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To Reduce Disease Burden India Launches A New Study On Access to Affordable Drugs

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As India is struggling hard to come out of economic meltdown, and more – while navigating through the Covid-19 pandemic, the issue of reducing the National Disease Burden (NDP) with comprehensive measures resurfaces. According to a World Bank study, with ’17.5% of the global population, India bears 20% of the global disease burden.’

It’s also a well-reported fact that one such critical measure in this area is expanding access to affordable medicines to a vast Indian population. This is essential, despite some laudable measures taken by the country in this space. Which is why, it has attracted the government’s focus – yet again, even in the new normal.

This is evident from the Notification of the Department of Pharmaceuticals (DoP) dated 13.01.2022. This pertains to the DoP’s request for Proposal (RFP) from reputed companies, “To study the drug pricing policies of different countries/ region and lessons learnt from these countries/ regions in terms of access to medicine at affordable prices.” The selected company will conduct the study, on behalf of the government to understand the drug pricing methodology adopted in at least 10 countries, it said.

According to the RFP document, a minimum of ten countries/regions that should be covered are – Sri Lanka, Bangladesh, China, EU, UK, Australia, USA, Brazil, South Africa, and Thailand. It also mentioned, after selection – the chosen company has to submit its final report in four months, besides quarterly progress report during this period.

This article will focus on the relevance of a renewed government focus on access to affordable medicines, after the third wave of the pandemic, even after various recent measures undertaken by the government in this direction.

What does ‘access’ mean in the healthcare context – a recap:

Although, ‘access’ is a well-used word in the health care scenario, let me recapitulate the same to be on the same page with my readers in this discourse. According to the Agency for Healthcare Research and Quality (AHRQ): Access to health care means having “the timely use of personal health services to achieve the best health outcomes.” It has four components, namely:

  • Coverage: facilitates entry into the health care system. Uninsured people are less likely to receive medical care and more likely to have poor health status.
  • Services: provides a source of care, associated with adults receiving recommended screening and prevention services.
  • Timeliness: ability to provide health care when the need is recognized.
  • Workforce: capable, qualified, culturally competent health care personnel.

Let me emphasize again that the purpose of recapitulating what does healthcare ‘access’ mean, is to give a sense of how are we positioned in India, in this regard.

Key reasons for inadequate access to healthcare, especially in India:

Following are three fundamental reasons for lack, or inadequate access to healthcare, as relevant to India:

  • A large section of the population cannot access healthcare owing its cost relative to their respective income.
  • Many others can’t access, as no quality and affordable facilities are located nearby where they live.
  • Most importantly, a large Indian population can’t have adequate access to quality health care, because they don’t have any healthcare coverage. This point was flagged by the AHRQ, as well.

It is, therefore, noteworthy that to ensure access to quality healthcare, either free or affordable, health coverage for all – public or private, is critical for any nation. Whereas a large Indian population still remains without any health coverage, as the recent government publications vindicate.

Despite high OOPE a large population is still without any health coverage:

On this issue, NITI Aayog report, published in October 2021, shared some important facts. A staggering number of over 400 million Indians, still live without any financial protection for health. This is despite the launch of ‘Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)’ launched in September 2018, and State Government extension schemes, the paper says. Notably, ‘the actual uncovered population is higher due to existing coverage gaps in PMJAY and overlap between schemes,’ the report added.

Interestingly, the paper acknowledged: “Low Government expenditure on health has constrained the capacity and quality of healthcare services in the public sector. It diverts most individuals – about two-thirds – to seek treatment in the costlier private sector. “As low financial protection leads to high out-of-pocket expenditure (OOPE). India’s population is vulnerable to catastrophic spending, and impoverishment from expensive trips to hospitals and other health facilities,” it observed.

The government spending on public health at 1.5% of GDP, remains among the lowest in the world impacting reach, capacity, and quality of public healthcare services. It is compelling people to seek treatment in the costlier private sector. Almost 60% of all hospitalizations, and 70% of outpatient services are delivered by the high-cost private sector, NITI Aayog highlighted.

Major part of OOPE goes for buying drugs:

According to the W.H.O’s health financing profile 2017, 67.78% of total expenditure on health in India was paid out of pocket, while the world average is just 18.2%. Moreover, the Union Health ministry had also reported that ‘medicines are the biggest financial burden on Indian households.’ Around 43% of OOPE towards health, reportedly, went for buying medicines and 28% in private hospitals.

Thus: ‘Much of this problem of debt can be solved if medicines are made available to people at affordable prices. The National Health Policy 2017 also highlighted the need for providing free medicines in public health facilities by stepping up funding and improving drug procurement and supply chain mechanisms,” the report added.

Access to affordable drugs continues to remain a top priority today:

The above point was also emphasized in the Annual Report 2020-21 of the Department of Pharmaceuticals. It underscored: ‘The Government is now contemplating to introduce a new National Pharmaceutical Policy, where – ‘Making essential drugs accessible at affordable prices to the common masses,’ featured at the top of the policy objectives, as follows:

  • Making essential drugs accessible at affordable prices to the common masses.
  • Providing a long-term stable policy environment for the pharmaceutical sector.
  • Making India sufficiently self-reliant in end-to-end indigenous drug manufacturing.
  • Ensuring world class quality of drugs for domestic consumption & exports.
  • Creating an environment for R & D to produce innovator drugs;
    Ensuring the growth and development of the Indian Pharma Industry.

