Tag Archives: Health

Will AB-NHPM Mitigate Indian Healthcare Crisis?

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

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

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

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

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

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

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

On paper all health care related schemes look good:

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

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

Who contributes and how much to health expenditures: 

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

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

Where does the treatment take place?

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

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

Reasons for not using public health care facilities:

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

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

Addressing these reasons would help significant reduction in OOPE:

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

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

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

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

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

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

Highest OOPE expenditure incurred for outpatient treatment:

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

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

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

New NHPM excludes two major components of OOPE: 

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

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

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

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

Conclusion:

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

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

By: Tapan J. Ray    

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

 

Increasing Consumerism: A Prime Mover For Change in Healthcare

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Increasing ‘consumerism’ has already become a strong prime mover to reckon with, even in healthcare, including the pharma industry, across the world. Patients’ longing for better participative treatment experience at an affordable cost, has started gathering momentum as a major disrupting force in the healthcare space of India, as well.

In this article, which discusses a different topic from what I said in my last article that I will write this week, let us try to fathom today’s reality in a fast expanding area, primarily by connecting the emerging dots, both globally and locally. However, before doing so, it won’t be a bad idea to recapitulate, in the general term, what exactly is ‘consumerism’ – and then looking at it in context of healthcare.

What it really means?

The Oxford dictionary defines ‘consumerism’ as: ‘The protection or promotion of the interests of consumers.’ As an example, it says, ‘The impact of consumerism emerges as a factor of stabilization, as do the different understandings of stability and stabilization.’ Whereas, consumerism in healthcare is an assertion of patients’ right to be a key participant in their healthcare decision making process. As aptly put by Healthcare Success: “It is a movement from the ‘doctor says/patient does’ model, to a ‘working partnership’ model.”

Should pharma strategic marketing process, not take care of it?

When the above question is asked differently as: If the pharma strategic marketing process is effective, why is healthcare consumerism increasing across the world, including India? To find an answer to this, let’s go the basic of the definition of ‘marketing’. American Marketing Association (AMA) defines it as: ‘‘Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.’ A more specific definition of pharma marketing (Olszewska A. Strategic management in pharmaceutical marketing. Chemik 2006: S91-4.)is: ‘A management process that serves to identify and meet patients’ needs in a profitable way.’

This prompts the key question, if the above basic process of ‘marketing’ is followed by the pharma industry as it ought to be, why should there be an increasing trend of ‘consumerism’ in Healthcare, in general, and the pharma industry in particular?

The major drivers:

NRC Health through various surveys, has captured the major drivers of consumerism in healthcare. I am listing below a few of those, as I understand, just as examples:

  • Significant increase in health care cost to payers, including the patients.
  • Consumers are the fastest growing payer in the industry.
  • They foot most costs of their health premiums and out-of-pocket co-pays.
  • As consumers have more money at risk, they want to get more engaged with their own treatment decision for the best value for money.
  • One-way monologue for treatment doesn’t not enough for most patients.
  • 3 of 10 patients defer necessary treatment to avoid self-confusion and expense.
  • 4 out of 5 find difficult to compare costs Vs. drug quality.
  • 3 out of 4 feel their health care decisions are the most important and expensive
  • Patients face difficulty to compare cost, quality, and access to physicians.

In my view, sooner than later, the emerging situation in India will also be no different, especially with its increasing digitally empowered population.

Is pharma marketer cognizant of this emerging trend?

It will be unfair to make any sweeping statement that they are not. This is based on what I see and experience around, mostly in the global arena. But locally, although significant publicity of a large number of pharma training programs appear in the social media, most of these are apparently based on the ‘buzz of the time’.

Besides a few sporadic exceptions, generally the Indian pharma marketers still appear to believe in the same age-old model – what the ‘doctor says/patient does’. As a result, increasing consumerism keep haunting the industry – the Government often responds – mostly with sound bites, though, the industry keeps lamenting on the ‘ease of doing business’ or the lack of it, in India. The much avoidable cycle continues.

A prime mover for change in healthcare:

Increasing health care consumerism is a prime mover to usher in significant changes in this space. These changes are mostly unexpected and disruptive, but usually good for the patients. I shall illustrate this point here with just two examples, out of many. The first one comes from three global corporate head honchos of unrelated business, aimed at their own employees. And the other is related to all patients with the initiative coming from within the healthcare industry, including pharma.

The first example of an unexpected move comes from the announcement of three corporate behemoths – Amazon, Berkshire Hathaway and JPMorgan Chase, saying they would form an independent health care company for their employees in the United States. This was reported by The New York Times (NYT) on January 30, 2018. The alliance signals how frustrated American businesses are not just with their health care system, but also rapidly spiraling cost of medical treatment – the report said. The NYT also quoted Warren E. Buffett of Berkshire Hathaway as saying:“The ballooning costs of health care act as a hungry tapeworm on the American economy.”

The initial focus of the new venture, as announced, will be on “technology solutions” that will provide U.S. employees and their families with “simplified, high-quality and transparent healthcare at a reasonable cost.”  They also plan to “bring their scale and complementary expertise to this long-term effort.Nevertheless, it is unclear how extensively the three partners would overhaul their employees’ existing health coverage to reduce healthcare cost and improving outcomes for patients. They may simply help workers find a local doctor, steer employees to online medical advice or use their muscle to negotiate lower prices for drugs and procedures. While the alliance will apply only to their employees, these corporations are so closely watched that whatever successes they have could become models for other businesses – NYT commented.

