Tag Archives: Coverage

Meeting India’s Unmet Biologic Drug Needs Some Global Synergy Evident – But Patients Need More

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Many reports have vindicated the rapidly growing importance of biologic drugs in the treatment of a wide range of complex ailments. These include autoimmune diseases, cancers, hormonal irregularities, anemia, and to prevent various diseases such as vaccines, have drawn healthcare experts’ attention globally.

As defined by experts, Biologics are larger, more complex molecules compared to traditional small molecule pharmaceutical drugs. Unlike traditional pharmaceuticals, they require some components from a living organism to be manufactured.

The critical importance of biologic drugs lies in their ability to provide innovative treatment options, address unmet medical needs, and significantly impact patient outcomes in various disease areas. Towards this endeavor, a clear pathway for focused initiatives is warranted, especially in countries like India.

This article will explore this domain to get a sense of how much and how fast the country is progressing in this space, having huge healthcare significance, for all. Let me start with a quick recap on the areas of seminal importance of biologic drugs – to help all to be on the same page – as I start this deliberation.

The critical importance of biologic drugs:

The critical importance of biologic drugs, I reckon, lies in their unique properties and therapeutic potential:

Targeted Therapies: Designed to interact with specific molecules or receptors in the body, allowing for targeted treatment. This specificity can enhance the efficacy of the drug while reducing potential side effects on healthy cells and tissues.

Novel Treatment Options: Offer novel treatment options for diseases that were previously difficult to manage or had limited treatment options. They have revolutionized the management of conditions such as rheumatoid arthritis, psoriasis, multiple sclerosis, and certain types of cancer.

Personalized Medicine: Paving the way for personalized medicine, as it can be tailored to individual patients based on factors like genetic profiles or specific disease characteristics. This approach allows for more precise and effective treatment strategies.

Disease Modification: Unlike some traditional drugs that primarily alleviate symptoms, biologics can often modify the underlying disease process. They can target specific pathways or molecules involved in disease progression, potentially leading to long-term benefits and improved outcomes.

Improved Quality of Life: Has the potential to significantly improve the quality of life for patients living with chronic or debilitating conditions. By effectively managing symptoms and slowing disease progression, they can reduce pain, disability, and the need for other interventions.

It is important to note that biologic drugs are complex to manufacture, often require specialized infrastructure, and can be costly. No wonder why the India specific research paper - published on January 18, 2023 commented: “Although various biologic drugs are already available, they are still not within reach of the common person due to financial constraints.”  This prompts me to explore with examples some of the key issues that Indian patients confront while meeting this health need.

Patient access to original biologic drugs in India faces several key barriers:

Patient access to original biologic drugs in India faces several key barriers, including: 

1. Cost and Affordability:

- Trastuzumab (Herceptin): The cost of a single course of Herceptin, used in the treatment of breast cancer, can range from several lakhs to crores of rupees, making it financially burdensome for many patients in India.

- Eculizumab (Soliris): Eculizumab, used in the treatment of rare blood disorders, can cost several lakhs of rupees per month, making it unaffordable for most patients.

2. Limited Healthcare Coverage:

- Many health insurance policies in India have limitations or restrictions on coverage for expensive biologic drugs, requiring patients to bear a significant portion of the cost out of pocket.

- Some government-funded healthcare schemes, such as the Pradhan Mantri Jan Arogya Yojana (PMJAY), may have restrictions on coverage for expensive biologic therapies, limiting patient access.

3. Regulatory Barriers:

- The approval process for biosimilar versions of original biologic drugs could face delays in India. For example, the biosimilar version of Trastuzumab (Herceptin) faced delays in obtaining regulatory clearance, resulting in delayed patient access to more affordable alternatives.

- The regulatory requirements for original biologic drugs can be complex and time-consuming, leading to delays in drug approvals and subsequent patient access.

4. Limited Local Manufacturing:

- Drugs like Bevacizumab (Avastin) and Adalimumab (Humira) used in India are often imported, leading to supply chain challenges and potential delays in availability.

- Limited local manufacturing of certain original biologic drugs can result in dependence on imported versions, leading to potential pricing issues and supply disruptions.

5. Physician Awareness and Education:

- Some physicians may have limited awareness or familiarity with prescribing guidelines and clinical benefits of certain original biologic drugs. This can result in underutilization or hesitation in prescribing these therapies.

- Lack of specific training and education programs for physicians regarding the latest advancements in original biologic drugs can impact their knowledge and confidence in prescribing them.

6. Patient Education and Understanding:

- Patients may have limited knowledge about the availability and benefits of original biologic drugs. For instance, patients with chronic diseases like rheumatoid arthritis may not be aware of the benefits of newer biologic treatments over traditional therapies.

- Lack of patient education about the appropriate use and potential side effects of original biologic drugs can lead to hesitancy or misconceptions among patients, affecting their willingness to pursue these therapies.

These specific examples illustrate how cost, limited healthcare coverage, regulatory barriers, limited local manufacturing, physician awareness, and patient education can act as barriers to patient access to original biologic drugs in India.

Healthcare impact of inadequate access and availability of biologic drugs in India:

The inadequate access and availability of biologic drugs in India can have several significant healthcare impacts: 

Suboptimal Disease Management: Biologic drugs often provide highly effective and targeted treatments for complex diseases such as cancer, autoimmune disorders, and rare genetic conditions. The lack of access to these therapies can result in suboptimal disease management, leading to poorer patient outcomes, increased disease progression, and reduced quality of life for affected individuals.

Delayed or Incomplete Treatment: Inadequate access to biologic drugs can result in delays or interruptions in treatment. For chronic or progressive diseases, timely initiation and consistent use of these therapies are critical. Delayed or incomplete treatment can compromise the effectiveness of interventions, leading to prolonged disease activity, exacerbation of symptoms, and potential irreversible damage in some cases.

Increased Healthcare Burden: Without access to appropriate biologic therapies, patients may require more frequent hospitalizations, emergency room visits, or other healthcare interventions to manage their conditions. This can place an additional burden on healthcare systems, leading to increased healthcare costs and strain on resources.

Reduced Treatment Options: Biologic drugs often represent the most advanced and effective treatments available for certain diseases. Inadequate access to these therapies limits treatment options for patients, forcing them to rely on less effective or outdated treatments. This restricts the ability of healthcare providers to offer the best available care to patients, potentially leading to compromised treatment outcomes.

Health Inequity: Inadequate access to biologic drugs can exacerbate health inequities in India. Patients from lower socioeconomic backgrounds or those without sufficient insurance coverage may face greater barriers to accessing these expensive therapies. This can result in disparities in healthcare outcomes, with some individuals being unable to afford or access the best available treatments for their conditions.

Impact on Research and Innovation: Inadequate access to biologic drugs can hinder clinical research and innovation in India. Limited availability may reduce opportunities for conducting clinical trials and studying the effectiveness of these therapies in the local population. This, in turn, can hamper the development of new treatments and advancements in healthcare.

Addressing the inadequate access and availability of biologic drugs is crucial to ensure equitable healthcare outcomes, optimize disease management, and reduce the burden of complex diseases in India.  

Increasing need for biosimilar drugs in India and issues involved:

From the above perspective, increasing the availability of biosimilar drugs in India is crucial. Fostering competition may improve affordability. Thereby, it would increase access to essential therapies – bridging treatment gaps, disease management, healthcare system sustainability and foster market competition and innovation.

However, it can ensure that patients receive appropriate and effective treatments while addressing the healthcare challenges faced by a diverse population, only when some key barriers created for biosimilar drug entry, besides patent thickets, are also adequately addressed. One such way is creating a global synergy in this space by collaborating with MNC pharma – having deep pockets and other requisite wherewithal.