What happens when all will come under health coverage, if at all:

Even when, and if, all Indians comes under health coverage – public or private – drug cost will continue to play a major role even to the institutional payers. This is mostly to ensure the cost of health coverage remains reasonable, and affordable to all. This can possibly be done either through:

  • Price negotiation with the manufacturers, or
  • Price control by the government

In any case, there needs to be a transparent mechanism for either of above two, which the government seems to be refocusing on, as it appears today.

Conclusion:

Thus, to reduce the burden of disease in India, especially after going through a harrowing experience of the Covid-19 pandemic, where co-morbidity posed a major threat to life, India is likely to up the ante, as we move into the new normal.

From this viewpoint, a brand-new study, as mentioned above, initiated by the government to facilitate expanded access to affordable medicines, is a laudable initiative for all Indians. It’s a noteworthy point for the drug industry, as well, especially, the research-based pharma and biotech companies. As I wrote before, they should also pick this signal to focus on all 3 areas of innovation for affordable access to innovative drugs, not just on costly patented drugs for only those who can afford.

By: Tapan J. Ray    

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

 

 

Is India in The Eye of The AMR Storm?

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‘With 700,000 people losing battle to antimicrobial resistance (AMR) per year and another 10 million projected to die from it by 2050, AMR alone is killing more people than cancer and road traffic accidents combined together.’ This was highlighted in the Review Article, ‘Antimicrobial resistance in the environment: The Indian scenario,’ published in the Indian Journal of Medical Research (IJMR), on June 03, 2019.

The article further noted, ‘AMR engendered from the environment has largely remained neglected so far,’ which has a snowballing effect. Illustrating the enormity of its impact, the researchers recorded: ‘Economic projections suggest that by 2050, AMR would decrease gross domestic product (GDP) by 2-3.5 percent with a fall in livestock by 3-8 percent, costing USD100 trillion to the world.’

Besides International media, fearsome consequences of AMR are also being highlighted by the Indian media from time to time. For example, on November 21, 2018, a leading national business daily carried an apt headline: ‘India in the firing line of antimicrobial resistance.’ More intensive coverage of such nature for this public menace, would hopefully appeal to the conscience of all those who can meaningfully address this situation, especially the government.

Against this backdrop, I shall explore in this article, whether India is really in the eye of this AMR storm, which is posing an unprecedented threat to many lives, perhaps more in India. 

India is being called the AMR capital of the world: 

Analyzing the emerging research data in this area, India was referred to as ‘the AMR capital of the world,’ in the 2017 Review Article, title ‘Antimicrobial resistance: the next BIG pandemic.’ Curiously, besides umpteen number of published papers documenting this scary development, very few enlightened individuals would dare to push an argument to the contrary. Whereas, besides framing a policy document on AMR,nothing much is changing in India on this score. This is happening, even when it is evidenced that a gamut of the most powerful antibiotics, are not working against many deadly bacteria. Added to it, India still doesn’t have a public database that provides death due to AMR.

Are adequate resources being deployed to fight the menace:

Today one would witness with pride that India’s ‘Chandrayaan 2’ lunar mission is moving towards the Moon’s south polar region, where no country has ever gone before. At the same time, despite AMR threat, India’s budgetary allocation for health in 2018-2019, reportedly, shows a 2.1 percent decrease of the total Union Budget from the 2.4 percent in 2017-2018.

It is interesting to note that India: ‘Despite being the world’s sixth largest economy, public health spending has languished at under 1.5 percent of GDP, one of the lowest rates in the world. For comparison, the United Kingdom shelled out 9.6 percent of its GDP in 2017 on health. The United States’ health expenditure is 18 percent of GDP.’

‘Ayushman Bharat’ and health care infrastructure:

Recently lunched public health program - Ayushman Bharat, although is not a Universal Health Care (UHC) program, it has targeted to cover ‘less than half the population and excluding 700 million people’. While giving a thumbs-up to this initiative, if one looks at the overall health infrastructure in India to make it possible as intended, it may not encourage many.

To illustrate this point, let me quote only the salient points, as captured in a 2018 study, published in the British Medical Journal, as follows:

  • The total size of health workforce estimated from the National Sample Survey (NSS) data was 3.8 million as of January 2016, which is about 1.2 million less than the total number of health professionals registered with different councils and associations.
  • The density of doctors and nurses and midwives per 10,000 population is 20.6 according to the NSS and 26.7 based on the registry data.
  • Health workforce density in rural India and states in eastern India is lower than the WHO minimum threshold of 22.8 per 10,000 population.
  • More than 80 percent of doctors and 70 percent of nurses and midwives are employed in the private sector.
  • Approximately 25 percent of the current working health professionals do not have the required qualifications as laid down by professional councils, while 20 percent of adequately qualified doctors are not in the current workforce.

The intent to deliver health care as announced by various governments from time to time is good. But, the available health infrastructure to deliver these meaningfully are grossly inadequate, creating a huge apprehension among many. This is not just because of the grossly inadequate number of hospitals, doctors, nurses and paramedics, but also their even uneven spread in the country. The cumulative impact of these, fueled by corruption, ‘missing doctors, ill-equipped health professionals, and paucity of required funds’ continue creating a humongous problem for the public, at large, to get affordable health care.

