Tag Archives: gandhi

Health Care: “India Has Moved From Strength To Strength!”

Posted on by
Reply

The above flabbergasting assertion came recently from the Union Government of India in context of current health care system in the country. 

To be specific, this proclamation of the Ministry of Health was reportedly made at its ‘point by point rebuttal’ letter to the world’s leading medical journal of high repute - ‘The Lancet’, at the end of October 2015, in response to a news report on India’s frugal public expenditure on health. 

The chronicle:

On October 21, 2015 The Times Of India reported that shortly, a detail study in “The Lancet” would take Prime Minister Narendra Modi to task for failing in make public health a national priority area. It is happening despite his categorical promise of rolling out ‘Universal Health Coverage (UHC), during the last general election of India, in 2014.

The paper would be penned by some of the world’s foremost health experts and the issue is expected to be published on December 11, 2015.

In an interview with ‘The Times of India’, Richard Horton - the Editor-in- Chief of ‘The Lancet’, said that “health is an issue of national security for India, but Modi isn’t taking it seriously.”

Horton further commented, “I don’t see any new policies, any new ideas, any significant public commitment, and most importantly no financial commitment to the health sector, since he came into power in May, 2014.”

According to Norton, since Modi has come to power, health has completely lost focus of the Government. India is on the edge in this regard. If Prime Minister Modi does not tackle health, India’s economy combined with rising population is not sustainable. “The country’s healthcare system will collapse, if the government fails to invest in combating non-communicable diseases, such as, diabetes and heart problems”, he cautioned.

‘The Lancet’ to present contemporary fact-based analysis:                         

It is expected that the above article on India’s prevailing public health system, would be factual and analyzed based on the latest expert survey in this regard.

As I mentioned in my article of October 5, 2015 in this Blog titled, “Just 16% Of Indian Population Has Access To Free Or Partially-Free Health Care?”, the current Government has slashed union budgets for several ongoing and critical flag-ship schemes for health, such as:

  • Integrated Child Development Services
  • Mid-day meal
  • Aids and STD control
  • National Food Security Mission
  • National Rural Drinking Water Program

After a drastic reduction in union budgetary allocations for these crucial and very basic health schemes, there would possibly be no scope for any surprise in any quarter, if ‘The Lancet’ survey depicts a rather dismal overall public health care scenario in India.

Indian Government trashes ‘The Editor-in-Chief’s comment:

Trashing ‘The Lancet’ Editor-in-Chief’s above comments, Rakesh Kumar, Joint Secretary, Ministry of Health in a hard-hitting letter to Horton reportedly said:

“…launching an alphabet soup of program every quarter and not being able to implement them in true letter and spirit is a disservice to the people we serve.” 

According to this news report, the health ministry maintained that “no existing program” of the ministry has been “curtailed, stopped or truncated due to lack of funds”. It also highlighted that funding to states had been rationalized to break from the straight jacket of ‘one size fits all’ geographies and populations.

“India has moved from strength to strength and some of recent initiatives will ensure improved outcomes for the most vulnerable,” the letter re-iterated unequivocally.

“India has moved from strength to strength” – Government retorted: 

The above statement of the Union Ministry of Health that “India has moved from strength to strength” in health care, generally sounds bizarre and also absurd, to say the least. On the contrary, the available facts do not support this sweeping comment, as it were.

When compared with some much smaller neighboring nations of India and even Vietnam, it comes out clearly that they are doing far better on various critical health indicators.

This is vindicated by the ‘World Bank health indicators data’, which show that even Bangladesh, Nepal and Vietnam, with much lesser per capita GDP, are ahead of India in several key health indicators, as shown in the following table: 

Some Key Indicators India Bangladesh Nepal Vietnam
GDP Per capita(PPP) (Constant at 2011 US$) 2014 5445 2981 2261 5370
Life Expectancy At Birth (Female) 2013 68 71 70 80
Survival to Age 65 (% of Cohort) 2013 63 72 69 72
Public Health Expenditure (% of GDP) 2013 1.3 1.3 2.6 2.5
Infant Female Mortality Rate (Per 1000 Live Births) 2015 38 28 27 15
Mortality Rate (Under 5 year of Live Births) 2015 48 38 36 22
Maternal Mortality Ratio (per 1000 Live Births) 2013 190 170 190 49
Rural Population With Improved Access to Sanitation Facilities (%) 2015 29 62 44 70
Vitamin A Supplementation Coverage Rate (% of Children 6-59 months) 2013 53 97 99 98
Immunization DPT (% of Children 12-23 month) 2014 83 95 92 95