Some global synergy is evident in this critical healthcare space:

The good news in this space has started flowing. There have been several collaborations between multinational pharmaceutical companies (MNCs) and domestic Indian drug companies to develop even high potential interchangeable biosimilar drugs in India. Here are a few examples:

- Biocon and Mylan: Biocon has collaborated with Mylan, a global pharmaceutical company, to develop and market biosimilar products. This collaboration has resulted in the development and approval of biosimilar drugs such as Trastuzumab (Herceptin) and Adalimumab (Humira) in India. 

- Dr. Reddy’s Laboratories and Merck: Dr. Reddy’s Laboratories, an Indian multinational pharmaceutical company, entered into a collaboration with Merck & Co., a global pharmaceutical company, to develop biosimilar versions of biologic drugs. This collaboration has resulted in the development and launch of biosimilars such as Pegfilgrastim (Neulasta) and Rituximab (Rituxan) in India.

- Cadila Healthcare and Novartis: Cadila Healthcare, an Indian pharmaceutical company, collaborated with Novartis, a multinational pharmaceutical company, to develop and manufacture biosimilars. This collaboration has resulted in the development of biosimilar drugs such as Rituximab (Ritucad) and Bevacizumab (Bevatas) in India.

These are just a few examples of collaborations between MNCs and Indian drug companies in the field of interchangeable biologic drugs. The landscape of collaborations and partnerships in this area is dynamic, and there may be more ongoing collaborations between companies to develop and commercialize biosimilars in India.

Conclusion:

Overall, patient access to biosimilar drugs in India is crucial for ensuring affordable and comprehensive healthcare, improving patient outcomes, and promoting a competitive pharmaceutical market. It helps address the challenges of access and affordability of biologic drugs, ultimately benefiting the well-being of patients across the country – promoting healthcare equity, and the sustainability of the healthcare system in the country. But patients need more…much more.

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.

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.

 

 

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.

 

Universal Health Coverage: The Only Alternative To Drug Price Control in India?

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Aggressive drug pricing is becoming a burning issue in the healthcare space, across the world. The raging debate continues in India too, fueled by many factors.

In this context, it was quite interesting to note, on July 15, 2015, the Supreme Court of India asked the Government to analyze and explain why the controlled price of essential medicines has been fixed at a high level, depriving the poor from getting life-saving drugs at reasonable rates.

Consequently, the Government was compelled to have a relook at the allegedly ‘flawed’ National Pharmaceutical Pricing Policy 2012 (NPPP 2012) and the subsequent Drug Price Control Order 2013 (DPCO 2013) forming an inter-ministerial committee to work out a more robust alternative.

Even thereafter, on November 03, 2015, the editorial column of a business daily concluded by advocating, “excessive price control may lead to a shortage of crucial medicines and a gray market.” The editorial has not elaborated though, what it means by “excessive price control,” despite the fact, the current span of drug price control is just around 20 percent of the domestic Indian Pharmaceutical Market.

The most intriguing part in this editorial is, to make affordable health care in general and drugs in particular available to all, though it broached on some ideas in a patchy way, did not suggest any comprehensive pan-India solution, as a viable alternative. It just wrote against DPCO, which too seems to be off the cuff, as many believe.

Such blatant advocacy against DPCO, without being overarching solution centric, could jeopardize patients’ health interests in India. This is primarily because, ‘Out of Pocket’ expenditure on drugs is one of the highest in India, even as compared to its neighboring countries, with very low per capita income.

I discussed in this Blog similar subject on July 13, 2015 in my article titled, “India: Tops The GDP Growth, Remains At The Bottom On Health Care”.

Would abolition of DPCO be foolhardy? 

Further, the above editorial comment on the above  business daily that “excessive price control may lead to a shortage of crucial medicines and a gray market,” appears hypothetical and not fact based, as many experts in this field have articulated quite in contrary.

Many believe, the bogey that advocates ‘price control causes drug shortages’ is industry sponsored. Whether it is right or wrong, may be a contentious issue. Nevertheless, there is no robust evidence that price control causes drug shortages.

At the same time, this is also true that some price controlled drugs under DPCO 1995 were discontinued by the respective manufacturers. The key reason for the same is product obsolescence, as those drugs were old and newer alternatives were in the market. Those are really product value and prescription demand related issues. To the best of my knowledge, not a single modern drug, has ever faced permanent shortages due to the price control in India. Moreover, there are robust provisions under DPCO 2013 to deal with such artificial drug shortages, as and when happen.

Moreover, after the announcement of Ceiling Prices of DPCO 2013 products, when wholesaler’s margins were initially revised downwards by a number of manufacturers, some wholesalers agitated and refused to buy those drugs causing some shortages. This dispute was mutually resolved since then, jointly by the drug manufacturers and pharma wholesalers. There have been no reported shortages of DPCO 2013 drugs, thereafter.

Be that as it may, I reckon, advocacy by any responsible entity to abolish DPCO in India without suggesting an effective alternative, such as, putting in place a public funded Universal Health Care (UHC) mechanism, would be foolhardy. We have a large number of functioning examples of UHC, across the world, including the OECD and BRICS countries, which makes a policy mechanism like DPCO almost irrelevant.

What happens when ‘no holds barred’ drug pricing is allowed?  

Recent incidences of ‘no holds barred’ drug pricing in the largest free-market economy of the world – the United States, have started attracting ire of even the more affluent and mostly health insured American citizens too.

As reported by the Boston Globe on October 16, 2015, this is happening in both patented and generic medicines. A few examples, out of many, of some recent jaw dropping aggressive drug pricing are as follows:

  • Average price of a new cancer drug costs around US$ 100,000 a year
  • A new hepatitis C drug costs US$84,000 for a course of 12-week treatment
  • A generic tetracycline price was increased by 70 fold just within a year
  • 5000 percent-plus increase on Turing Pharmaceuticals’ generic Daraprim (pyrimethamine) ant-parasitic tablets

Moreover, on November 6, 2015, The Wall Street Journal reported that three US pharma majors – Eli-Lilly, Merck and Valeant have received inquiries about drug pricing from the Justice Department of the US Government.

Giving an example, the report stated that for the nine months ended September 30, sales of the asthma drug Dulera inhalers (containing a combination of formoterol and mometasone) of Merck, rose 17 percent from the year-earlier period to US$383 million.

Is the dictum ‘competition controls prices of generic drugs’ just a myth?

Besides many other examples, the last two of the above four points on 70 fold and 5000 percent price increase for two old generic drugs – tetracycline and pyrimethamine, respectively, in the world’s largest free-market economy, suggests that ‘competition fails to control even generic drug prices’ for various other reasons. The National Pharmaceutical Pricing Authority (NPPA) of India has already termed this phenomenon as ‘market failure’ for medicines. 

Adding to it, Elsevier Clinical Solutions reported recently in a White Paper titled, “The Impact of Rising Generic Drug Prices on the U.S. Drug Supply Chain”, as follows:

“Over the past two years, the pharmacy industry has seen unprecedented increases in the prices of generic drugs, causing unexpected cost increases for payers and consumers, and spurring an investigation by the United States Congress.”

A recent survey:

More recently, in October 2015, ‘Kaiser Health Tracking Poll’ of the ‘Kaiser Family Foundation’ of the United States reported that the affordability of prescription drugs continues to be at the top of the public’s priority list for the President and Congress in America. In this study, 77 percent of Americans identified the increasing prices of prescription drugs as their number one health concern.

The top two priorities by majorities across political parties, were reported as follows:

  • Making sure that high-cost drugs are affordable to those who need them
  • Government action to lower prescription drug prices

Following this report, on November 03, 2015, the ‘Committee on Oversight & Government Reform’ of the U.S. House of Representatives, by a ‘Press Release’, announced that “Top House Democrats Launch Affordable Drug Pricing Task Force.” The members of the newly formed Task Force will suggest meaningful action to combat the skyrocketing costs of pharmaceuticals in the United States, as captured in the survey of the nonpartisan Kaiser Family Foundation.