At the same time, there is ‘a serious lack of new antibiotics under development to combat the growing threat of antimicrobial resistance.’ Imagine, a situation when India gets caught in the eye of the AMR storm and imagine the consequences of that, as you deem appropriate.

Lack of new antibiotics under development to combat AMR:

The World Health Organization (WHO) report - ‘Antibacterial agents in clinical development – an analysis of the antibacterial clinical development pipeline, including tuberculosis’, launched on September 20, 2017 shows ‘a serious lack of new antibiotics under development to combat the growing threat of antimicrobial resistance.’

It further reported: ‘Most of the drugs currently in the clinical pipeline are modifications of existing classes of antibiotics and are only short-term solutions.’ The report also found, very few potential treatment options for those antibiotic-resistant infections identified by WHO as posing the greatest threat to health, including drug-resistant tuberculosis which kills around 250 000 people each year.

Thus, the point to ponder simultaneously is, whether there is any decline in global investments for antibiotic research, both by the drug industry and the public funders.

Declining investment on new antibiotic R&D: 

As stated in the May 2016 paper, titled ‘Tackling Drug-Resistant Infections Globally. As the report indicates: ‘The UK Prime Minister commissioned the Review on Antimicrobial Resistance to address the growing global problem of drug-resistant infections. It is chaired by Jim O’Neill and supported by the Wellcome Trust and UK Government, but operates and speaks with full independence from both.’

The report acknowledges that new antibiotic research and development has been suffering from decades of under-investment by companies and governments. The reason being, antibiotic discovery and development are no longer an attractive proposition for commercial drug developers, for a key fundamental reason:

And this is, lack of a dependable, commercially-attractive market for antibiotics that meet large unmet medical needs. As a result, the volume of sales of a such new antibiotics will be low, and restricted only to multi-drug resistant bacteria. Otherwise, older and cheaper antibiotics will still work against most other infections. In that scenario, patented new antibiotics will have to compete with generics, keeping the price low. This combination of price pressure and low volumes makes antibiotics unattractive as a commercial proposition for many drug developers.

Which is why, as the report says: ‘Less than 5 percent of venture capital investment in pharmaceutical R&D between 2003 and 2013 was for antimicrobial development.’ Against total venture capital investment of USD 38 billion in pharmaceutical R&D, antimicrobial venture capital investment was mere USD 1.8 billion, during the same period. Coming back to India specific concerns, let’s have a look at the sociocultural issues in the country, associated with AMR.

Sociocultural issues are fueling the fire:

Understandably, the AMR problem remains intricately intertwined with a number of sociocultural issues of India. It has been established in several studies that social level, socioeconomic and socio-cultural status can play a significant role in the health status of people. Most research done on this subject indicates that higher level of socioeconomic classes reflects at a higher level of health and longevity. Much of this comes from the fact that there is a higher level of education and health care that is available for ‘this class level’.

Sociocultural issues in India also includes, poor hygienic practices, inadequate clean water and good sanitation facilities across the country, besides improper implementation and lack of good governance of health policies, rules and regulations. These factors are also aggravating the AMR problems in the country, as stated in the article, titled ‘‘Public Health Challenges in India,’ published in the Indian Journal of Community Medicine, in its April-June 2016 issue. Which is why, just addressing the indiscriminate use of antibiotics and restricting its wide consumption, aren’t not enough, any longer.

Is India in the eye of the AMR storm?

‘Antimicrobial resistance (AMR) has emerged as a major threat to public health estimated to cause 10 million deaths annually by 2050. India carries one of the largest burdens of drug-resistant pathogens worldwide.’ This was highlighted in the research paper, titled ‘Antimicrobial resistance: Progress in the decade since the emergence of New Delhi metallo-β-lactamase in India’, published in the Indian Journal of Community Medicine, on March 12, 2019.

The article noted, ‘AMR has been identified as a global health threat with serious health, political, and economic implications.’ The paper concluded with a serious note, which is worth taking note of. It found, the full throttle efforts to tackle the AMR challenge in India still requires significant efforts from all stakeholders. It underscored, ‘Despite the adoption of a national policy and significant activities already underway, progress is limited by a lack of clear implementation strategy and research gaps.’ 

Suggested areas of focus in India:

As ‘the Sword of Damocles’, in the form of AMR, hangs over the head of Indian population, there are certain important measures that the country can definitely take to contain AMR, whereas some other critical ones will be challenging to roll out, immediately.

It is unlikely, during this period India will have the requisite wherewithal to focus on discovery and development of new antibiotics to tackle AMR. Similarly, only framing rules and regulations for doctors, patients, dispensing chemists or hospitals to prevent antibiotic misuse, which are not persuasively yet strongly implemented, won’t also yield desired results. Nevertheless, efforts must continue for their effective compliance.

That said, what the country can seriously focus on, sans much constraints, is on taking collective measures in resolving some of the crucial but intimately associated sociocultural issues, with all sincerity and precision. A few of these important areas include, intense public awareness campaigns on the growing threat to life due to AMR, clubbing the benefits of availing good sanitation facilities, hygienic lifestyle and everyday practices.

