area, first in the global perspective, and then zeroing-in to India.

A global perspective:

“The past 60 years have seen huge advances in many of the scientific, technological and managerial factors that should tend to raise the efficiency of commercial drug research and development (R&D). Yet the number of new drugs approved per billion US dollars spent on R&D has halved roughly every 9 years since 1950, falling around 80-fold in inflation-adjusted terms.  There have been many proposed solutions to the problem of declining R&D efficiency. However, their apparent lack of impact so far and the contrast between improving inputs and declining output in terms of the number of new drugs make it sensible to ask whether the underlying problems have been correctly diagnosed,” articulated an important article published on March 01, 2012 in the Nature Reviews Drug Discovery.

This trend continues, virtually unchanged. R&D efficiency continues to remain a cause of great concern to the research-based global pharmaceutical companies. Accordingly, a 2016 report of the Deloitte Center for Health Solutions titled, ‘Measuring the return of pharmaceutical innovation’, among other findings, has captured the following:

  • Annual projected pharma R&D return declines to 3.7 percent from 10.1 percent in 2010
  • Peak sales per asset fall 11.4 percent year-on-year since 2010

What then is its basic solution?

When the right solution eludes:             

In this scenario, when the right solution is still eluding, to record growth in corporate profit and earning to meet shareholders’ expectations, keeping the existing business model intact, the global research-based pharma companies have the following two limited options, which they are actively pursuing:

  • Take high price increases for the existing products
  • Launch the limited new products at a very high price

A report published in The First Word Pharma on October 06, 2015 quoting The Wall Street Journal (WSJ) vindicated exercising the first option. It reported that many drug makers have succeeded in increasing revenue on products despite a flat or declining demand by consistently increasing prices. An analysis revealed that revenue for the top 30 products in the United States zoomed by 61 percent over the past five years, three times the increase in the number of prescriptions sold over that period. While another report by Credit Suisse illustrated that 80 percent of the growth in net profit for the top 20 drug makers was attributable to price hikes.

To substantiate application of the second option, I quote from the CBS News, which on April 05, 2016 reported that an investigation into the cost of prescription drugs revealed huge price hikes over the past five years. Several brand name medications more than doubled in price. Again, on  August 24, 2016, it gave a sense of this trend with the following examples, covering the launch price of innovative drug, and price increases of generic drugs:

  • Gilead fixed their new hepatitis C drug Sovaldi’s cost at US$ 900 – 1,000 per pill
  • Mylan Pharmaceuticals’ increased the cost of its anti-allergic drug EpiPen from about US$ 57 in 2007 to more than US$ 500 in 2016
  • Turing Pharmaceuticals increased the price of the anti-malaria drug Daraprim by 5,000 percent last year, charging US$ 750 per pill for a drug that used to cost US$ 13.50 per pill.

PhRMA – the often quoted trade association in America, representing the country’s leading pharma and bio-pharmaceutical research-based companies, reportedly said in a statement: “Focusing solely on the list prices of medicines is misleading because it ignores the significant discounts and rebates negotiated by insurers and pharmacy benefit managers.”

Even if, this argument is accepted as such, the tough impact of regular hefty drug price increases on the consumers is real, unquestionably.

The current business model leaves behind many patients:

The ‘Access to Medicine Index 2016’ report also finds that companies generally do not systematically target populations with the highest needs in their registration, pricing and licensing actions. Although, we continue to make progress toward major public health goals, such as, polio is close to being eradicated, as is guinea worm; more than 45 percent of people living with HIV/AIDS have access to ARVs; important vaccines for malaria and dengue fever are being implemented, still business models for providing healthcare are leaving many people behind. Globally, two billion people cannot access the medicines they need, most of whom live hand to mouth.

Particularly, the big global pharma companies, as the innovators and producers of life-saving medicines, need to act much earlier in the patients’ value chain. Without or inadequate action by these companies, alongside governments, NGOs and others, it will be impossible to bring modern medicine to everyone.

Public outrage over high drug prices:

Many studies indicate that the research-based global pharma and biotech companies, still strive hard to stick to their existing overall business models with a sharp focus on improving both the top and bottom lines of the business, though the R&D projects are becoming lesser and lesser productive. This prompts them resorting to hefty price increases, and introducing new products with high price. Fueled by this self-serving mindset, a simmering public outrage, globally, over high drug prices is fast catching up, further undermining the trust in the industry, as another report says.

No wonder why in the Gallup Poll of August 15, 2016, pharmaceutical industry featured just one above the bottom among the ‘Worst-Rated U.S. Business Sectors’. Moreover, even the Harris Poll released on January 17, 2017 found that 91 percent of U.S. consumers believe pharmaceutical and biotechnology companies put profits over patients.

The industry continues chasing rainbows:

In response to this mounting stakeholders’ criticism, arguably the richest pharma association in the world in its member subscriptions – PhRMA, reportedly launched a new ad campaign costing tens of millions of dollars on January 25, 2017. It aims to highlight innovation and scientific breakthroughs to change the public’s negative perception of the industry. This campaign will span across television, print, digital, and radio, the report elaborates.