(Source: Live Mint, October 28, 2015)

Similarly, another 2011 study published in the ‘The Lancet’ reported that ‘Out of Pocket’ expenditure on health in India is the highest, again even as compared to its much smaller neighbors, as follows:

Country Out of Pocket Expenditure on Health (%)
Maldives 14
Bhutan 29
Sri Lanka 53
India 78

As I said before, these are just a few examples. In this article, I shall not dwell further on such comparisons, which are already known to many. 

Instead, I would prefer to underscore, as many scholarly research papers have already done, that GDP growth of a nation cannot be driven in a sustainable manner without putting in place a robust public health care system in a country. 

Reasonable public investment is necessary to improve health indicators:

If India wants to improve its key health indicators and surpass the achievements of just not smaller countries, such as, Nepal, Bangladesh, Sri Lanka, Maldives, but all other BRICS (Brazil, Russia, China and South Africa) nations, India needs to hike up its public health budget significantly, together with speedy implementation of all identified health projects.

According to the World Bank 2004 report (p56), for developing or middle-income countries with institutions of an acceptable quality, a 10 percent increase in public health expenditures as a proportion of the GDP, would be associated with a 7 percent decrease in the maternal mortality rate, a 0.69 percent decrease in child mortality rate, and a 4.14 percent decrease in low weight for children under five years of age.

Impact of health on economic growth shouldn’t be underestimated:

Between ‘public health’ and ‘other economic growth drivers’, choosing just one as priority focus area, could well be futile, in the long run. This is by no means an ‘either/or’ situation, at all. The Government should take into cognizance that there is a heavy price tag attached on an underestimation of the impact of health on economic growth, which could put its core objective of a sustainable high GDP growth in jeopardy.

I would now illustrate this point with no more than three examples, out of so many available.                                                                                   

According to the ‘World Health Organization (WHO)’, “Good health is linked to economic growth through higher labor productivity, demographic changes and higher educational attainment. In the same way, poor health undermines economic growth.”  

India, though, seems to be chasing a high economic growth with all guns blazing, apparently does not believe in this fundamental dictum; neither does the Government accept that current public health care system is generally pathetic in the country and virtually on the verge of crumbling, if inaction continues.

To underscore the same point that impact of health on the economy should not be underestimated, I now quote from another study hereunder.

A December 2012 paper published in the “Global Management Journal” titled, “The Connection Between Health and Economic Growth: Policy Implications Re-Examined”, concluded as follows: 

“Evidence presented in this paper illuminates the two-way relationship between economic growth and health. Bearing in mind the substantial influence of enhanced health to economic productivity and growth, governments need to look at health expenses as an investment rather than a cost”.

My third example would be another paper published in ‘OECD Observer’ titled, “Health and the economy: A vital relationship”, written by Julio Frenk, Mexican Minister of Health and Chair of the 2004 meeting of OECD Health Ministers. This paper too reiterates that the impact of health on the economy should not be underestimated. Thus, our challenge today is to harmonize health and economic policies to improve health outcomes.

Julio Frenk further emphasized, “The effects of health on development are clear. Countries with weak health and education conditions find it harder to achieve sustained growth. Indeed, economic evidence confirms that a 10% improvement in life expectancy at birth is associated with a rise in economic growth of some 0.3-0.4 percentage points a year.”

Here comes the critical importance of improving ‘Human Development Index (HDI)’ ranking of India to achieve a high and sustainable GDP growth, as the nation moves on.

 Improve ‘Ease of doing business’ and ‘Human development’ indices together: 

According to ‘World Bank’s Doing Business Report 2016’, India has moved up four rungs in the global rankings for ‘ease of doing business’. The country now ranks 130 among 189 countries, against its last year’s ranking of 134. This is a significant achievement, which has been widely publicized by the Government and very rightly so. 