The second examplecomes from an article, titled ‘Consumerism in Health Care’, published in NEJM Catalyst on January 11, 2018. It says, another important change that is a direct outcome of the consumerism of health care is personalization of care to facilitate health outcomes. However, ultimate personalization, that is, a “one-to-one relationship” between a company and an individual appear increasingly possible with the data and analytics that are now within the reach of many global pharma players, the paper says. However, most Indian pharma players, I reckon, still lack wherewithal that’s required to build capabilities to deliver high degree of personalization for patients.

As a result, pharma industry, in general, is still charting in the primary stages of delivering personalization, although, progress made by some global players in this direction is quite encouraging.

Consumerism in healthcare to gather momentum in India:

A September 2016 paper, titled ‘Re-engineering Indian health care’, published jointly by FICCI and EY points to this direction. The results of their survey done as a part of this study indicates, the aspirations of the middle and upper classes are evolving and their demands for convenience, participation and transparency in the health care delivery process are indicative of the shift from being a docile patient to an informed “health consumer.”

Thus, it is irrefutable today that digitally empowered patients are fast increasing, even in India. This is fueled by rapid expansion of broadband Internet in the country – a bottomless source of information. In this scenario, would the general pharma marketing assumption in India - what the ‘doctor says/patient does’, still yield results? Indian pharma marketers may need to possibly do some crystal gazing in this area – sooner the better.

Conclusion:

Accepting the reality of increasing consumerism in the healthcare space, both globally and locally, pharma players, especially in India, need to clear all clutter in the pathway to reach out and directly interact with their end-customers – the patients, aiming at improving clinical outcomes, the way patients would want – individually or in a cluster.

In a nutshell, what do patients want through increasing consumerism: Personal and meaningful involvement in their healthcare decision making process, based on requisite credible information from independent expert sources. Thus, what pharma the players should gear up to be: Cultivating a truly patient-centric approach in their business. And, there lies the real challenge for many in the industry, as it will mean all marketing and related organizational decisions will revolve around in-depth understanding of the patient’s mindset, along with their associated needs, want and health aspirations.

While moving towards this direction, providing personalized care by leveraging optimally selected modern technological platforms, will be a cutting-edge tool for pharma business excellence and achieving sustainable all-round growth – over a long period of time. As I see it, increasing consumerism will continue to remain a prime mover for unexpected, but welcoming changes in the healthcare space, at least for a medium term. It is to be taken rather seriously, with as much care as it deserves.

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.

Prescription Digital Therapy Now A Reality

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The pursuit of offering ‘prescription digital therapeutics’ or ‘digiceuticals’ by Big Pharma, to ensure better clinical outcomes for patients, has apparently come to fruition now.

On April 18, 2018, by a media release, Novartis announced that the Sandoz Division of the Company has entered into collaboration with Pear Therapeutics to commercialize and continued development of digital therapeutics, designed to effectively treat disease and improve clinical outcomes for patients.

The collaboration brings on to the table, a synergy between Sandoz expertise in launching and commercializing various disease treatments, with Pear’s leading experience in digital therapeutics design and implementation. This deal has attracted attention of many. Mainly because, any pharma player will, for the first-time, detail a digital therapy treatment directly to the medical profession, and seek their prescription support.

It is worth noting that Pear’s flagship digital therapeutic – reSET is the first USFDA-cleared mobile medical application with both a safety and efficacy label to help treat patients with Substance Use Disorder, in September 2017. According to published reports, several studies have established that it is two-times more effective than conventional in person therapy sessions. Interestingly, the rate of treatment efficacy increases even up to tenfold, in refractory patients.

Just the beginning of a long run: 

The above market launch of a digital therapy by Novartis signals just the beginning of a long run in changing in the disease treatment archetype for better outcomes. Incidentally, prior to this announcement, on March 1, 2018, the same Company had announced, “Novartis and Pear Therapeutics to collaborate on prescription software applications aimed to treat patients with schizophrenia and multiple sclerosis.”

The media release underscored:“Psychiatric and neurodegenerative diseases place a heavy physical, mental and economic burden on patients and their families. With widespread adoption of digital devices, prescription digital therapeutics could potentially play an important role in future treatment models for a range of diseases with high unmet medical need”.

The scope and potential:

An article titled – ‘Digital therapeutics: Preparing for takeoff’,published by McKinsey & Company in February 2018, captures its scope succinctly. It says, “digital therapeutics tend to target conditions that are poorly addressed by the healthcare system today, such as chronic diseases or neurological disorders. In addition, they can often deliver treatment more cheaply than traditional therapy by reducing demands on clinicians’ time.”

A separate McKinsey interview article, titled ‘Exploring the potential of digital therapeutics’, published in the same month, elucidated the potential of digital therapy equally well.  It highlighted:“A digital therapeutic is an intervention based on software as the key ingredient, which has a direct impact on a disease. This is what distinguishes this category from the broader term digital health. We will see digital therapeutics and digital diagnostics integrate into the health system…”

‘Prescription digital therapy’ are not just ‘Fitness and Well-being’ Apps:

Prescription digital therapy are not just to monitor a person’s general fitness level against pre-identified parameters, and overall well-being. Whereas, digital therapeutics help patients to regularly and consistently monitor relevant and tailor-made disease related data - in real-time to detect behavioral, lifestyle and requisite biological changes on a daily basis. However, this is not ‘a so well-realized necessity’ today, especially, in the treatment of certain serious disease conditions, to ensure significantly better clinical outcomes for patients.