Following is an example, as reported, listing three important and interesting comments on this campaign for pharma image revamp from some of those who matter:

  • Lawmaker Peter Welch, who chairs the House Democratic Caucus’ task force on drug pricing, said, “The issue here is not whether drugs have some benefits … The issue is whether pharma is going to be able to kill us with their pricing power or whether we will get transparency and competition.” He added, “The campaign is all about defending their pricing power and pushing their product.”
  • Similarly, another lawmaker Sen. Chuck Grassley (R-Iowa) said, “This is [PhRMA] trying to change the subject and to try and divert people’s attention away from drug pricing. Continuing to ignore drug pricing is probably not going to work.”
  • Ameet Sarpatwari, a drug pricing policy researcher at Harvard University said, “It’s really a matter of being tone deaf in terms of thinking somehow that this is going to change public perception”

Isn’t a great example of chasing rainbows by the industry association, in the number one pharma and biotech market of the world, instead of amending to the root cause of this burning issue?

The situation in India:

In this backdrop, amid a tough global situation, let me assess the related Indian scenario.

The research-based global pharma companies, apparently want to introduce the whole range of their patented products at a high price and in a monopolistic situation in India too, for much higher growth in revenue and profits. Thus, they are consistently pushing hard, with all guns blazing, for major changes in the Indian Patents Act 2005, which would involve jettisoning many patients’ health interest related safeguard conditions enshrined in the Act, such as Section 3.d that restricts ever-greening of patents, and introducing several other tougher IP measures, such as data exclusivity under the garb of imaginary patient safety issues with generic drugs.

They don’t seem to like price control of essential drugs in India, either. While intensely lobbying for it, the lobbyists vehemently argue in favor of the absurd, which is the affordability of medicines does not help to increase drug access to all those who need these most, even when on the ground, the out of pocket expenses for drugs in the country is as high as around 65 percent and universal health care does exist in the country, much to the dismay of many.

It has now been generally established by many global experts, including our own National Pharmaceutical Pricing Authority (NPPA) that market competition does not necessarily bring down drug prices, including for generics, quite unlike many other industries, but various pressure groups, including the media, can catalyze it, and quite effectively. What has happened recently with the cardiac stents price in the country, is just an example.

Is the devil in the traditional pharma business model?

An article titled, “How Pharma Can Fix Its Reputation and Its Business at the Same Time”, published on February 03, 2017 in The Harvard Business Review, emphatically states: “It’s a fact that the current business model of pharma companies is not working efficiently.” It suggests, besides enhancing the current unenviable public image of the industry, expanding access to medicines will help pharma companies enhance shareholder value. The success of a new business model depends on both the willingness and the ability of pharmaceutical companies to fully integrate access to medicine into their business strategies, the article emphasizes.

A July 2015 paper of McKinsey & Company titled, “Pharma’s next challenge”, also reiterates that in the developed economies, market access is chiefly concerned with pricing, and with satisfying local conditions. Whereas, in the emerging markets, to overcome the barriers, pharma players need to shift the focus of their commercial models from marketing and sales to access, and from brand-by-brand access planning to integrated cross-brand planning.

In pursuit of a new model:

Based on the above premises, the search for a new pharma business model, especially for the research-based pharma companies, in my view, may broadly focus on the following areas:

  • Learn from innovation models of the IT industry: Win-Win collaborative innovation models, including ‘Open Source Drug Discovery’, if scaled up, could reduce the cost of innovation significantly and making the new innovative drugs generally affordable. Thus, larger volume sales may adequately offset a voluntary cut in the product margin, creating a multiplier effect.
  • Be a part of the solution and not the problem: Because of fiercely pushing the blatant self-serving agenda, inconveniencing many patients, the core mindset of the pharma industry is considered by many as an integral part of the main problem. While pharma industry, quite rightly, seek more market access, they need to act as a facilitator too, to improve general access to medicines, in various imaginative ways, which is, of course, possible. This will make the pharma industry to be a part of the solution to the national problem, over a period of time.
  • Walk the talk: While pharma industry speaks all right things, in terms of ethical conduct of business, at a time when both national and international media frequently expose their gross wrongdoings. This continues, unabated. Sales and marketing functions are indeed very important, but not at the cost of good corporate governance. I am aware, all compliance rules exist immaculately on paper for many companies, but the senior management officials should demonstrate that they walk the talk, giving exemplary punishment to the wrongdoers, including their peers.
  • Change the current advocacy model: The current advocacy model of the research-based pharma companies is too self-serving. For example, in India it mostly demands, which is bordering obsession, to change the IP laws of a sovereign country, when the World Trade Organization (WTO) has no problem with these, whatsoever. There is a need for them to demonstrate, sans any shade of arrogance, visible respect to any country’s general sentiment on its Patents Act, as it’s their own decision to operate in those countries. An imaginative win-win change in this area, would significantly help to create a strong bond and mutual respect with other important stakeholders.

Are senior citizens in pharma business a barrier to change?

A recent white paper of ‘Eye for Pharma’, says in its conclusion “many of those now running pharma organizations have come through the ‘golden age’ of pharma and so may be reluctant to change”. Does this issue need to be addressed first by the Independent Directors of the respective Boards of the pharma companies?

In conclusion:

Many questions do spring up while addressing this issue. One common belief is that, pharma industry, in general, is reluctant to change its traditional business model, beyond just tweaking, despite declining overall productivity and in its public image.

In advocacy initiatives, while drawing stakeholders’ attention to the core grievance agenda, though they try hard to project their business focus on patients, especially using the buzzwords, such as, ‘patient centric approach’ or ‘patient engagement’, among many others, has anything visibly changed, just yet?

As the business environment is getting tougher and consumer expectations are fast changing, drug innovation is also steadily dwindling, so is the declining industry image. However, pharma business and advocacy models continue to remain mostly unchanged. It remains intriguing, why are the ‘wise guys’ of pharma business still so deeply obsessed with chasing rainbows, with so much of zeal, hectic activity and money, while majority of patients keeps bearing the brunt?

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.