Moreover, misuse of antibiotics in poultry, animal farming and agriculture should be curbed. Alongside, mass vaccination program for prevention of bacterial and viral infections, should be made available all over the country. Monitoring of the incidence of death due to AMR, on an ongoing basis, is another practice should also feature in the must-do list, providing access to this database to public. Responding meaningfully to International coalition for country-specific action, is also very important. To attain this goal a healthy socioeconomic environment needs to be encouraged, with corruption free efficient governance.

Conclusion:

That India is in the eye of the AMR storm, can’t be wished away any longer. Thus, the fight against AMR will need to be a well-orchestrated one, engaging all stakeholders as partners. The private sector should also actively participate in the AMR awareness programs under public–private partnership (PPP) or through Corporate Social Responsibility (CSR) initiatives.

The whole process should be backed by a creative strategy, having buying-in from all concerned, but spearheaded by the government. That’s the minimum that, I reckon, should happen when the country is in the eye of the impending AMR storm.

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.

 

Pharma Policy Execution Gap Limits Access To Affordable Medicines?

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“The cost of new drugs is putting increasing pressure on people in both rich and poor countries”- was eloquently expressed in an article, titled “Why do new medicines cost so much, and what can we do about it?”. This was published by “The Guardian” on April 09, 2018.

Almost synchronically, expressing concern on this issue, the World Health Organization (W.H.O) advised the world leaders ‘to take bold new approaches’ for increasing access to medicines for all. A UN high-level panel on ‘access to medicines’ spent almost a year deliberating over related issues. The panel members were from pharma companies, as well as civil society and academics. The final report coming in September, backed de-linkage of the costs of R&D from the eventual price of the drug. Notably, the author who is also the health editor of the above publication, feels that any positive outcome in this direction is unlikely to materialize soon.

The majority of big pharma constituents, with the possible exception of GSK, whose then chief executive Sir Andrew Witty was unenthusiastic about the UN report. Probably because, it supported governments’ right to invoke ‘a get-out’ from the World Trade Organization’s TRIPS agreement. This is to bypass drug patents and make cheaper versions of the respective generic equivalents, in the interests of public health, in accordance with the 2001 Doha declaration. However, the author is hopeful that, “as happened with AIDS, each new crisis over access to medicines – whether concerning a common liver disease or a rare cancer, and particularly over the antibiotics that are under threat and vital to all our lives – is likely to put pressure on companies to find ways to bring the costs of medicines down.”

Stakeholder pressure for increasing access to medicines continues. Even in smaller developed countries, such as Switzerland, a section of the public demands that “Swiss authorities must act to make lifesaving drugs more affordable by introducing compulsory licensing.” Or, one can now see reports saying,“Irish patients are being denied access to nine drugs that are widely available across Europe, largely, on cost grounds.”

Nevertheless, regardless of mounting pressure for drawing a reasonable symmetry between cost of, especially new drugs and their improved access to patients, ongoing status-quo continues. In this article, I shall dwell on this concern from the Indian perspective, focusing on an agonizingly stark implementation-gap related to the current Indian pharma pricing policy.

Under pressure, pharma now recognizes the need for affordable drugs:

Coming under intense pressure of patients and other stakeholders, even the largest trade association of Big Pharma has recently changed its stance on this issue, though clearly sharking any responsibility for the same. It just recognized the need for affordable medicines for improved patient access to treatments by saying: “Too often patients have to fight to access breakthrough medicines that are revolutionizing how we fight disease.” It also accepted the fact that “many Americans are struggling to afford their medicines.”

“We can improve patient access and affordability by moving toward a system that prioritizes results for patients. Biopharmaceutical companies are working with insurers to develop innovative and flexible ways to pay for medicines that focus on results, lower out-of-pocket costs and enable patients to access the right treatments the first time” – it added.

What it really means: 

What it really means ‘treatment outcomes-based drug pricing’ or ‘value-based drug pricing (VBP)’. In other words, a situation where drug prices are set in line with their real and demonstrated clinical and economic value to patients, against other available products. This model will also ensure that patients’ money doesn’t get wasted from drugs that aren’t effective on them. The VBP model is, thus, significantly different from product pricing, based on ‘undisclosed’ cost of ongoing innovation for new drugs.

Is this Big Pharma’s new way to change optics?

The intent for imbibing VBP, as expressed by the above pharma association, throws open the door for discussion of its core intent. Is the intention real, or another Big Pharma way of changing general optics on the sensitive issue of new drug pricing? This doubt creeps in from the findings of some important studies on this issue. One such is an interesting paper, titled “Pricing for Survival” from KPMG. The analysis highlighted very limited application of VBP concept, and also why it is not yet viable – despite the hype being created around it.

According to KPMG, “there were 25 drugs engaged in various types of VBP with payers in the fragmented United States market as of September 2017. The problem is, these models appear to be limited in applicability to disease states with more standardized protocols and dominated by drug therapies with single indications – notably osteoporosis, diabetes and hepatitis C.” To date, VBP models seem to be facing several constraints, such as it is appealing mostly to payers that are fully integrated with healthcare delivery i.e., closed-loop payer-provider health systems or integrated delivery networks.

“The takeaway is, when it comes to specialty and orphan drugs, outcomes-based pricing simply faces too many barriers at present” – the article elaborated. Be that as it may, let me now explore the relevance of VBP in India.