Digital therapeutics can ensure making a favorable change in patient behavior, which is not merely as efficient as administering medicines, but could also ensure greater effectiveness than conventional medications. Further, it assists patients to better understand, manage and control several disease conditions, and more importantly, sans any untoward side-effects.

Besides, with digital therapy, the required treatment interventions will reach patients faster than traditional treatment processes. Both the patient request and the medical response for the same can be quickly exchanged, together with relevant data support, through smartphones or other wearable digital interfaces – either in the form of voice or text or both. I shall dwell on this later in the article. Thus, digital therapy may not require patients to meet the doctor every time a need arises.

Moreover, fitness and wellbeing Apps do not require marketing approval from a country’s drug regulator. Mostly because, they help monitoring general and generic fitness parameters, capturing some low-risk changes. Whereas, a custom-made prescription digital therapy would necessarily require such regulatory nod.

In tandem, various studies are also being conducted on wearables, such as an Apple Watch, as an interface. The following are examples of some of these studies:

Digital therapy study with Apple Watch as an interface:

In February 2017, Takeda Pharmaceuticals U.S.A. and Cognition Kit Limited, announced a collaboration to pilot the use of a specially designed app on an Apple Watch wearable to monitor and assess cognitive function in patients with Major Depressive Disorder (MDD).

In November 2017, they presented results from ‘Digital Wearable Technology Study’ in patients with MDD. The observational study involved 30 participants, aged 18-65, with a clinical diagnosis of mild to moderate depression who have been prescribed antidepressant monotherapy for MDD.

The study also evaluated feasibility and participant compliance with measures of mood and cognition on wearable technology; and compared measures of mood and cognition on wearable technology using traditional neuropsychological testing and patient reported outcomes on depression symptoms at 6 weeks. Participants were provided with an Apple Watch on which brief cognitive and mood tests were administered daily.

The researchers observed that patients were compliant with the wearable Apple Watch device on a daily basis to evaluate mood (95 percent) and cognition (96 percent). The study also demonstrated that abbreviated daily assessments delivered through the wearable Apple Watch device corresponded with objective Cambridge Neuropsychological Test Automated Battery (CANTAB) cognitive tests and full-length patient reported outcomes, PHQ-9 and PDQ-D, assessed during weeks 1, 3 and 6. No adverse events were reported in the study.

According to another report, this user interface with Apple’s smart-watch versions 2 and 3 is now being used in a number of studies for chronic conditions, such as Parkinson’s disease – combining biometric data with user input. Again, in February 2017, Johns Hopkins University announced a project to use the smart-watch for research on possible triggers of epileptic seizures.

When used as an interface with prescription digital therapy, the provision of e-SIM and GPS in Apple Watch Series 3, I reckon, would also help patients to immediately communicate with the remote therapy centers using the same device, anytime – as and when the patients want.

Digital therapy initiatives in India:

Initiative on digital therapy has already started rolling in India, as well. Its pace is also quite encouraging. For example, Wellthy Therapeutics is building a patient centric solution for diabetes through digital intervention and management. On February 20, 2018, the Company, reportedly, shared the interim results of an ongoing real-world pilot to evaluate the effectiveness of the Wellthy Diabetes Smartphone App (WD). The results were shared at the 11th International Conference on Advanced Technologies and Treatments for Diabetes (ATTD 2018) in Vienna, Austria.

The data demonstrated how the use of WD improved glycemic control. On completion of 16 weeks, participants showed a reduction in their HbA1c by (-0.61%) on average, with 61.5% of participants having showed significant reduction in their HbA1c with an average of (-1.17%) reduction.

Conclusion:

As indicated in my article titled, ‘Digiceuticals: A Force Multiplier to Contain Chronic Diseases’, published in this blog on October 23, 2017,prescription digital therapies are primarily of two types – one for “medication augmentation” and the other for “medication replacement.”

Be that as it may, prescription digital therapyimproves clinical outcomes for patients by manifold. It also shows potential to take over from traditional treatment with medicines in several serious and virtually crippling ailments, mostly related to human behavior and lifestyle, such as a host of chronic diseases, and without causing any side-effects.

Thus, prescription digital therapy is now a reality. It has come to stay for long – can’t be wished away, any longer.

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.

Creating A ‘Virtuous Cycle’ Through Patient Reach and Care

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As many would know, in the strategic marketing process of any product including patented and generic drugs crafty product differentiation plays a critical role.

This strategic process of creating a competitive edge with unique product differentials is necessary. It helps perceiving a product more attractive to the target audience, against its competitors. When done effectively, the product fetches a greater share of mind for usage, achieving higher levels of top of mind recall, and, of course, a price premium.

In pharma, the traditional brand differentiation revolves around delivering cutting-edge values, skimming through the intrinsic product features and benefits. In India, which is predominantly a branded generic market, the local pharma marketers almost routinely keep trying to toe this line.

As I said before, some of them often vehemently argue in favor of maintaining a status quo in this area. It could probably be due to professional discomfort in venturing out of their respective comfort zones.

In the current pharma marketing environment, especially in India, finding the right answer to a not-so-easy-to-reply question may trigger a disruptive change in the traditional, or virtually routine marketing practices. This is widely considered a prevailing normal of date, and generally includes ‘features and benefits oriented product differentiation.’

In this article, I shall dwell on this important area, picking a thread from this simple, but a difficult-to-answer question.

The question:

This question goes like this: ‘How does a pharma marketer conceptualize product features and benefits oriented differential values, when there are virtually no clinically significant differentials between the competing products?’ There would possibly be no credible answers, justifying this practice.