Whereas, according to the latest (2014) ‘Human Development Index (HDI) report, published annually by the ‘United Nations Development Program (UNDP)’, India ranks 135 out of 187 countries across the world. The next HDI report is expected to be launched in November 2015.

HDI is a statistical tool used to measure a country’s overall achievement in its social and economic dimensions. It captures a composite statistic of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development.

Increase in life expectancy is a composite outcome of long-term effectiveness of a robust public health care system in the country.

Interestingly, the present Government does not talk much about HDI. Its primary focus seems to be now on ‘ease of doing business’, though for a sustainable high economic growth of a nation both should be speeded up and right in tandem. 

Conclusion: 

Reducing Union Budget allocation on health substantially and passing the responsibility of the same to the States with no assigned accountability for implementation on the ground, may not work in India. 

Even if the comments of Richard Horton, the Editor-in-Chief of ‘The Lancet’ on this score, are brushed aside with contempt, his factual observations should be noted as valid suggestions. Accordingly, much required action steps need to be factored in by the Government in its 20116-17 Union Budget planning process.

Before concluding, I would very humbly, respectfully and with all humility submit that the Union Government should always be open to outside experts’ comments and suggestions, especially on public health in the country, to initiate a constructive debate. Any voice of discord or dissent, either on Governments’s action or inaction or both, may not necessarily be construed as an act against the national interest.

In this context, I am curious to know, what happened when on October 19, 2015, the Union Cabinet Minister for Women and Child Welfare – Mrs. Maneka Gandhi, who oversees a scheme to feed more than 100 million poor people, reportedly expressed her anguish and concerns in public. She openly said that slashing of her Ministry’s budget by half to US$1.6 billion, has hit her plans to strengthen the fight against ‘Child Malnutrition’ and makes it difficult to pay wages of 2.7 million of health workers.

Leave aside ‘The Lancet’ squabble for a moment. Does the above public anguish of a senior Union Cabinet Minister, in any way, depict that “India has moved from strength to strength” in health care?

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.

Patented Drugs’ Pricing: Apprehensive Voices Could Turn into a Self-Defeating Prophecy

Posted on by
Reply

On February 21, 2013, the Department of Pharmaceuticals in a communication to the stakeholders announced that the committee to examine the issues of ‘Price Negotiations for Patented Drugs’ has since submitted its report to the Department. Simultaneously the stakeholders were requested to provide comments on the same urgently, latest by March 31, 2013.

This committee was constituted way back in 2007 to suggest a system that could be used for price negotiation of patented medicines and medical devices ‘before their marketing approval in India’.

In that process, the Committee reportedly had 20 meetings in two rounds, where the viewpoints of the Pharmaceutical Industry including FICCI, NGOs and other stakeholders were taken into consideration.

Simultaneously, the Committee had commissioned a study at the Rajiv Gandhi School of Intellectual Property Law and Indian Institute of Technology (IIT), Kharagpur to ascertain various mechanisms of price control of Patented Drugs in many countries, across the world. The Committee reportedly has considered this ‘Expert Report’ while finalizing its final submission to the Government.

Scope of recommendations:

The Committee in its final report recommends price negotiations for Patented Drugs only for:

  • The Government procurement/reimbursement
  • Health Insurance Coverage by Insurance Companies

Issues to remain unresolved despite price negotiation:

In the report, the Committee expressed the following view:

  • Even after calibrating the prices based on Gross National Income with Purchasing Power Parity of the countries where there are robust public health policies, with the governments having strong bargaining power in price negotiation, the prices of patented medicines will still remain unaffordable to a very large section of the population of India. Such countries were identified in the report as UK, Canada, France, Australia and New Zealand
  • The government should, therefore, extend Health Insurance Scheme covering all prescription medicines to all citizens of the country, who are not covered under any other insurance /reimbursement scheme.

Three categories of Patented Drugs identified:

The committee has identified three categories of patented drugs, as follows:

1. A totally new class of drug with no therapeutic equivalence

2. A drug that has therapeutic equivalence but also has a therapeutic edge over the  existing ones

3. A drug that has similar therapeutic effectiveness compared to the existing one

The Committee recommended that these three categories of Patented Drugs would require to be treated differently while fixing the price.