Does India want to jump into this quagmire? 

If DPCO is abolished India because of intense, both direct and indirect advocacy, would India have no alternative but to jump into this quagmire of allowing free-drug pricing to pharma players?

70 fold and 5000 percent obscene price increase in a year for branded generics may not be possible in India, but for non-schedule drugs, there is no cap on the fixation of the launch price either. Any drug manufacturer can first fix a high launch price and then can go for 10 percent price increase every year, putting public health interest in jeopardy. That’s why inter-brand price difference for the same drug molecule in India varies so much and has attracted the attention of even the NPPA.

The unfinished agenda:

There is no denying of the fact that even DPCO is not a comprehensive mechanism to offer affordable health care to all. It is meant primarily for the essential drugs in the prevailing environment, when the out of pocket drug expenditure hovers around 70 percent, being one of the highest in the world.

To offer a viable mechanism for affordable health care to all, India expressed its interest towards Universal Health Coverage (UHC) in 2010, when the erstwhile Planning Commission of India convened a High Level Expert Group (HLEG) to work out a road map for UHC under the chairmanship of Dr. K. Srinath Reddy, the physician of international repute. UHC has still remained an unfinished agenda in the health care space of India.

At that time the HLEG made some important recommendations in its report for effective implementation, the key ones being the following: 

  • Increasing public financing from the current 1.2 percent of the Gross Domestic Product (GDP) to at least 2.5 percent.
  • Outlined an essential health care package for provision through tax funding, supplemented by employer-provided insurance
  • Free provision of essential drugs and diagnostics.
  • Emphasized prioritized funding for primary health care, with efficient links to secondary and tertiary care. 
  • Services were to be delivered jointly by strengthened public facilities and contracted private providers. 
  • Reforms were suggested for improving the health care workforce, strengthening of regulatory systems for quality assurance, and improving governance and accountability. 

Change in Government puts UHC back to square one? 

Meanwhile, the change of national Government in May 2014, gave a new perspective to the debate over UHC. The incumbent Government that had already promised and announced a “National Health Assurance,” released a draft National Health Policy (NHP) in January 2015 for public discourse.

The NHP outlines a broad framework for reform of the health care system in India. The new policy, besides others, clearly recommends the following:

  • Enactment of citizens ‘Right to Health’ through parliamentary legislation
  • Allows states to decide the services that would fall under ‘Right to Health’
  • Both public- and private-sector providers would be engaged to deliver the service package, which would be paid for by government-funded health insurance schemes
  • The states will have greater freedom in designing and delivering health programs

As the union government has already agreed to increase the states’ share of central tax revenues from 32 percent to 42 percent and transferred the responsibility for funding and implementing welfare schemes to the states, it should also identify and assign to them specific responsibilities for effective health care systems against measurable parameters.

Although the final version of the NHP has not yet been made public and adopted just yet, it will need firm political and budgetary commitment for resource allocation both by the Union and the State governments.

Current impediment to UHC:

Implementation of UHC calls for increasing public health expenditure significantly, from the current 1.2 percent to around 2.5 percent, may be over a period of five years. However, immediate increases in public financing for UHC may get impeded by the Government priority on fiscal deficit reduction, which is likely to continue in the immediate future too

Possible alternative:

As Dr. Srinath Reddy suggested in a paper titled, “India’s Aspirations for Universal Health Coverage”, published in New England Journal of Medicine, July 2, 2015:

“Health can, however, be positioned prominently in other new, well-funded government schemes such as:

  • The “Clean India” Mission, focused on sanitation and reducing air pollution,
  • The Smart Cities Project, which deploys information technology for urban development and service delivery.

Nevertheless, it may take years for the right mix of political will, financial resources, and health system capacity to deliver on the full promise of Universal Health Care.”

Assuming continuity of this situation in the near term, UHC for India is not visible anywhere near the horizon, not just yet.

Conclusion:

Non availability of affordable health care for all, including drugs, keeps bothering a vast majority of population in the country. Ironically, people feel its absence, mostly when the concerned individual or his/her dependents or any near and dear ones falls sick afflicted by serious ailments such as cancer or any other serious chronic disease.

This serious handicap for the nation has remained a key retarding factor in its attaining much desired sustainable rapid economic growth objectives, primarily for the following reasons:

  • Per capita income is very low compared to the size and other resources of the country
  • Public expenditure for health has still remained one of the lowest in the world
  • Fragile public health care infrastructure and delivery systems
  • No ‘Universal Health Coverage’ in place
  • Just 16% of the Indian population has access to free or partially-free health care
  • Comprehensive private health care is expensive and beyond reach of a vast majority
  • One of the highest ‘Out of Pocket’ expenditure on health, including drugs
  • Market failure for most drugs, where competition does not work
  • In terms of ‘Purchasing Power Parity’ together with ‘Per Capita Income’ drug prices are not low in India, as have been made out to be.

In a situation like this, when in the absence of UHC, total average ‘out of pocket’ expenditure on health is around 65 percent, and around 70 percent of which is on drugs, there does not seem to be any scope to abandon DPCO in India, just yet, for public health interest.

Any possible decision of the Government to abandon DPCO is also unlikely to pass the acid test of intense scrutiny of the Supreme Court either, to uphold public health interest. This makes me believe that a well functioning ‘Universal Health Coverage’ is the only alternative to ‘Drug Price Control’ in India, if at all.

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.

Unsustainable New Cancer Drug Prices: Resolution Remains A Far Cry

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Prices of new drugs for the treatment of life-threatening ailments, such as cancer, are increasingly becoming unsustainable, across the world, and more in India. As articulated by the American Society of Clinical Oncology in 2014, this is primarily due to the fact that their prices are disconnected from the actual therapeutic value of products.

Today, a very large number of poor and even the middle-income patients, who spend their entire life-savings for treatment of a disease like cancer, have been virtually priced out of the patented new drugs market.

The plights of such patients are worse in India and would continue to be so, especially when no trace of Universal Health Care/Coverage (UHC) is currently visible anywhere near the healthcare horizon of the country.

I discussed about the recent decision of the Government for shelving UHC in my recent Blog Post titled, “Would Affordable ‘Modicare’ Remain Just A Pipe Dream In India?”

Irresponsible pricing?

To highlight this point, I shall quote from the research paper titled, “Five Years of Cancer Drug Approvals, Innovation, Efficacy and Costs” published in JAMA Oncology dated April 02, 2015. This report states that just one year’s cost of treatment with a patented new cancer drug now routinely exceeds US$ 100,000. It is much known today that the medical bills for cancer treatment have become the single largest cause of personal bankruptcy, in many countries of the world.

The issue is even more impactful and heart wrenching in India, as with much lower per capita income, compared to the global median, a cancer patient pays around the same price for the same patented drugs in the country. Much talked about Nexavar of Bayer, has been a good example.

The above report underscores, the big global pharma players still vigorously contend to establish that the high cost of drugs is required to support their research and development efforts. However, none would possibly deny the hard data that, when costs and revenues are balanced, the pharmaceutical industry generates high profit margins.

On a lighter vain – the fact that the richest person in India is a pharma player of ‘low price generic medicines’ vindicates this point.

The latest report on pharma R&D costs:

In a ‘Press Release’ of November 18, 2014, Tufts Center for the Study of Drug Development announced, “Cost to develop and win marketing approval for a New Drug is US$2.6 Billion”.

This is around 2.5 times more than its previous estimate published in 2003, which reads as US$802 million.

Although the study is not publicly available, neither has it been peer reviewed, it does reflect that above overall inflation rate, pharma R&D costs are reportedly going up at an annual rate of around 8 percent!

Even if the R&D cost of US$2.6 Billion is accepted as correct to justify high prices of patented drugs, one should note that this figure is applicable only to those types of New Chemical Entities (NCE) that did not receive any outside funding in their developmental process, such as, from the National Institutes of Health (NIH).