Any relevance of VBP in India?

VBP has been tried in a health care environment where payers and drug companies are two critical players for access to affordable medicines, as we see in the KPMG study. Under any value-based pricing agreements for pharmaceuticals, both payers and pharma companies agree to link payment for a medicine to the value achieved, rather than volume.

Whereas, in the Indian healthcare scenario, as we are experiencing today, payers are mostly individuals.  Despite various well-publicized health schemes, expenditure on health, including drugs, remains by and large ‘out of pocket (OoP)’ – for a large Indian population. Hence, copying western framework for implementation VBP in India, would call for scores of ‘pharma – individual payer agreements.’ This would be a daunting task, if not impractical, to even try it out.

In this context, let me touch upon the Ayushman Bharat scheme that was launched by the Prime Minister on September 23, 2018, but just in one of the 29 states of India – Jharkhand. If, or as and when it will cover the entire country, the scheme is expected to bring 107.4 million families and more than 550 million people under health insurance coverage. However, the work seems to be still in progress.

There are three financing models for this scheme – insurance model, trust model and hybrid model – and the 19 states that have come on board for the scheme’s implementation in the country, have chosen a trust model, according to the Union Health Minister. The minister also reiterated: “Things are still unfolding. Only when the letters reach the beneficiaries will they understand and react.”

Nevertheless, the Union Health Minister himself, just like his counterparts in the previous governments, exhibited confidence that the country is “moving towards universal health cover with Ayushman Bharat scheme,” – as was the headline of the above media report.

Going by the past and current outcomes of several such government schemes in the country, and what the minister himself articulated on September 17, 2018, a large section of the Indian population still remains  apprehensive on the fast pan-India rollout and overall success of this ambitious health scheme. Hence, at this stage, I reckon, it may not be relevant to discuss the application of VBP model on Ayushman Bharat project. I wrote about such apprehensions in this Blog on June 18, 2018.

Having said that, VBP still remains relevant when we look at the government’s intent captured in the National Pharmaceutical Pricing Policy (NPPP) 2012,’ as I shall discuss below.

VBP and the policy implementation gap:

For making the point clearer, let me keep the Ayushman Bharat scheme aside because of its associated uncertainties. Even in the current health care environment of high OoP expenditure on drugs, especially on high priced new drugs, if one tries to make use of the VBP model, it is very much possible.

This is because, the National Pharmaceutical Pricing Policy 2012, under point 4 (XV) on ‘Patented Drugs, categorically states:  “There is a separate Committee constituted by the Government order dated February 01, 2007 for finalizing the pricing of Patented Drugs, and decisions on pricing of patented drugs would be taken based on the recommendations of the Committee.”

Curiously, even 6 years down the line, no meaningful decision has been taken on patented drug pricing in India by the successive governments. As I wrote in this Blog on December 12, 2016, Price Negotiation For Patented Drugs: Still A Policy Paralysis.

Parliamentary Standing Committee intervenes:

Six years after the constitution of the committee by the Department of Pharmaceutical (DoP), the long-awaited report was eventually submitted with a vague formula for pricing patented drugs in India. Intriguingly,the issue remained as such, until the Parliamentary Standing Committee’s August 2016 report was placed before the parliament. It strongly criticized the DoP’s efforts to recommend measures in regulating prices of life-saving patented drugs, despite government assurances for the same.

On September 23, 2016, media reported: “Upbraided by the parliamentary standing committee for its gross negligence and lackadaisical attitude, the department of pharmaceuticals has set about seeking suggestions from different ministries on price regulation of patented drugs.”

According to reports, a new inter-ministerial committee was formed thereafter, under the chairmanship of one of the Joint Secretaries of the DoP to suggest a new mechanism to fix prices of patented drugs in the country.
The other members of the committee are Joint Secretary – Department of Industrial Policy and Promotion (DIPP); Joint Secretary – Ministry of Health and Family Welfare; and Member Secretary – National Pharmaceutical Pricing Authority (NPPA). But, the saga continues – at the cost of patients’ health interest.

Conclusion:

As it appears, there still lies a clear opportunity for Indian drug pricing policy makers introduce VBP concept for patented drugs in the country. Following this model, the prices of new and innovative drugs under patents can be set in line with their real and demonstrated clinical and economic value to patients, over the available existing products. Health Technology Assessment (HTA), for example, could be an effective tool in this process.

Additionally, the VBP model could also minimize, if not eliminate the risk of patients paying a high a price for new drugs coming through incremental innovation, adding too little clinical and economic value over existing drugs. There may, of course, be some teething trouble or even important issues in arriving at consensus on value-metrics for VBP. But, this can be sorted out through meaningful engagement with concerned parties.

Strikingly, even after 6 years since the NPPP 2012 was announced, nothing tangible has been made known to stakeholders on the execution of ‘patented drug pricing policy’ in India. An avoidable policy execution gap continues, limiting access to affordable new medicines to a vast majority of the Indian population, even today.

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.

Will AB-NHPM Mitigate Indian Healthcare Crisis?

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Since long, hypes have created on several healthcare schemes in India, by the successive Governments of different political dispensation. These attracted mostly positive vibes at the time of announcements. Nevertheless, as we move on, a vast majority of Indians continues to live in the midst of a health care crisis, as it were.