A bullish expectation of the Government on Patented Drugs market:

The report highlights that the Indian Pharmaceutical Industry has currently registered a turnover exceeding US$ 21 billion with the domestic turnover of over US$ 12 billion.

The report also estimates that the total value turnover of patented medicines in India, which is currently at around US$ 5 million, is expected to grow at a brisk pace due to the following reasons:

  • Rapid up-gradation of patent infrastructure over the past few years to support new patent laws with the addition of patent examiners.
  • Decentralization of patent-filing process and digitization of records.
  • Increase of population in the highest income group from present 10 million to 25 million in next 5 years.

All these, presumably have prompted the Government to come out with a ‘Patented Drugs Pricing’ mechanism in India.

Pricing Mechanism in China: 

Just to get a flavor of what is happening in the fast growing neighboring market in this regard, let us have a quick look at China.

In 2007, China introduced, the ‘New Medical Insurance Policy’ covering 86 percent of the total rural population. However, the benefits have so far been assessed as modest. This is mainly because the patients continue to incur a large amount out of pocket expenditure towards healthcare.

There does exist a reimbursement mechanism for listed medicines in China and drug prices are regulated there with the ‘Cost Plus Formula’.

China has the following systems for drug price control:

  • Direct price control and competitive tendering

In this process the Government directly sets the price of every drug included in the formulary. Pharmaceutical companies will require making a price application to the government for individual drug price approval.The retail prices of the drugs are made based on the wholesale price plus a constant rate.

Interestingly, unlike Europe, the markup between the retail and wholesale price is much higher in China.

Apex body for ‘Patented Drugs Price Negotiation’: 

The Report recommends a committee named as ‘Pricing Committee for Patented Drugs (PCPD)’ headed by the Chairman of National Pharmaceutical Pricing Authority (NPPA) to negotiate all prices of patented medicines.

As CGHS, Railways, Defense Services and other Public/Private institutions cover around 23 percent of total healthcare expenditure, the members of the committee could be invited from the Railways, DGHS, DCGI, Ministry of Finance and Representatives of top 5 health insurance companies in terms of number of beneficiaries.

Recommended pricing methodology:

For ‘Price Negotiation of Patented Drugs’, the report recommends following methodologies for each of the three categories, as mentioned earlier:

  1. For Medicines having no therapeutic equivalence in India:
  • The innovator company will submit to the PCPD the details of Government procurement prices in the UK, Canada, France, Australia and New Zealand for the respective Patented Drugs.
  • In the event of the concerned company not launching the said Patented Drug in any of those reference countries, the company will require to furnish the same details only for those countries where the product has been launched.
  • The PCPD will then take into consideration the ratio of the per capita income of a particular country to the per capita income of India.
  • The prices of the Patented Drug would be worked out for India by dividing the price of the medicine in a particular country by this ratio and the lowest of these prices would be taken for negotiation for further price reduction.
  • The same methodology would be applicable for medical devices also and all the patented medicines introduced in India after 2005.

2. For medicines having a therapeutic equivalent in India:

  • If a therapeutically equivalent medicine exists for the Patented Drug, with better or similar efficacy, PCPD may consider the treatment cost for the disease using the new drug and fix the Patented Drug price accordingly
  • PCPD may adopt the methodology of reference pricing as stated above to ensure that the cost of treatment of the Patented Drug does not increase as compared to the cost of treatment with existing equivalent medicine

3. For medicines introduced first time in India itself:

  • PCPD will fix the price of such drugs, which are new in the class and no therapeutic equivalence is available, by taking various factors into consideration like cost involved, risk factors and any other factors of relevance.
  • PCPD may discuss various input costs with the manufacturer asking for documented evidence.
  • This process may be complex. However, the report indicates, since the number of medicines discovered and developed in India will not be many, the number of such cases would also be limited.

Negotiated prices will be subjected to revision:

The report clearly indicates that ‘the prices of Patented drugs so fixed will be subjected to revision either periodically or if felt necessary by the manufacturer or the regulator as the case may be.’