It is worth noting, such types of NCEs account for less than one-sixth of the annual new drugs approval in the United States.

Interestingly, Tufts Center receives its funding from the pharmaceutical industry, according to reports.

When is a high cost of medicine defendable?

According to some, high price may be justified, if novel products offer significant benefits to patients giving rise to indirect quantifiable economic value through restoration of health of patients.

This is understandable, as those patented drugs represent significant and well-accepted pharmacological advances over the existing ones, offering novel mechanisms of actions for better treatment value through ‘high-risk-high-cost’ research.

Price is a function of the value that a drug offers:

The price of any drug must be a function of the value that it offers to the patients. Not just the cost of its innovation, irrespective of the fact, whether it is a ‘New-Class (Novel)’ or ‘Next-in Class’ or even a ‘Me-too’ NCE.

The above April 2015 research report published in JAMA Oncology, investigated at length, whether novelty of medications or their relative benefits dictated drug pricing.

In that endeavor, the authors found out that from January 1, 2009, to December 31, 2013, the USFDA approved 51 drugs in oncology for 63 indications. During this period, 9 drugs received more than 1 approved indication.

The study observed:

Of these 51 drugs:

- 21 (41 percent) exert their effect via a novel mechanism of action

- While 30 (59 percent) are next-in-class drugs

Despite this fact, there was no difference in the median price per year of treatment between the 30 next-in-class drugs (US$119, 765) and the 21 novel drugs (US$116, 100).

Global cancer market is soaring high fuelled by astronomical prices:

According to a report that quotes an official of IMS Health, the overall cost for cancer treatments per month in the United States is now US$10,000, up from $5,000 just a year ago. At the same time, according to a 2014 study by the IMS Institute for Healthcare Informatics, global oncology spending has hit US$91 billion in 2013, and despite patent cliff is growing at 5 percent annually.

None likes nightmarish cancer drug-pricing trend:

None likes this worrisome drug-pricing trend, not even in the developed world. God forbid, just one cancer patient in the family can drag even a middle class household to the poverty level, especially in a country like India, where Out of Pocket (OoP) expenses for health hovers around 70 percent and Universal Health Coverage still remains a pipe dream.

Payers, including governments and private insurers, in the top cancer markets such as the United States and Europe, are trying hard to bring the cancer drug prices to a reasonable level through regulatory pressure of various kinds and forms. For example, National Institute for Health and Care Excellence (NICE) in the United Kingdom and the regulators for drug cost-effectiveness in other large European countries, are coming hard on patented new cancer drugs with small improvements in survival time but priced much higher than the existing ones.

Even many private insurers in those countries are now raising questions about the additional value offerings in quantifiable terms, especially for the new cancer drugs and other treatments for life-threatening ailments, such as hepatitis C. To give an example, in late 2014, Express Scripts in America negotiated hard for an exclusive deal with AbbVie to provide its hepatitis C treatment Viekira Pak over Gilead’s exorbitantly priced Sovaldi.

Action by the doctors outside India:

In 2012, doctors at the Memorial Sloan-Kettering Cancer Center reportedly announced in ‘The New York Times’ that their hospital would not be using Zaltrap, a newly patented colorectal cancer drug from Sanofi. This action of the Sloan-Kettering doctors compelled Sanofi to cut Zaltrap price by half.

Unlike in India, where prices of even cancer drugs do not seem to be a great issue with the medical profession, just yet, the top cancer specialists of the American Society of Clinical Oncology are reportedly working out a framework for rating and selecting cancer drugs not only on their benefits and side effects, but prices as well.

In a recent 2015 paper, a group of cancer specialists from Mayo Clinic also articulated, that the oft-repeated arguments of price controls stifle innovation are not good enough to justify unusually high prices of such drugs. Their solution for this problem includes value-based pricing and NICE like body of the U.K.

This Interesting Video from Mayo Clinic justifies the argument.

Tokenism by the Indian Government:

India sent a signal to global pharma players about its unhappiness of astronomical pricing of patented new cancer drugs in the country on March 9, 2012. On that day, the then Indian Patent Controller General issued the first ever Compulsory License (CL) to a domestic drug manufacturer Natco, allowing it to sell a generic equivalent of a kidney cancer treatment drug from Bayer – Nexavar, at a small fraction of the originator’s price.

In this context, it won’t be out of place recapitulating that an article published in a global business magazine on December 5, 2013 quoted Marijn Dekkers, the CEO of Bayer AG saying: “Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western Patients that can afford it.”

Whether, CL is the right approach to resolve allegedly ‘profiteering mindset’ at the cost of human lives, is a different subject of discussion.

Be that as it may, India did send a very strong signal in this regard, which some construe as mere tokenism. Nonetheless, this action of the Indian Government shook the global pharma world very hard, that it would find difficult to forget in a foreseeable future.

Government’s determination to make it happen is still eluding:

The headline of this article would probably invoke an instant negative response from my friends in the industry, an understandably so, expressing… ‘Hey, are you talking against innovation and suggesting one more regulator for the heavily regulated pharma industry?’ 

I would very humbly say, no…I am suggesting neither of those two, but requesting to give shape to a very important decision already taken by the Government on this issue, in a meaningful way. That decision has been scripted in Para 4.XV of the National Pharmaceutical Pricing Policy 2012 (NPPP 2012) and was notified on December 07, 2012.

On ‘Patented Drugs Pricing’, it categorically states as follows:

“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 based on the recommendation of this committee.”

The following long drawn unproductive events would vindicate, beyond even an iota of doubt, that a strong determination to make it happen, by even by the new Government, is still eluding by far.

Is this committee ‘Jinxed’?

To utter dismay of the patients and their well-wishers, the above committee took over six years after it was formed to submit its report.

It recommended ‘Reference Pricing’ for the Patented Drugs in India, after adjusting against India’s Gross National Income and Purchasing Power Parity. The suggested ‘Reference Countries’ were UK, Canada, France, Australia and New Zealand, where there exist a strong public health policy, together with tough bargaining power of the governments for drug price negotiations.

However, our Government found this report useless for various reasons and dissolved the panel. The grapevine in the corridors of power whispers, it could possibly be due to intense pressure from the global pharma players and their powerful lobby groups.

Interestingly, again by the end of 2013, the Department of Pharmaceuticals (DoP) set up a brand new inter-ministerial committee with four representatives each from the Ministry of Commerce and Industry, Ministry of Health and Family Welfare, National Pharmaceutical Pricing Authority (NPPA) and one from the DoP to resolve the same issue of ‘Patented Drugs Pricing’ in India.

Unfortunately, a serious issue of this magnitude has still remained unresolved, even under the new seemingly dynamic Government, till date. There were media reports though, just prior to the Union Budget in January 2015, that ‘the Government may negotiate prices of patented medicines with their manufacturers before allowing pharmaceutical companies to launch them in India.’

The scenario is still far from even sketchy. A lurking fear, therefore, creeps into the minds of many: Is this committee on ‘Patented Drugs Pricing’ jinxed or incompetent or has deliberately been kept non-functional under tremendous external pressure on pricing of patented drugs?

The way forward:

To find an implementable ‘Patented Drug Pricing Model’ soon, the new committee of the Government should consider Pharmacoeconomics Based or Value-Based Pricing (PBP/VBP) Model for the country.

Pharmacoeconomics, as we know, is a scientific model of setting price of a medicine commensurate to the economic value of the drug therapy.  Pharmacoeconomics principles, therefore, intend to maximize the value obtained from expenditures towards medicines through a structured evaluation of products costs and disease outcomes.

Thus, PBP/VBP basically offers the best value for money spent. It ‘is the costs and consequences of one treatment compared with the costs and consequences of alternative treatments’.

To the best of my knowledge, the Public Health Foundation of India, spearheaded by well-reputed internationally acclaimed physician – Dr. Srinath Reddy, has requisite expertise in this area and to build on it further, as required by the committee.