The National Health Policy 2017 also acknowledges this crisis as it writes: ‘growing incidences of catastrophic expenditure due to health care costs, which are presently estimated to be one of the major contributors to poverty.’

More recently, the May 31, 2018 article, published in the British Medical Journal (BMJ) continued to echo the similar concern. It reiterated, since both government funding and social health insurance contributions are insufficient to meet health care needs of households, over three-fourth of all healthcare payments are paid Out of Pocket (OOP) at the point of service delivery while medicine purchase (approximately 63 percent) account for the single largest component of these payments.

A major cause of catastrophe and impoverishment at the household level is undoubtedly the OOP expenditure on health care, including medicines. According to the above BMJ paper, 29 million households, implying about 38 million persons were pushed into poverty in the year 2011–2012, only because of this reason. Although, this study was based on a cross- sectional analysis of ‘National Sample Survey data, 1994–2014’, the public health expenditure in India has not shown any significant increase since then, either. On the contrary, the public spending in some health-related areas has come down in the recent years.

Is a health care crisis primarily a ‘financial’ crisis?

The issue of budget allocation and adequate public expenditure on healthcare in India assumes significance to understand this point better. It is generally believed that ‘a health care crisis is primarily a ‘financial’ crisis in which countries cannot successfully meet people’s access to medicine due to the rising cost of health care services and, more importantly, pharmaceuticals.’ A sincere political will is absolutely necessary to resolve these issues, meaningfully – the paper points out.

But, there doesn’t seem to be any financial crisis in the country now, as the Government claims. India is the fastest growing nation in the world. Why is then the health care crisis continuing for the majority of Indian, if not worsening? Why isn’t public expenditure on health care increasing despite such spectacular financial achievements? Could it be due to lack of requisite political intent?

On paper all health care related schemes look good:

Yes, I reckon, on paper all health care related schemes look reasonably good, assuming these will be implemented well. These may include, National Health Missions (NHM) covering both rural and urban poor or even the likes of Rashtriya Swasthya Bima Yojana (RSBY). So is also the most recent one - Ayushman Bharat – National Health Protection Mission (AB-NHPM) announced by the Government during 2018-19 Union budget presentation and approved by the cabinet on May 21, 2018. However, its implementation on the ground seem to be wobbly, too. Thus, many wonders whether this new scheme on the block will help the nation tiding over the existing health care crisis.

I broadly discussed this subject on February 5, 2018, in this Blog. However, in this article, I shall try to ferret out the reasons of such apprehension on the AB-NHPM, against some critical parameters, just as illustrations:

Who contributes and how much to health expenditures: 

From the National Health Account Estimate (NHAE) of October 2017, one gets a broad idea of who contributes and roughly how much of the health expenditures in India, as follows:

Union Govt. State Govts. Local bodies Enterprises, including insurance NGOs External donors OOPE
8.2% 13.3% 0.7% 4.4% 1.6% 0.7% 67%

Where does the treatment take place?

Place Urban (%) Rural (%)
Public healthcare 21 28
Private healthcare 79 72

It is interesting to note, although private health care costs over 4 times more than the public healthcare, more patients are compelled to go for private health care. (Source: National Sample Survey 2014, Ministry of Statistics and Program Implementation.)

Reasons for not using public health care facilities:

Around55.1percent of households are not using public health facilities.The reasons for not using public health care facilities by the members of the household when they fall sick, as reflected in the National Family Health Survey (NHFS) data, are interesting. Following are the main reasons:

Poor quality of care No nearby facility Long waiting time Inconvenient facility timing Health Personnel absent
48.1% 44.6% 40.90% 26.4% 14.8%

Addressing these reasons would help significant reduction in OOPE:

The February 2018 report of the ‘Centre for Technology and Policy Department of Humanities and Social Sciences, IIT Madras,’ vindicates this important point. It provides unambiguous evidence that strengthening the basic infrastructure of Health Sub-Centers (HSC), along with trained personnel and adequate medicines, ensure diversion of patients from expensive private facilities – increasing patients’ access to affordable health care. Consequently, OOP expenditure by families in health care and particularly medicines, sharply comes down.The study reported that such reduction in outpatient care varied between 77 percent and 92 percent in a pilot project on ensuring universal health coverage.

Break-up of healthcare expenditure – primary care costing the most:  

One gets a broad understanding on the general break-up of health care expenditure in India from the (NHAE) of October 2017, as follows:

Primary care Secondary care Tertiary care Patient transportation Governance & supervision
45.1% 35.6% 15.6% 4.6% 2.6%

It is worth noting that transportation costs are significant for many patients, just for accessing the existing public or private health care facilities, besides getting important diagnostic tests done, or even to buy many medicines. This expenditure would continue to exist, even if NHPS is put in place. On the other hand, strengthening the low-cost Government HSCs, would help greater patient access to health care, bringing down the OOPE, remarkably.

Currently, a sizeable number of reasonably decent medical treatment points, are located quite far from many villages. Thus, availing any decent health care facility by a large number of rural folks, no longer remains a matter of choice, up until the disease turns into a life-threatening one, due to protracted negligence. One such example is a large number of child deaths occurred at the state-run BRD Medical College hospital in the Gorakhpur city of Uttar Pradesh, in 2017. Most of them were brought in a critical condition from far-off villages.