Are branded generic sales mostly driven by contentious factors?

This query is more relevant in a branded generic market, such as India. Yet, pharma marketers keep following routinely the traditional methods in this area. As many say, actual product sales are driven by mostly by those critical factors, which are contentious and are being fiercely debated within the country, even today.

Pharma needs more extrinsic differentiation rather than intrinsic:

In the midst of an evolving new value expectation of pharma consumers, the market access strategy of the industry marketers must also evolve, keeping at least a step ahead of the former. This would help in delighting the customers, by offering them something meaningful, well before they start expecting the same. Thus, it makes me believe, a time has come to make the extrinsic factors, such as patient experience or delight, the center piece of product differentiation, weaving around its intrinsic qualities.

Many global companies have already started acting in this area – creating a whole new experience of care and relief for the patients, with new marketing models delivering differential product values to the target groups. Similar steps can successfully be taken even where there are no clinically significant differentials between the competing products.

Greater participation of consumers in treatment choices:

The information revolution in the world, mainly empowered by the Internet-based platforms – social or otherwise, is enabling many consumers to be partners in the disease treatment choices along with the doctors. In India too, it has started happening – slowly, but surely.

Those consumers, both in urban and mostly in the rural India, who won’t have any direct access to such information, ‘word of mouth’ enlightenment received from others would have a somewhat compensatory effect. Thus, the patients and their near and dear ones will have multiple treatment choices to choose from. In my view, this situation would gain a critical mass – much faster than what the current trend suggests. There won’t be any surprises, if this change assumes a snowballing effect, with modern technology being the key catalyst.

The current attitude could be counterproductive:

In this dynamic situation, any arrogance or ignorance of pharma marketers nurturing a seemingly ‘perennial’ conviction that ‘Indian pharma market and the patients are different’, could indeed be grossly counterproductive. This group of people seems to form a majority, today.

However, it is great to notice that some young Indian pharma professionals with an agile mindset and cerebral power, are thinking differently. They are not just keenly observing the ‘dots’, but also capturing, connecting and mapping the changing needs of the patients.

Their fingers are always on the pulse – concentrating more on strategizing extrinsic differentiation of products rather than remaining in the cocoon of the intrinsic ones. This quest to create an unchallenged and difficult to match market-space, will be essential in gaining the competitive cutting edge, as we move on.

Creating a virtuous cycle:

The focus of a pharma player in creating an extrinsic product differential edge, in pursuit of delivering the value of unique consumer experience, would in turn help enhancing the company reputation. This would, consequently, add value in creating an extrinsic product differential edge – thus, completing a ‘Virtuous Cycle’. It is generally caused by ‘complex chains of events that reinforce themselves through a feedback loop.’

A study on the ‘Impact of Corporate Reputation on Brand Differentiation’, has also established the ‘influence of company reputation, or what is often referred to as corporate reputation on branding strategy and producing intangible asset for different industries…’ This study is considered a pioneering attempt to measure the impact of corporate reputation on brand differentiation strategy.

Conclusion:

Today, especially in the marketing process of branded generic drugs, Indian marketers keep following a system that creates a sequence of reciprocal cause and effect, in which different elements of this overall activity intensify and aggravate each other, leading inexorably to a worsening of the situation. The Oxford dictionary defines this situation as a ‘Vicious Cycle.’

It’s not quite easy to come out of it, extricating the involved players from caustic remarks and allegations of indulging into contentious sales activities, if not blatant ‘marketing malpractices’. Nevertheless, breaking this mold is a ‘must do’ requirement, as many industry watchers believe.

This is because, if one wants to build a company for sustainable business excellence, it has to follow the principles of a ‘Virtuous Cycle’. Otherwise, it could threaten the very survival of the business, as we have witnessed several such instances in India, involving pharma companies. Several global pharma players are now trying hard to create a ‘Virtuous Cycle’, through well-researched strategic initiatives of patient reach and care.

To face this challenge of change squarely, Indian pharma marketers may also wish to focus on extrinsic differentiation of products, rather than intrinsic ones, as is mostly being done today, routinely. This course correction, I reckon, would play a ‘make or mar’ role in the pharma business, eventually. The passion to create a relatively unchallenged and difficult to match market space around patients, will be essential in gaining the requisite competitive advantage – giving shape to the much desired ‘Virtuous cycle’, as we move on.

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.

 

Providing Unique Patient Experience – A New Brand Differentiator

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“Pharma industry, including the patients in India are so different from other countries. Thus, any strategic shift from conventional pharma brand marketing approach – going beyond doctors, won’t be necessary.”

The above mindset is interesting and may well hold good in a static business environment. But, will it remain so when ‘information enabled’ consumer behavior is fast-changing?

“Shall cross the bridge when we come to it” – is another common viewpoint of pharma marketers.

Many might have also noted that such outlooks are not of just a few industry greenhorns. A wide spectrum of, mostly industry-inbred marketers – including some die-hard trainers too, subscribe to it – very strongly.

Consequently, the age-old pharma marketing mold remains intact. Not much effort is seen around to reap a rich harvest out of the new challenge of change, proactively. The Juggernaut keeps moving, unhindered, despite several storm signals.

Against this backdrop, let me discuss some recent well-researched studies in the related field. This is basically to understand how some global pharma companies are taking note of the new expectations of patients and taking pragmatic and proactive measures to create a unique ‘patient experience’ with their drugs.