This new model would help establishing in India that the price of any drug is always a key function of the value that it offers and not of the so called ‘high cost of innovation’, irrespective of whether it is a ‘New-Class (Novel)’ or ‘Next-in Class’ or even ‘Me-Too’ NCE.

The concept is gaining ground: 

The concept of ‘Value-Based Pricing’, has started gaining ground in the developed markets of the world, prompting the pharmaceutical companies generate requisite ‘health outcome’ data using similar or equivalent products.

Cost of incremental value that a product delivers over the existing ones, is of key significance and should always be the order of the day. Some independent organizations such as, the National Institute for Health and Clinical Excellence (NICE) in the UK have taken a leading role in this area.

Conclusion:

Warren Buffet – the financial investor of global repute once said, “Price is what you pay. Value is what you get.” Unfortunately, this dictum is not applicable to the consumers of high priced life saving drugs, such as, for cancer.

Price tags of most of the patented new cancer drugs, do not seem to give any indication that the pharma players believe in this pricing model, even remotely. As JAMA Oncology has established in their recent research study, there is no difference in the median price of per year of treatment between ‘Next-in-Class’ and ‘Novel Drugs’.

Thus far, India has been able to address this issue either through section 3(d) or Compulsory Licensing (CL) provisions of its Patents Act. As the saying goes, ‘proof of the pudding is in the eating’, the net fall-out of these measures has been demonstrably profound. For example, the global pharma giant Gilead has entered into voluntary License (VL) agreements with several local companies to market in India one of the most expensive products of the world – Sovaldi, at a small fraction of its original price of US$1,000/tablet. 

That said, effective long-term resolution of ‘Patented Drugs Pricing’ issue, in my view, is long overdue in India, especially for the treatment of life-threatening diseases, such as cancer. This has been necessitated by the fact that in many cases, therapeutic benefits of most of these drugs are not commensurate to their high costs.

The provision for ‘Patented Drugs Pricing’ has already been made in the NPPP 2012, though not implemented, as yet. While working out an implementable mechanism for the same, the new committee of the present Government may consider ‘Pharmacoeconomics Based or Value-Based Pricing (PBP/VBP) Model’ to effectively resolve this crucial issue. The specialized group that will operate this system could be a part of the National Pharmaceutical Pricing Authority (NPPA) of India.

The struggle for life in the fierce battle against dangerous ailments, without having access to new life-saving drugs, has indeed assumed a mind-boggling dimension in India, especially in the absence of Universal Health Coverage. It would continue to remain so, unless the new Government demonstrates its will to act, putting in place a transparent model of patented drugs pricing, without succumbing to any power play or pressures of any kind from vested interests.

The bottom-line is: It has to happen soon…very soon. For patients’ sake.

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.

With Free Medicines In, Would The New Government Revisit ‘Universal Health Coverage’ Soon?

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Friday last, the new Union Health Minister Dr. Harsh Vardhan reportedly announced that the his ministry would soon start work on distributing free medicines through public hospitals across the country.

For this purpose the Minister would soon call a meeting of the State Health Ministers to integrate this policy with the National Health Mission (NHM). The said meeting will be held under the framework of the Central Council of Health (CCH), which also includes professional experts.

A commendable beginning:

This decision of Dr. Harsh Vardhan would revive a plan that the former Prime Minister Manmohan Singh had promised in his Independence Day speech to the nation in 2012, but could not be implement due to paucity of adequate fund. Implemented effectively, the above scheme has the potential to significantly reduce the Out-of-Pocket (OoP) expenditure on healthcare in India.

According to a 2012 study of IMS Consulting, expenditure on medicines still constitute the highest component of OoP expenses in OP care, though its percentage share has decreased from 71 percent in 2004 to 63 percent in 2012.  Similarly for IP care, the share of medicines in total OoP has also marginally decreased from 46 percent in 2004 to 43 percent in 2012.

However, it is worth noting that still 46 percent of patients seeking healthcare in public channels purchase medicines from private channels for non-availability. The new scheme hopefully would resolve this issue with sincerity, care and a sense of purpose.

For early success in this area, experts recommend that up and running Tamil Nadu and Rajasthan models of this scheme, which are most efficient and cost effective, should be replicated in rest of the states.

Recently announced drug procurement system through Central Medical Services Society (CMSS) after hard price negotiation with the manufacturers, and distribution of those drugs free of cost from the Government hospitals and health centers to the patients efficiently, could further add value to the process.

The cost and span:

Planning Commission estimated that a countrywide free generic drug program would cost Rs 28,560 Crore (roughly around US$ 5 Billion) during the 12th Five-Year Plan period. The Centre will bear 75 percent of the cost while the states would provide the rest. Under the previous government plan, 348 drugs enlisted in the National List of Essential Medicines 2011 (NLEM 2011) were to be provided free at 160,000 sub-centers, 23,000 Primary Health Centers, 5,000 community health centers and 640 district hospitals.

“Universal Health Coverage” – Still remains the holistic approach:

That said, despite its immense importance, “distribution of free medicines” still remains just one of the key elements of Universal Health Coverage (UHC). It is expected that the new government would take a holistic view on the UHC agenda, sooner, to provide comprehensive healthcare services, including preventive care, to all citizens of the country.

According to another recent media report, the new Health Minister has already expressed a different viewpoint on this subject. Dr. Harsh Vardhan has reportedly said:

“I am not in favor of taxpayers’ money being used to push a one-size-fits-all health policy. From this morning itself, I have started contacting public health practitioners to know their minds on what should be the road ahead.”

Without deliberating much on the roll out of UHC as of now, the Minister promised that the government would work to provide ‘health insurance coverage for all’ through a National Insurance Policy for Health.

This statement is significant, because until recently, the ‘high level’ understanding was that the country, at least directionally, is in favor of public funded UHC, which was defined 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”.

The groundwork started with ‘The HLEG Report‘ :

Just to recapitulate, in October 2010, the Planning Commission of India constituted a ‘High Level Expert Group (HLEG)’ on UHC under the chairmanship of Dr. Prof. K. Srinath Reddy, President of the ‘Public Health Foundation of India (PHFI)’. The group was mandated to develop a framework for providing easily accessible and affordable health care to all Indians.

HLEG in its submission had suggested that the entire scheme would be funded by the taxpayers’ money for specified sets of healthcare services and for additional services commensurate health insurance coverage may be purchased by the individuals. Accordingly, to ensure a modest beginning of the UHC, in the 12th Five Year Plan Period, public expenditure on health was raised to 2.5 percent of the GDP.

UHC guarantees access to essential free health services for all:

Because of the uniqueness of India, HLEG proposed a hybrid system that draws on the lessons learnt from within India, as well as other developed and developing countries of the world.

The proposal underscored that UHC will ensure guaranteed access to essential health services for every citizen of India, including cashless in-patient and out-patient treatment for primary, secondary and tertiary care. All these services will be available to the patients absolutely free of any cost.

UHC provides options to patients:

Under the proposed UHC, all citizens of India would be free to choose between public sector facilities and ‘contracted-in’ private providers for healthcare services. It was envisaged that people would be free to supplement the free of cost healthcare services offered under UHC by opting to pay ‘out of pocket’ or going for private health insurance schemes.

What exactly is the new Health Minister mulling?

If the new Health Minister is mulling something different to provide similar healthcare coverage to Indians, let me now explore the other options adopted by various nations in this area.

As we know, UHC is a healthcare system where all citizens of a country are covered for the basic healthcare services. In many countries UHC may have different system types as follows:

  • Single Payer: The government provides insurance to all citizens.
  • Two-Tier: The government provides basic insurance coverage to citizens and allows purchase of additional voluntary insurance whenever a citizen wants to.
  • Insurance Mandate: The government mandates that insurance must be bought by all its citizens, like what happened in the USA in 2010 under ‘Obamacare’.