Highest OOPE expenditure incurred for outpatient treatment:

According to the December 2016 publication titled ‘Household Health Expenditure in India’  of the Union Ministry of Health, one will get an idea of top 3 key consumption areas, out of the total OOPE on health care services, which are as follows:

Outpatient care Inpatient care Preventive care
54.84% 31.96% 4.26%

However, of the total OOPE, 53.46 percent was spent on medicines and 9.95 percent was spent on diagnostics. More importantly, 82.29 percent of the total OOP medicines expenditure and 67 percent of total OOP diagnostic expenditure were in outpatient treatment, the report highlights.

New NHPM excludes two major components of OOPE: 

Based on the above facts, it is interesting to note, while the maximum expenditure for health is incurred towards Primary Care and Outpatient treatment, the brand new NHPM does not cover both. In that case, how will it address the health care crisis in India and significantly reduce OOPE on health?

Does the total cost for AB-NHPM reflect in any budget allocation?

In this context, let me touch upon the other aspect of AB-NHPM, which is giving shape to 150,000 ‘Health and Wellness Centre (HWC)’ in India.On April 14, 2018, the first HWC – under the AB scheme was launched by the Prime Minister of India at Bijapur in Chhattisgarh.But, the fund allocated in the Union Budget 2018-19 for HWCs is just Rs. 120 million, which realistically is expected to support just around 10,000 HWCs. Whereas, 150,000 HWC would cost around Rs. 3 billion. The same issue of abysmal budgetary allocation, both by most of the state governments and the center, has been raised for NHPM, as well.

As we have seen in the chart of ‘who contributes and how much to current health expenditures’, that OOPE stands out, it should in no way be allowed to remain around that number in India, because of continuing low public health expenditure on health care.

Conclusion:

Coming back to what I started from – the issue of ongoing health care crisis in India with incredibly high OOPE expenditure of the households on health. Many health care schemes have come, gone or about to be jettisoned – getting replaced by the tweaked versions of the old ones – of course in a new Avatar, supported by much expected media hypes, virtually terming it as a panacea. But, the key problem of sincere implementation of those schemes still lingers.

Sharp Government focus, backed by adequate budget allocation, on primary health care and bringing down outpatient treatment cost, which contribute to a high proportion of OOPE, remain as elusive as ever. Thus, I reckon, AB-NHPM is unlikely to mitigate the health care crisis in India, at least,in the short to medium term.

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.

 

NHPS: “One Nation, One Scheme is Enticing”, But Will It Work?

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Yet another slogan: “One nation – One Universal Health Coverage (UHC)” would indeed be enticing for many, including India.

Nevertheless, that’s just a hope. Let’s now try to get a message out of what has been recently happening around this area through some reality checks.   The reality is, during post union budget (2018-19) television discussions on the ‘National Health Protection Scheme NHPS’, various experts very enthusiastically created a general impression that the scheme is a game changer for India. Many of us also felt that India is moving fast towards a viable UHC in the country!

As a consequence of which, it was widely expected that State Governments, too, will make necessary provision in their respective health budgets towards this ambitious insurance-based healthcare project. This specific step is absolutely essential, as the State Governments are supposed to contribute 40 percent towards NHPS.

Is it happening that way?

Intriguingly, on March 9, 2018, when Maharashtra State budget was announced, one witnessed a different reality altogether on the ground. In its 2018-19 budget, the Maharashtra Government, reportedly, ‘slashed its budget allocation for the health insurance scheme for the poor by over 50 percent.’

The Finance Minister of Maharashtra announced an allocation of ₹576 crore for the ‘Mahatma Jyotiba Phule Jan Aarogya Abhiyan’ in 2018-19 as against the last year’s budget outlay of ₹1,316 crore for the same area.

Keeping this latest development just as an example, in this article I shall explore some of the recent developments on the much talked about NHPS. Before doing that, let me give a perspective on the NHPS.

NHPS: not a new promise:

Rekindling the perennial hope on UHC in India, ‘National Health Protection Scheme NHPS’ was first announced by the incumbent Government in its 2016 budget, but the scheme didn’t take off. In its first avatar NHPS offered ₹100,000 insurance cover, with a top-up of ₹30,000 for senior citizens.

“It couldn’t get implemented, but that scheme is now subsumed by this current scheme,” reportedly, justified Manoj Jhalani, Additional Secretary in the Ministry of Health and Family Welfare, who has been given additional charge and designated as Mission Director of Ayushman Bharat, currently.

There isn’t any doubt that NHPS has been recast in the Union Budget Proposal of 2018-19, with a slight modification in naming it to ‘Ayushman Bharat—the National Health Protection Scheme (AB-NHPS)’. The modified scheme is also termed by many as “Modicare”, probably following ‘Obamacare’ in the United States. The Union Finance Minister of India in his Budget speech also termed this scheme as ‘the world’s largest government funded healthcare program.’

A recast of insurance-based public health coverage:

As a part of ‘Ayushman Bharat Program’, the scheme will now provide health insurance cover of up to ₹500,000 to 100 million poor and vulnerable families. Its benefits are now expected to reach 500 million individuals – 40 percent of India’s population, raising health insurance cover by up to 17 times from the existing Rashtriya Swasthya Bima Yojana (RSBY) that pegs the health coverage at ₹30,000 per year.