Simultaneously, I shall try to explore briefly how these drug companies are shaping themselves up to derive the first-mover advantage, honing a cutting edge in the market place. This is quite unlike what we generally experience in India.

As I look around:

When I look around with a modest data mining, I get increasingly convinced that the quality of mind of pharma marketers in India needs to undergo a significant change in the forthcoming years. This is because, slowly but surely, value creation to provide unique ‘patient experience’ in a disease treatment process, will become a critical differentiator in the pharma marketing ball game. Taking prime mover advantage, by shaping up the change proactively for excellence, and not by following the process reactively for survival, would separate the men from the boys in India, as well.

Patient experience – a key differentiator:

A recent report titled, “2017 Digital Trends in Healthcare and Pharma”, was published by Econsultancy in association with Adobe. This study is based on a sample of 497 respondents working in the healthcare and pharma sector who were among more than 14,000 digital marketing and eCommerce professionals from all sectors. The participants were from countries across EMEA, North America and Asia Pacific, including India.

Regarding the emerging scenario, the paper focuses mainly on the following areas:

  • Pharma companies will sharpen focus on the customer experience to differentiate themselves from their competitors.
  • ‘The internet of things (IoT)’ – the rapidly growing Internet based network of interconnected everyday use computing devices that are able to exchange data using embedded sensors, has opened new vistas of opportunity in the pharma business. Drug players consider it as the most exciting prospect for 2020.
  • Virtual Reality (VR) and Augmented Reality (AR) have started filling critical gaps in pharma and healthcare technologies and systems. Their uses now range from training doctors in operating techniques to gamifying patient treatment plans. Over 26 percent of respondents in the study see the potential in VR and AR as the most exciting prospect for 2020.

Commensurate digital transformation of pharma industry is, therefore, essential.

Prompts a shift from marketing drugs to marketing outcomes:

The above study also well underscores a major shift – from ‘marketing drugs and treatments’ – to ‘marketing outcome-based approaches and tools’, both for prevention and treatment of illnesses. This shift has already begun, though many Indian pharma marketers prefer clinging on to their belief – ‘Indian pharma market and the patients are different.’

If it still continues, there could possibly be a significant business impact in the longer-term future.

Global companies have sensed this change:

Realizing that providing a unique experience to patients during the treatment process will be a key differentiator, some global companies have already started acting. In this article I shall highlight only one recent example that was reported in March 01, 2018.

Reuters in an article on that day titled, “Big pharma, big data: why drugmakers want your health records,” reported this new trend. It wrote, pharma players are now racing to scoop up patient health records and strike deals with technology companies as big data analytics start to unlock a trove of information about how medicines perform in the real world. This is critical, I reckon, to provide a unique treatment experience to the patients.

A recent example:

Vindicating the point that with effective leverage of this powerful tool, drug manufacturers can offer unique value of their medicines to patients, on February 15, 2018, by a Media Release, Roche announced, it will ‘acquire Flatiron Health to accelerate industry-wide development and delivery of breakthrough medicines for patients with cancer.’ Roche acquired Flatiron Health for USD 1.9 billion.

New York based Flatiron Health – a privately held healthcare technology and services company is a market leader in oncology-specific electronic health record (EHR) software, besides the curation and development of real-world evidence for cancer research.

“There’s an opportunity for us to have a strategic advantage by bringing together diagnostics and pharma with the data management. This triangle is almost impossible for anybody else to copy,” said Roche’s Chief Executive Severin Schwan, as reported in a December interview. He also believes, “data is the next frontier for drugmakers.”

Conclusion:

Several global pharma companies have now recognized that providing unique patient experience will ultimately be one of the key differentiators in the pharma marketing ballgame.

Alongside, especially in many developed countries, the drug price regulators are focusing more on outcomes-based treatment. Health insurance companies too, have started looking for ‘value-based pricing,’ even for innovative patented medicines.

Accordingly, going beyond the product marketing, many drug companies plan to focus more on outcomes-based marketing. In tandem, they are trying to give shape to a new form of patient expectation in the disease prevention and treatment value chain, together with managing patient expectations.

Such initiatives necessitate increasing use advanced data analytics by the pharma marketers to track overall ‘patient experience’ – against various parameters of a drug’s effectiveness, safety and side-effects. This would also help immensely in the customized content development for ‘outcomes-based marketing’ with a win-win intent.

Providing unique ‘patient experience’ is emerging as a new normal and a critical brand differentiator in the global marketing arena. It will, therefore, be interesting to track how long the current belief – ‘Pharma industry and the patients in India are so different from other countries’, can hold its root on the ground, firmly. Or perhaps will continue till it becomes a necessity for the very survival of the business.

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.

Drug Pricing Pressure to Escalate Further?

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On February 09, 2018, NITI Aayog released its “Healthy States, Progressive India” Report. The study ranked the States based on ‘health index’. Kerala, Punjab and Tamil Nadu featured as top three in terms of overall performance in 2015-16. However, the interstate variation of ‘health indices’ was quite significant, with the highest being 76.55 (Kerala) and the lowest in Uttar Pradesh with 33.69, during the same period.

Importantly, the report also noted: “About one-third of the States have registered a decline in their performance in 2016 as compared to 2015, stressing the need to pursue domain-specific, targeted interventions.” It’s worth noting, the reported decline in performance was registered despite several promises of the Government in this space, during immediately preceding years.