The Global scenario:

As per published reports, all 33 ‘developed nations’ (OECD countries) have UHC in place. America was the only exception, till President Barack Obama administration implemented its ‘path breaking’ healthcare reform policy in 2010 against tough political opposition.

India is already too late in providing UHC:

Based on an article titled, ‘ Analyzing our economy, government policy and society through the lens of cost-benefit’ published in ‘True Cost’, following is the list that states in which countries the UHC is currently in place and from when:

Country Start Date of Universal Health Care System Type
Norway 1912 Single Payer
New Zealand 1938 Two Tier
Japan 1938 Single Payer
Germany 1941 Insurance Mandate
Belgium 1945 Insurance Mandate
United Kingdom 1948 Single Payer
Kuwait 1950 Single Payer
Sweden 1955 Single Payer
Bahrain 1957 Single Payer
Brunei 1958 Single Payer
Canada 1966 Single Payer
Netherlands 1966 Two-Tier
Austria 1967 Insurance Mandate
United Arab Emirates 1971 Single Payer
Finland 1972 Single Payer
Slovenia 1972 Single Payer
Denmark 1973 Two-Tier
Luxembourg 1973 Insurance Mandate
France 1974 Two-Tier
Australia 1975 Two Tier
Ireland 1977 Two-Tier
Italy 1978 Single Payer
Portugal 1979 Single Payer
Cyprus 1980 Single Payer
Greece 1983 Insurance Mandate
Spain 1986 Single Payer
South Korea 1988 Insurance Mandate
Iceland 1990 Single Payer
Hong Kong 1993 Two-Tier
Singapore 1993 Two-Tier
Switzerland 1994 Insurance Mandate
Israel 1995 Two-Tier
United States 2010 Insurance Mandate

In-sync with the concept, probably with different means:

From the above statement of the new Health Minister, it appears that to provide healthcare coverage to all citizens of India, his ministry would work towards developing a National Health Insurance Policy. He also expressed that his ministry wants to focus on preventive healthcare.

Preventive healthcare being an integral part of UHC, it could well be that Dr. Harsh Vardhan wants to follow ‘Single Payer’ type of UHC system type.

Another school of thought:

However, another school of thought opines that a government owned efficient public healthcare system with adequate infrastructural facilities provides healthcare to patients almost free of cost as compared to the “insurance mandated” one.

This is mainly because, to address respective healthcare needs currently the patients have either or a mix of the following two choices:

  • Use public health facilities: Available virtually at free of cost if accessible, but quality is mostly questionable.
  • Use private health facilities: Virtually unregulated, much better services, though available mostly at high to very high cost.

Thus, these groups of experts believe that provision of universal health insurance for treatment at the expensive private facilities may not be cost effective even for the government, if these are not adequately regulated with appropriate stringent measures.

In absence of all those measures, the new Health Minister could consider taking a decision in favor of tax-funded UHC, with appropriate budgetary provisions and investments towards improving country’s healthcare infrastructure and its delivery mechanism for all.

Conclusion:

Be that as it may, there is not even an iota of doubt that India needs ‘Universal Health Coverage (UHC)’, like any OECD or other countries of the world for its citizens, sooner. Just distributing free medicines through public hospitals across the country for all, without a holistic approach such as UHC, may not yield desired results.

From the initial deliberations of Dr. Harsh Vardhan, it appears that UHC would soon not just be revisited, but receive a new thrust too, from the no-nonsense minister, probably leaning more towards private participation than with a public funded one, contrary to what was proposed by the HLEG.

Does it matter really? Well…

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 Marketing in India: 10 Chain Events to Catalyze a Paradigm Shift

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In the matured markets of the world pharmaceutical marketing is quite different in many respect as compared to India. Besides doctors, different sets of customer groups like, healthcare providers, patient advocacy groups, pharmacy benefit managers, clinical assessment authorities play various critical roles for use and consumption of branded or generic pharmaceutical products and related healthcare services.

Quite in contrast, even today, individual doctors have continued to remain almost the sole target customers for the pharmaceutical players in India. This is mainly because, by and large, they are the only decision makers for usage of medicines and other healthcare facilities for most of the patients in the country.

Heralding a new paradigm:

As indicated above, though the current pharmaceutical marketing strategies continue to revolve mostly around the doctors, a distinct change, albeit slowly though, is now anticipated within the pharmaceutical marketing space in India.

Gradual emergence of healthcare providers with medical insurance and other related products, patient advocacy groups and standard treatment guidelines, just to name a few, are expected to facilitate heralding a new paradigm in the strategy dynamics of the Indian Pharmaceuticals Market (IPM) in the coming years. These changes will not be incremental in any way, but disruptive and radical in nature, as they will fully evolve.

This process of transformation, mainly driven by Government policy reform measures like, ‘Universal Health Coverage (UHC)’, ‘Free distribution of medicines’, mandatory prescriptions in generic names, could make the current pharmaceutical business strategy models of majority of companies irrelevant and obsolete, in not too distant future.

It is worth noting that the Government will spend around Rs.14,000 Crores (US$ 2.60 billion, approximately) from the year 2014 to 2017 just on medicine purchases at highly negotiated/discounted prices for free distribution to all through Government hospitals and dispensaries.

10 Chain events envisaged: 


In the evolving scenario, following chain events, taking place almost in tandem, in my view, will gradually usher in a new pharmaceutical marketing paradigm in India:

1. In addition to ‘Universal Health Coverage’, there will be a rapid increase in the number of other healthcare providers with innovative, tailor-made and value added schemes for various strata of the society.

2. This will trigger emergence of very powerful groups of negotiators for adopting treatment guidelines, pharmaceutical products usage and other healthcare related services.

3. These groups will have the wherewithal to strongly and significantly influence the doctors in their prescription and other treatment choices.

4. A significant proportion of the products that the pharmaceutical companies will market, a tough price negotiation with the healthcare providers/ medical insurance companies will be inevitable.

5. Consequently, doctors will no longer be the sole decision makers for prescribing drugs and also the way they will treat the common diseases.

6. Pharmaco-economics or Health Technology Assessment (HTA) or outcome based pricing will gradually play an important role in pricing a healthcare products. Drug Price Control Order (DPCO 2013) has already signaled to this direction for a class of products.

7. An integrated approach towards disease prevention will emerge as equally important as treating diseases.

8. A shift from just product marketing to marketing a bundle of value added comprehensive disease management processes along with the product would be the order of the day.

9. More regulatory control measures on pharmaceutical sales and marketing are expected to be put in place by the Government to prevent alleged widespread sales and marketing malpractices in the country.

10. Over the counter (OTC) medicines, especially those originated from natural products to treat common and less serious illnesses, will carve out a sizable share of the market, as appropriate regulations would be put in place, adequately supported by AYUSH. This will be fueled by overall increase in general health awareness of the population.

Trapped in an ‘Archaic Strategy Cocoon’:

Over a long period of time, Indian pharmaceutical industry seems to have trapped itself in a difficult to explain ‘Archaic  Strategy Cocoon’. No holds bar sales promotion activities, with very little of marketing, continue to dominate the ball game of hitting the month-end numbers, even today.

It is high time to come out of this cocoon and confront the ‘writing on the wall’ upfront, if not try to hasten the process of the evolving changes, boldly and squarely. This will require a strategic long term vision to be implemented in an orderly way to effectively convert all these challenges into possible high growth business opportunities.

A differentiated composite value delivery system:

Moreover, in today’s post product patent regime in the country, product pipelines of the domestic Indian companies with new ‘copycat’ versions of patented products have almost dwindled into nothing, making price competition in the market place even more ‘cut throat’.

In such type of changing environment, all pharmaceutical companies will be under tremendous pressure to create and deliver additional, well differentiated and composite value offerings, beyond physical products, to attract more patients, doctors, healthcare providers and others, in and around related disease areas, for business excellence.