Just to give a flavor of the past, the National Family Health Survey-4 (2015-16) indicates that in India only 28.7 percent families have, at least, one person covered by a health insurance policy.

In the health insurance coverage based NHPS, the center and states will split financing the scheme in a 60:40 ratio. However, it is still not clear how would they do it. Neither is it known how the NHPS will fit in with the existing RSBY or various already existing state level schemes.

Apprehension expressed by some States:

Several other Indian States, such as Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Madhya Pradesh, Chhattisgarh, Karnataka, West Bengal and Rajasthan already have a similar health protection scheme in place. Probably because of this reason some of these states, such as West Bengal and Karnataka, reportedly, have raised doubts about whether they will actually join the scheme.

On the other hand, health officials from  Telangana, Tamil Nadu and Kerala intend to seek clarifications from the Centre on various aspects of the plans. As I mentioned before, this is mostly because all States will require to contribute 40 percent of total expenses towards funding the ‘Ayushman Bharat—the National Health Protection Scheme (AB-NHPS).’

A fresh evaluation: Experts don’t rate public health insurance schemes high:

Interestingly, some fresh apprehensions on the effectiveness of insurance-based health coverage continues to come up. One such is as follows:

“The current approach of National Health Mission – whereby states must pre-commit to expenditure allocations across 2,000 budget lines with no real flexibility to subsequently move expenditures between different line items – will render NHPS ineffective.”

This apprehension has been raised by none other than Dr. Arvind Panagariya, currently Professor of Economics at Columbia University and the Vice Chairman of the Government of India’s think-tank NITI Aayog, between January 2015 and August 2017. This article, titled “It’s all in the design: Ayushman Bharat can be transformational if the governance of public healthcare is altered”, was published in the Times of India on March 07, 2018.

Dr. Panagariya further observed: “For the poorest of the poor to seek private hospital care speaks volumes for their lack of confidence in the public healthcare system. Studies by experts do not give high marks to existing insurance schemes either.”

Some key observations:

In his above recent article, Dr. Arvind Panagariya made some key observations that include some of the following:

  • A 2017 study of the Rashtriya Swasthya Bima Yojana (RSBY), published in the journal Social Science and Medicine, concludes, “Overall, the results [of our study] suggest that RSBY has been ineffective in reducing the burden of out-of-pocket spending on poor households.”
  • In 2014-15, private hospitals treated 58 percent of in-patient cases in rural areas. Even among the poorest 20 percent rural households, 42.5 percent of the patients went to private hospitals for in-patient treatment.
  • Resource shortage has resulted in less than adequate infrastructure and personnel in the public health facilities. Consequently, in 2014-15, a mere 28 percent of those needing outpatient care came to the public health facilities. A hefty 72 percent of patients went to private providers.
  • Considering that the private providers are predominantly unqualified individuals, often having no more than a high school education and no formal medical education, such disproportionate reliance on them is indicative of a serious failure at the public health facilities, especially in rural India.
  • Design and implementation challenges facing NHPS are even greater. Hospitals will have an inherent interest in pushing patients towards more expensive procedures or towards procedures not even required. Any lack of clarity in delineating the included and excluded procedures will become a source of abuse.
  • Superior outcomes would require a fundamental change in governance whereby performers are rewarded, and non-performers are punished. The story on secondary and tertiary care is not especially different.

In my view, these observations are worth taking note of, urgently, and more importantly, by learning from the past, avoiding similar mistakes getting repeated. Meaningful implementation of NHPS on the ground should be a top priority, especially when around 7 percent of the country’s population gets pushed below the poverty line, every year, due to high out of pocket health expenditure.

I also discussed the subject in this Blog on February 05, 2018. The article was titled “Union Budget 2018: The ‘WOW’ Moment for Indian Healthcare?”

Conclusion:

Any meaningful initiative on public healthcare for all, will be wholeheartedly welcomed in India, just as many other announcements made earlier by various Governments over a period of time. AB-NHPS – although announced in the very last year of the incumbents Government’s first 5-year term, has attracted similar interest. No less enthusiasm was displayed by the stakeholders, when the NHPS was first announced in the 2016 Union Budget of India.

The good news is, in the midst of all this, on March 06, 2018, Prime Minister Narendra Modi has, reportedly, reviewed the preparedness for the launch of AB-NHPS.’ However, details of the same are not known to many, just yet.

That said, any type of insurance-based public health coverage, spanning across the length and the breadth of India, without access to well-equipped and well-staffed health facilities, currently poses a serious handicap for the nation. It may be a legacy factor, but nothing significant happened in the last four years, either. This is regardless of around 70 percent of the country’s population still live in rural India, with a sizeable majority denied of access to affordable health care, as up till now.

Let me come back to the basic question: ‘One Nation, One Scheme, though, is enticing, but will it work?’ I reckon, unlike, 2016, if NHPS is effectively implemented urgently, together with ‘Ayushman Bharat’ program in its entirety, as desired, things could possibly change for the better, in a medium to long term time frame.

However, it appears, a workable game plan of AB-NHPS is still unclear to many, including a large number of State Governments who are supposed to be the key implementers of NHPS. In this scenario, would AB-NHPS fetch any palpable near-term dividend to the target citizens, at least in 2018 or even in 2019?

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.