Apparently, as a corrective measure to this effect, the world’s largest government-funded health care program – the ‘National Health Protection Scheme (HPS)’ of India was announced in the Union Budget Proposal, on February 01, 2018. HPS is expected to provide insurance cover of up to ₹500,000 to 100 million poor and vulnerable families, covering around 500 million population in the country.

As enshrined in the National Health Policy 2017 (NHP 2017), HPS too seeks to ensure improved access and affordability of quality secondary and tertiary care services with a significant reduction in Out of Pocket Expenditure (OOPE) on health care, for the common citizens in the country.

Such a massive public health care program as HPS, is obviously expected to use a transparent drug procurement and logistics framework. This, in turn, would necessitate tough price negotiations with the pharma manufacturers for the purchase of medicines, leading to significant reduction in drug prices. This is already happening in some States, like Tamil Nadu.

High OOPE on health:

According to the December 2016 report of the Union Ministry of Health and Family Welfare, of the total 64.2 percent OOPE in 2013-14, 53.46 percent was spent on medicines and 9.95 percent was spent on diagnostics, in India. 82.29 percent of the total OOP medicines expenditure and 67 percent of total OOP diagnostic expenditure was for outpatient treatment. Of the total OOPE, 15.96 percent was on traditional medicines/ AYUSH, of which equal proportion was spent on outpatient and inpatient care.

In an interview, published on December 18, 2017, the Chairman of the Insurance Regulatory and Development Authority of India (IRDAI), reportedly, also said, OOPE makes up about 62 percent of all health care costs in India, causing impoverishment of many patients. In a comparative yardstick, OOPE is about 20 percent in the U.S. and the U.K. and 20-25 percent in BRICS countries. Thus, there is a need to significantly bring it down in India, he said.

Curiously, the ‘Health in India’ report, which draws data from the 71st round of the National Sample Survey conducted from January to June 2014, presents a somewhat different picture. It reportedly says, of the total OOPE, 72 percent in rural and 68 percent in urban areas was towards buying medicines for non-hospitalized treatment. The Health in India report shows, in rural India, 25 percent patients relied on “borrowings” for hospitalization, and 68 percent on household income and other savings. In urban India, 18 percent patients had to borrow while admitted in hospital, and 75 percent relied on income or savings – the report further added.

Containing OOPE – a dire necessity:

Be that as it may, OOPE for health in India and, especially, on drugs, is indeed very high, by any measure. To contain this burden on the general population in the private market, the Government had introduced, since quite some time, a balancing mechanism through various Drug Price Control Orders (DPCO).

Similarly, to contain its own health care expenditure, as HPS comes into force, the Government is expected to choose a digitalized and transparent drug procurement process. This would, almost certainly, prompt tough price negotiations for the purchase of medicines, as well.

Thus, HPS may further add to the current discomfort of the pharma players in this area, as they mostly want free pricing of drugs that will only be regulated by market forces. Unfortunately, market forces do not work for drugs. I explained it in an article, published in this blog on April 27, 2015, titled “Does Free Market Economy Work For Branded Generic Drugs In India?”

Industry lobbying for free pricing of drugs and devices:

It is well known that pharma industry, supported by other businesses dependent on it, including a section of the media, is still against such a move by the Indian policy makers, for various reasons. The primary one being, such pressure on drug prices would stifle  innovation, impacting patient access to the best possible health care.

Pharma Multination Corporations (MNC) appear to be in the forefront of this ‘innovation’ bandwagon to score a brownie point in this area, as many say. This is an ongoing process for them. Even recently, in the report titled, ‘2017 Accomplishments’, the US-India Business Council’s (USIBC) made a strong assertion in this regard, quite expectedly, though.

The report articulated, as part of advocacy around price controls, USIBC had sent a letter to the National Pharmaceutical Pricing Authority (NPPA), detailing American industry concerns on setting up ceiling prices for drugs and medical devices. USIBC, reportedly has also sent a letter, expressing its concern on the “serious problems for US companies that sell these products in the Indian market.” Advocacy initiatives of this kind, reportedly included the then Foreign Secretary, Minister of Commerce and Industries of India, and the Prime Minister’s Principal Secretary, as well.

Pricing pressure getting more intense, even in the US:

Curiously, a similar and equally interesting scenario is rapidly developing alongside in the largest pharma free-market economy in the world – the United States. On January 30, 2018, during his State of the Union address, President Donald Trump said that he wants his administration “to make fixing the injustice of high drug prices one of our top priorities.”

Likewise, as reported by Bloomberg on February 09, 2018, President Trump’s Health and Human Services Secretary – Alex Azar reaffirmed that he plans to take up the President’s promises to do something about pharmaceutical prices to reduce patients’ out-of-pocket spending. He assured, “The president is firmly committed in this space.” Incidentally, Alex Azar is a former executive at drug maker Eli Lilly & Co.

HPS needs efficient public procurement and logistics mechanisms:

As the cost of drugs and devices contribute so much to the total OOPE on health, together with ensuring patients’ easy access to convenient to reach primary, secondary and tertiary health care facilities – access to drugs, devices and diagnostics for the target population of HPS must also increase, effectively. Thus, bulk procurement and distribution of these, free of cost, at the designated health centers, assumes paramount importance for its success. Consequently, the trust of the HPS beneficiaries will keep ascending.

The Public Health Foundation of India (PHFI) too, had aptly asserted, any inefficiency due to poor governance, lack of transparency and inequities in public health financing and delivery would greatly impede access to medicines and diagnostics for those who would need these most.