Thus, ability to create and effectively deliver well-differentiated composite value offerings, along with the physical products, will separate men from the boys in the high growth pharmaceutical market of India, in the long run.

This could also possibly create an ‘Alibaba Effect’ for the successful ones in search of pots of gold in the pharmaceutical space of India.

New leadership and managerial skill set requirements:

In the new environment, required skill sets for both the leaders and the managers of Indian pharmaceutical companies will be quite different from what they are today. This will not happen overnight though, but surely will unfold gradually.

New skills:

Leaders and managers with knowledge in just one functional area like, R&D, manufacturing, marketing, regulatory, finance are unlikely to be successful without a broad-based knowledge in the new paradigm. To really understand and handle new types and groups of customers, they will need to break the operational silos and be proficient in other key areas of business too.

These professionals will require ensuring:

• Multi-functional expertise by rotating right people across the key functional areas, as far as possible, even with a stretch.

• Ability to fathom and correctly interpret patients’ clinical benefits against cost incurred to achieve the targeted clinical outcomes, especially in areas of new products.

• Insight into the trend of thought pattern of healthcare providers and other customers or influencers groups.

• Speed in decision-making and delivery…more importantly ability to take ‘first time right’ decisions, which can make or mar an important initiative or a commercial deal.

IPM growing fast, can grow even faster: 

India is now one of fastest growing emerging pharmaceutical markets of the world with 3rd global ranking in the volume of production and 13th in value terms. Domestic turnover of the industry is over US$ 13.1 billion in 2012 (IMS) representing around 1 percent of the global pharmaceutical industry turnover of US$ 956 billion (IMS 2011).

Since 1970, Indian pharmaceutical Industry has rapidly evolved from almost a non-entity to meeting around 20 percent of the global requirements of high quality and low cost generic medicines.

Financial reforms in the health insurance sector and more public investments (2.5% of the GDP) in the healthcare space during the 12th Five Year Plan Period will have significant catalytic effect to further boost the growth of the industry.

Stringent regulations and guidelines of the Government in various areas of pharmaceutical business in India are expected to be in place soon. Ability to ensure system-based rigid organizational compliance to those changing business demands in a sustainable way. will determine the degree of success for the pharma players in India.

One such area, out of many others, is the professional interaction of the Medical Representatives with the doctors and other customer groups.

Require a ‘National Regulatory Standard’ for Medical Representatives in India:

Medical Representatives (MRs) currently form the bedrock of business success, especially for the pharmaceutical industry in India. The Job of MRs is a tough and high voltage one, laced with moments of both elation and frustration, while generating prescription demand for selected products in an assigned business territory.

Though educational qualifications, relevant product and disease knowledge, professional conduct and ethical standards vary widely among them, they are usually friendly, mostly wearing a smile even while working in an environment of long and flexible working hours.

There is a huge challenge in India to strike a right balance between the level and quality of sales pitch generated for a brand by the MRs, at times even without being armed with required scientific knowledge and following professional conduct/ ethical standards, while doing their job.

Straying from the right course:

A recent media report highlighted that ‘Indian subsidiary of a Swiss pharma major has run into trouble with some executives allegedly found to be inflating and presenting fabricated sales data for an anti-diabetic drug.’

The report also indicated that officials from mid-management ranks to sales representatives were allegedly involved in those unethical practices. The company has responded to this incidence by saying that the matter is still under investigation.

It is critical for the MRs not just to understand scientific details of the products, their mode of action in disease conditions, precautions and side effects, but also to have a thorough training on how to ‘walk the line’, in order to be fair to the job and be successful.

As MRs are not just salesmen, they must always be properly educated in their respective fields and given opportunities to constantly hone their knowledge and skills to remain competitive. The role of MRs is expected to remain important even in the changing scenario, though with additional specialized skill sets.

Unfortunately, India still does not have a ‘National Code of Conduct or Regulatory Standards’ applicable to the MRs.

Only the clause 4 of ‘The Magic Remedies (Objectionable Advertisement) Act, 1954’ deals with misleading advertisements. It is about time to formulate not only a ‘National Code on Pharmaceutical Marketing Practices’, but also a mandatory ‘Accreditation program’ and transparent qualifying criteria for the MRs for the entire pharmaceutical industry in India, just like many other countries of the world.

‘Central Drugs Standard Control Organization (CDSCO)’ of the Ministry of Health and Family Welfare of the Government of India in its website lists the “Laws Pertaining to Manufacture and Sale of Drugs in India”. However, it does not specify any regulation for the MRs nor does it recommend any standard of qualification and training for them, which is so critical for all concerned.

There are currently no comprehensive national standards for educational qualification, knowledge, ethics and professional conduct for the MRs. In the absence of all these, it is difficult to fathom, whether they are receiving right and uniform inputs to appropriately interact with the medical profession and others in a manner that will benefit the patients and at the same remain within the boundary of professional ethics and conduct.

Thus, a ‘National Regulatory Standard’ for MRs, I reckon, is absolutely necessary in India… sooner the better.

Global pharmaceutical players:

Facing a huge patent cliff, global pharmaceutical companies are now fast gaining expertise in the ball game of generic pharmaceuticals, especially in the developing markets of the world.

In the emerging markets like India, where branded generic business dominates, global pharmaceutical players seem to be increasingly finding it lucrative enough for a sustainable all round business growth.

However, to outpace competition, they too will need to capture the changing dynamics of the market and strategize accordingly without moaning much about the business environment in the country.

On the other hand, if majority of Indian pharmaceutical companies, who are not yet used to handling such changes, are caught unaware of this evolving scenario, the tsunami of changes, as they will come, could spell a commercial disaster, endangering even very survival of their business.

Managing transition:

During ensuing phase of transition in India, pharmaceutical companies would require to:

• Clearly identify, acquire and continuously hone the new skill sets to effectively manage the evolving challenge of change.

• Get engaged, having clarity in the strategic content and intent, with the existing public/private healthcare providers and health insurance companies like, Mediclaim, ICICI Lombard, large corporate hospital chains, retail chain chemists and others, proactively.

• Drive the change, instead of waiting for the change to take place.

• Ensure that appropriate balance is maintained between different types of marketing strategies with innovative ways and means.

Conclusion:

It may not be easy for the local Indian players to adapt to the new paradigm sooner and compete with the global players on equal footing, even in the branded generic space, with strategies not innovative enough and lacking required cutting edges.

In my view, those Indian Pharmaceutical companies, who are already global players in their own rights and relatively well versed with the nuances of this new ball game in other markets, will have a significant competitive edge over most other domestic players.

If it happens, the global-local companies will offer a tough competition to the local-global players, especially, in the branded generic space with greater cost efficiency.

So far as other domestic players are concerned, the fast changing environment could throw a new challenge to many, accelerating the consolidation process further within the Indian pharmaceutical industry.

As the new paradigm will herald, catalyzed by the above 10 chain events, there will be a metamorphosis in the way pharmaceutical marketing is practiced in India. A well-differentiated composite value delivery system would then, in all probability, be the name of the winning game.

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.

 

Health being a basic human right, the proposal for ‘Universal Health Coverage’ augurs well for India

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“The right to health is relevant to all States: every State has ratified at least one international human rights treaty recognizing the right to health. Moreover, States have committed themselves to protecting this right through international declarations, domestic legislation and policies, and at international conferences.”

-  The Factsheet, Office of the United Nations High Commissioner for Human Rights (OHCHR) and the WHO

Universal Health Coverage or Universal Healthcare:

In this context, “Universal Health Coverage (UHC)” is a healthcare system where all citizens of a country are covered for the basic healthcare services. In many countries UHC is also known as “Universal Healthcare” and may have different system types as follows:

Single Payer: The government provides insurance to all citizens.