Strong voices of support and apprehension:

A.  Support from the domestic Indian Pharmaceutical Industry

Interestingly there have emerged strong voices of support on this Government initiative from the domestic Indian Pharmaceutical Industry, as follows:

  • Indian Pharmaceutical Alliance (IPA) has commented, “This policy is in the right direction as we know that Compulsory License (CL) cannot address the need of price control for all patented drugs, so this policy takes care of that issue of a uniform regulation of price control for all patented drugs”. IPA had also suggested that the reference pricing should be from the developed countries like UK, Australia and New Zealand where the 80 percent of the expenditure being incurred on public health is borne and negotiated by the government.
  • Pharmexcil - another pharma association has commented, “This report is balanced and keeps India’s position in the global market in mind while recommending a pricing formula.”
  • Federation of Pharma Entrepreneurs (FOPE) & Confederation of Indian Pharmaceutical Industry (CIPI) had submitted their written views to the Committee stating that FOPE supports price negotiation mechanism for Patented Drugs and strongly recommends that Compulsory License (CL) provisions should not get diluted while going for price negotiation.
  • Indian Drug Manufacturer Association (IDMA) supported price negotiation for all Patented Drugs and recommended that the issue of CL and price negotiation should be dealt separately.

However, the Organization of Pharmaceutical Producers of India (OPPI) feels, as the report indicates, ‘Price Negotiations for Patented Products’ should be made only for Government purchases and not be linked with ‘Regulatory Approval’. They have already expressed their serious concern on the methodology of ‘Patented Products Pricing’, as detailed in the above report.

B. Apprehension within the Government

Even more interestingly, such apprehensive voices also pan around the Government Ministries.

Though the DoP has proposed in the report that once the Patented Drug Policy is implemented the issuance of CL may be done away with, the Department of Industrial Policy and Promotion (DIPP) has reportedly commented with grave caution, as under:

“If it is decided that Price Negotiations on Patented Drugs should be carried out then, the following issues must be ensured:

(i) Negotiations should be carried out with caution, as the case for Compulsory License on the ground of unaffordable pricing of drugs [Section 84(b) of the Patent Act] will get diluted.

(ii) Re-Negotiations of the prices at periodic intervals should be an integral part of the negotiation process.”

C. Apprehension of other stakeholders 

The NGOs like, “Lawyer’s Collective HIV/Aids Unit” and “Medicines Sans Frontiers (MSF)” reportedly have urged that the price negotiation should not be allowed to weaken the position of CL for the Patented Drugs.

They had mentioned to the Committee as follows:

“As regards the plea of the patent holder that they had spent a large sum on R&D, one should note that most of the funds for R&D come from the Governments of their respective countries”. They further stated, “when the cost of production of the patented drugs is not known, it would be impossible to negotiate the price in a proper manner.”

The DoP report states that the other members of the NGOs also seconded these views.

Conclusion:

Not so long ago, on January 12, 2013, one of the leading dailies of India first reported that in a move that is intended to benefit thousands of cancer patients, Indian Government has started the process of issuing Compulsory Licenses (CL) for three commonly used anti-cancer drugs:

-       Trastuzumab (or Herceptin, used for breast cancer),

-       Ixabepilone (used for chemotherapy)

-       Dasatinib (used to treat leukemia)

For a month’s treatment drugs like, Trastuzumab, Ixabepilone and Dasatinib reportedly cost on an average of US$ 3,000 – 4,500 or Rs 1.64 – 2.45 lakh for each patient in India.

I reckon, a robust mechanism of ‘Price Negotiation for Patented Drugs’ could well benefit the global pharmaceutical companies to put forth even a stronger argument against any Government initiative to grant CL on the pricing ground for expensive innovative drugs in India. At the same time, the patients will have much greater access to patented drugs than what it is today, due to Government procurement of these drugs at a negotiated price.

On the other hand, apprehensive voices as are now being expressed on this issue, just hoping for drastic measures of grant of frequent CL by the Government for improved patients’ access to innovative drugs, could well turn into a self-defeating prophecy – making patients the ultimate sufferers, yet again, as happens most of the time.

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.