Admitting its importance, the NHP 2017 noted: “Quality of public procurement and logistics is a major challenge in ensuring access to free drugs and diagnostics through public facilities. An essential prerequisite that is needed to address the challenge of providing free drugs through the public sector, is a well-developed public procurement system.”

Thus, putting in place an effective framework and process for this purpose, at both the central and the state government levels, as the situation would warrant, requires to be a key priority focus area of the HPS implementation process. There doesn’t seem to be any other viable choice, either.

Any need to ‘reinvent the wheel’?

The answer is, of course, ‘no’. Perhaps, to attain similar goals, the Government had established the fully autonomous Central Medical Services Society (CMSS) as a Central Procurement Agency (CPA). This was intended to streamline drug procurement and distribution system of the Ministry of Health and Family Welfare of India. Accordingly, the Gazette Notification on the formation of CMSS said that it:

  • Will be responsible for procuring health sector goods in a transparent and cost-effective manner and distributing them to the States/UTs by setting up an IT enabled supply chain infrastructure including warehouses in 50 locations.
  • Will ensure uninterrupted supply of health-sector goods to the State Government, which will then maintain the flow to the government health facilities, such as district hospitals, primary health centers and community health centers.
  • All decisions on procurement will be taken by the CMSS without any reference to the Ministry of Health and Family Welfare.
  • The Ministry will be responsible only for policy decisions concerning procurement and for monitoring its performance.
  • The CMSS will also assist the State Governments to set up similar organizations in states to reform their procurement.

Currently, CMSS carries out procurement for following ‘Disease Control and Welfare Programs’ of the Union Ministry of Health & Family Welfare:

  • Revised National Tuberculosis Control Program (RNTCP)
  • National Vector Borne Disease Control Program (NVBDCP)
  • Family Welfare Program (FWP)
  • National Aids Control Organization (NACO)

The scope of services of CMSS includes tendering, bid Evaluation, procurement decision, concluding rate agreement, placing purchase orders, receiving in stores, sampling and testing, releasing payment to suppliers and keeping stocks of drugs available in warehouses for distribution to state program offices.

So far as State Governments are concerned, a World Bank article says, the Tamil Nadu Medical Services Corporation (TNMSC) had successfully demonstrated a cost-effective model. This IT enabled system is an integral part in the supply chain infrastructure to support the management decisions, and adequate attention to quality in drug procurement.

CMSS follows similar processes to procure and distribute supplies to States through web-connected warehouses in State capitals. An IT vendor takes up the IT work with a quality control framework in place. Its warehouses are being equipped with necessary storing and warehousing equipment, which will distribute to the States the items that are procured by the Ministry. Since the warehouses will be connected through the IT system, it will be possible for the Society to monitor the inventory in warehouses preventing stock outs and wastage.

Many State governments have also adopted a similar reform process. However, any duplication in the drug procurement and logistics systems needs to be avoided.

Conclusion:

Hence, I reckon, CMSS can be extended to the procurement process of both the new ‘Health Protection Scheme (HPS)’ and also for the ‘Health and Wellness Centers,’ without trying to ‘reinventing the wheel.’

As stated before, this seemingly transparent drug procurement process for public use, would naturally involve tough price negotiations, leading to significant reduction, not just in drug prices, but also containing the overall HPS cost to the Government, enabling the country to experience the roll out of Universal Health Coverage (UHC) for all. From this perspective, it appears, while translating into reality, this noble Government intent of providing wider access to health care, including free medicines, overall pressure on drug prices may escalate further.

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.

Union Budget 2018: The ‘WOW’ Moment for Indian Healthcare?

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The 2018-19 Union Budget proposals, presented before the Parliament on February 01, 2018. Especially for those who take keen interest in the Indian healthcare environment, was there a ‘WOW’ moment in the budget? Some say, this long-awaited moment came with the Union Finance Minister’s (FM) announcement of the ‘Ayushman Bharat Program (ABP)’ – the “world’s largest healthcare program,” taking a major step towards the Universal Health Coverage (UHC) for all, in India.

Two other health care related major announcements made by the FM in his 2018 Union Budget proposal are:

  • 24 new government medical colleges by upgrading existing district hospitals.  This is to bridge the gap between doctor-patient ratio in the country.
  • An allocation of ₹60 million for nutritional support to all tuberculosis patients – ₹ 500 per month per patient for 10 months, during the duration of their treatment.

The ‘Ayushman Bharat Program (ABP)’:

In this article, I shall not touch upon what expectations of pharma and healthcare industries were not met with the budget, as that will no more than an academic deliberation, at this stage. I shall rather restrict my discussion to ABP, for obvious reasons. This potential game changer, covers two commendable initiatives, as follows:

1. The New Health Protection Scheme (HPS) offering health insurance coverage of ₹500,000 per family per annum, is expected to take under its wings 100 million vulnerable families, or around 500 million beneficiaries. The total budgetary allocation for this mega proposal, for which the detail contours, apparently, are yet to be fleshed out and made public.

Some Senior Government officials, though, have put across its sketchy outline during post-budget Television coverage, on last Thursday. However, many industry watchers construe HPS as an expanded version, with a different name, of the current ‘Rashtriya Swasthya Bima Yojana (RSBY)’, which provides annual coverage of just ₹30,000 for poor families.

A fund of just ₹20 billion has been earmarked for this mega project in the Union Budget 2018-19.

2. Creation of 150,000 health and wellness centers to provide ‘comprehensive health care’ – for prevention and treatment of both communicable and non-communicable diseases (NCDS), including maternal/child health services, and free essential drugs alongside diagnostic services. This will “bring healthcare closer to home”, as the FM articulated.