Two-Tier: The government provides basic insurance coverage to citizens and allows purchase of additional voluntary insurance whenever a citizen wants to.

Insurance Mandate: The government mandates that insurance must be bought by all its citizens, like what happened in the USA in 2010.

Global scenario for UHC:

As per published reports, all 33 developed nations have UHC in place. The United States was the only exception until recently, till President Barack Obama administration implemented the ‘path breaking’ new healthcare reform policy in the country in 2010 against tough political opposition.

The new healthcare reform measures in the US had raised a storm within the local pharmaceutical industry, as well,  at that time for various reasons.

The countries providing UHC:

Based on an article titled, ‘ Analyzing our economy, government policy and society through the lens of cost-benefit’ published in  ‘True Cost’ following is the list of the countries where UHC is currently in place:

Country

Start Date of Universal Health Care

System Type

Norway

1912

Single Payer

New Zealand

1938

Two Tier

Japan

1938

Single Payer

Germany

1941

Insurance Mandate

Belgium

1945

Insurance Mandate

United Kingdom

1948

Single Payer

Kuwait

1950

Single Payer

Sweden

1955

Single Payer

Bahrain

1957

Single Payer

Brunei

1958

Single Payer

Canada

1966

Single Payer

Netherlands

1966

Two-Tier

Austria

1967

Insurance Mandate

United Arab Emirates

1971

Single Payer

Finland

1972

Single Payer

Slovenia

1972

Single Payer

Denmark

1973

Two-Tier

Luxembourg

1973

Insurance Mandate

France

1974

Two-Tier

Australia

1975

Two Tier

Ireland

1977

Two-Tier

Italy

1978

Single Payer

Portugal

1979

Single Payer

Cyprus

1980

Single Payer

Greece

1983

Insurance Mandate

Spain

1986

Single Payer

South Korea

1988

Insurance Mandate

Iceland

1990

Single Payer

Hong Kong

1993

Two-Tier

Singapore

1993

Two-Tier

Switzerland

1994

Insurance Mandate

Israel

1995

Two-Tier

United States

2010

Insurance Mandate

Highest per capita health spending has no relevance to the quality of health services/ outcome, but early implementation of UHC has:

The following table shows, although per capita spending on health is the highest in the US, the number of doctors, nurses and hospital beds per 10,000 population are highest in Cuba, UK and Japan, respectively. Japan also records the highest life expectancy at birth.Thus it appears, by and large, those countries which have an efficient UHC scheme running since quite some time from now are doing better in the health parameters as indicated below, especially, as compared to the US with the highest per capita health spending.

Country

Per capita spending on health (US $)

Doctors/ 10,000 pop

Nurses and midwives/ 10,000 pop

Hospital beds/10,000 pop

Life expectancy at birth
USA

    6719**

26

94

31

78
UK

2815

23

  128**

39

80
Russia

698

43

85

97

66
Japan

2581

21

95

  140**

   83**
Italy

2631

37

72

39

82
Germany

3465

34

80

83

80
France

3420

34

80

73

81
Cuba

674

     59**

74

49

78
China

216

14

10

22

74
Canada

3673

19

101

34

81

** Highest

Source: The Guardian, Data Blog, Facts are Sacred)

The current situation in India:

In October 2010, the Planning Commission of India constituted a ‘High Level Expert Group (HLEG)’ on Universal Health Coverage (UHC) under the chairmanship of the well-known medical professional 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 starts with:

“This report is dedicated to the people of India whose health is our most precious asset and whose care is our most sacred duty.”

The HLEG defined UHC for India 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”.

Ten principles for UHC in India:

Following are the ‘Ten Principles’, which guided the HLEG for the formulation of the recommendations for the UHC in India:

  1. Universality
  2. Equity
  3. Non-exclusion and non-discrimination
  4. Comprehensive care that is rational and of good quality
  5. Financial protection
  6. Protection of patients’ rights that guarantee appropriateness of care, patient choice, portability and continuity of care
  7. Consolidated and strengthened public health provisioning
  8. Accountability and transparency
  9. Community participation
  10. Putting health in people’s hands

UHC guarantees access to essential free health services for all:

Because of the uniqueness of India, HLEG proposed a hybrid system that draws on the lessons learned from within India as well as other developed and developing countries of the world.

UHC will ensure guaranteed access to essential health services for every citizen of India, including cashless in-patient and out-patient treatment for primary, secondary and tertiary care. All these services will be available to the patients absolutely free of any cost.

Under UHC all citizens of India will be free to choose between Public sector facilities and ‘contracted-in’ private providers for healthcare services.

It is envisaged that people would be free to supplement the free of cost healthcare services offered under UHC by opting to pay ‘out of pocket’ or going for private health insurance schemes

HLEG recommends ‘Price Control’ of ‘Essential Medicines’, just like draft NPPP 2011:

In its recommendation no. 3.5.1, HLEG postulated price controls and price regulation especially on essential drugs, which is quite in line with the draft National Pharmaceutical Pricing Policy 2011 (NPPP 2011). The HLEG report says:

“We recommend the use of ‘essentiality’ as a criterion and applying price controls on formulations rather than basic drugs. Direct price control applied to formulations, rather than basic drugs, is likely to minimize intra-industry distortion in transactions and prevent a substantial rise in drug prices. It may also be necessary to consider caps on trade margins to rein in drug prices while ensuring reasonable returns to manufacturers and distributors. All therapeutic products should be covered and producers should be prevented from circumventing controls by creating nonstandard combinations. This would also discourage producers from moving away from controlled to non-controlled drugs. At the same time, it is necessary to strengthen Central and State regulatory agencies to effectively perform quality and price control functions.”

Price control on essential medicines is also in force in China:

Chinese Government has put a cap on the prices of about 300 drugs featuring in their ‘National List of Essential Medicines (NLEM).’ Perhaps following the similar concept both the NLEG and NPPP 2011 have recommended price control of about 348 drugs falling under ‘The National List of Essential Medicines 2011 (NLEM 2011)’ of India.

Another recent report on ‘Free Medicines for All’:

Meanwhile,the working group of the Planning Commission on health, constituted for the 12th Five Year Plan (2012-2017) headed by the Secretary of Health and Family Welfare Mr. K. Chandramouli (now retired), has also submitted its report recently.

The Part II of the report titled, “Provisions of ’free medicines for all in public health facilities … recommends that health being a state subject, all the state governments of the country should adopt the successful and well proven Tamil Nadu model of healthcare procurement.

Tamil Nadu government through Tamil Nadu Medical Supplies Corporation (TNMSC) reportedly makes bulk purchases of drugs and pharmaceuticals directly from the manufacturers through a transparent bidding process, which reduces the cost of medicines to 1/10th and even to 1/15th of the Maximum Retail Price (MRP) of the respective product packs.

As per this report, the total running cost for the ‘Free Medicines for All’ project during the plan period would be Rs. 28,675 Crores and an additional allocation of Rs. 1293 Crores will be required as one‐time capital costs. The contribution of the Central Government at 85 % of the total cost would be around Rs 25667 crores for the entire Plan period.

Conclusion:

It was good to read that Ms. Nata Menabde, WHO country-head, India in her interview to ‘The Financial Express’ dated December 7, 2011 said, “We at WHO have been fortunate enough to be consulted on this (UHC). The meeting at planning commission was very productive and positive and we think the recommendations on the road map to Universal Health Coverage in the country is a step in the right direction.”

UHC, I reckon, will also be able to address simultaneously the critical issue of high ‘out of pocket’ healthcare expenses by the common man of the country. Implemented sooner ignoring the motivated stalling tactics, if any, by the vested interests, could usher in an era of a new healthcare reform process in the country.

That said, the proposal of the UHC in its current form does have some ‘loose knots’,which should be appropriately tightened-up through informed public discourse by the stakeholders in the healthcare space of India, sooner.

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.