A sum of ₹1.2 billion (₹1200 crore) had been allocated for this project in the 2018 budget proposal. The FM also requested contributions from the private sectors through CSR, besides philanthropic entities, in adopting these centers.

The points to ponder before saying ‘WOW!’

So far so good. However, as the saying goes, the devil is in the detail. From that angle, sans any meaningful details, does it look merely as an expression of the Government’ intent? Or it is for real! This serious doubt emanates from some key considerations. Three of which, as I reckon, are as follows:

I. Is it the beginning of implementation of the much-awaited National Health Policy 2017 (NHP), where the Government had committed and expenditure for UHC around 2.5 percent of the India’s GDP? This number currently hovers around 1.4 percent –  reportedly, less than even Nepal (2.3 percent) and Sri Lanka (2 percent). There is no mention of this in the Union Budget Proposal 2018, either, how much it will now go up to. By the way, the same report, as above, of January 2018 also indicated that health costs push 39 million Indians back into poverty, every year.

  • Attaining the NHP 2017 objectives, prompts a rise of around 40 percent in the public health expenditure of the Government. Whereas, the allocated reported expenditure for health in 2018-19 at ₹52.8 billion over the revised estimate of ₹50.1 billion in 2017/18. This works out to an increase of just around 5.4 percent.
  • The allocated expenditure of ₹20 billion for ABP in 2018-19, over the last year’s (2017-18) very similar health budget for ‘National Health Mission (NRM)’, reportedly, of ₹26.70 billion, looks rather pale. The financial arithmetic doesn’t appear to add up, defying simple logic. Is the allocation enough to support the ABP for 2018-19, even if the ABP funding is shared in the ratio of 60:40 between the Central and the State Governments?
  • Diving slightly deeper, on February 02, 2018, quoting a Government official Reuters reported, the cost of providing health insurance to 100 million vulnerable families or close to about half the country’s population would require an estimated ₹110 billion (USD$ 1.72 billion) in central and state funding each year.
  • The government estimates the cost of insuring each family would be about ₹1,100 rupees (US$17.15), the above report says. Curiously, on the face of it, this huge amount appears as an ‘off balance sheet’ expenditure, as of now.
  • Intriguingly, when the ABP is still not in place, there has been, reportedly, a 2.1 percent decline in the allocation towards the NRM in 2018-19. Currently, NHM provides financial support to States to strengthen the public health system, including upgradation of existing or construction of new infrastructure. In addition, there is a 7 percent cut in the allocation for the ‘Swachh Bharat Mission’ Budget from 2017-18’s revised estimates.

II. The second question is equally critical. Just as the erstwhile State Sales Tax (now a part of GST), healthcare is also a state subject. Thus, a similar process of intensive consultation with all State Governments, as happened before the implementation of GST, to take them on board, has to be replicated for a consensus. This will include a commitment for 60:40 funding, alongside the mechanisms for effective implementation of ABP – step by step. Has that happened? Have all the States agreed to contribute 40 percent of total funding requirements in their respective states for ABP?

  • If the answer is yes – excellent! If not, when will the ABP be rolled out? Different senior government officials have indicated different dates on Television. Some said on the Independence Day this year – August 15, 2018. Some other official said on October 02, 2018 – Gandhi Jayanti of this year. Yet another responsible official said the actual implementation may, actually, take even more time. This could mean only one thing, the ABP has been announced without any fixed timeframe for its implementation.

III. The third question lies in the effectiveness of insurance-driven health care system, such as in the United States. The key question often is raised on this system: Do the health insurance companies derive more benefit out of this system rather than the patients?

  • Concurring with the experts of many other countries, India’s own – Dr. (Professor) K. Srinath Reddy, globally acclaimed cardiologist and the President, Public Health Foundation of India, reportedly is also of the opinion that “Government-funded social insurance schemes do increase access to advanced care. But they have not been shown to provide financial protection as they cover only part of the hospitalization cost and none of the expense of prolonged outpatient care which forms a higher percentage of out-of-pocket spending.”
  • Insurance-driven healthcare has been found wanting to properly balancing health insurance costs with access, quality of care and outcomes in several countries. The experience of most of those people in India who can avail the benefits of insurance-driven – the Rashtriya Swasthya Bima Yojana (RSBY) or Employee State Insurance Schemes (ESIS), are not very pleasant, either.
  • On the other hand, despite some peripheral issues, many prefer, the government run UHC, such as in Britain. These generally offer a broader health coverage to all, and most health and care related services are available free to the citizens. The UHC is fully funded by taxes there, though a private health care system exists along with it. Thus, serious apprehensions related to the depth of health care access, reach in the rural heartland, and the quality of product and services to be generally provided by the insurance-driven new HPS, continue to haunt.

Conclusion:

Considering all these aspects, renamed HPS, as it was announced by the FM on February 01, 2018, and subsequent incongruent and very tentative clarifications expressed through the media by some Senior Government officials, raises even more questions than answers.

Sans any transparent and well-laid out financial road map, detail mechanism of its operation, level of involvement and consensus reached with all the States on funding and implementation, specific timeframe for its rollout, besides addressing almost a collapsing public health-infrastructure framework in most States, the Government appears rather unprepared with HCP rollout in 2018.

Does this announcement for HCP, therefore, not reflect a bit of haste, if not an intent to achieve any other non-related objective? Thus, this edict didn’t fetch a WOW moment to me, at least for this year, or…did it?

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.