Tag Archives: Healthcare

Leverage the potential of ‘Telemedicine’ to effectively address the healthcare needs of India

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The World Health Organization (WHO) has defined telemedicine as follows:

“The delivery of healthcare services, where distance is a critical factor, by all healthcare professionals using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for continuing education of healthcare providers, all in the interests of advancing the health of individuals and their communities”

Telemedicine is gradually becoming popular in India, like in many other countries of the world. This emerging technology based healthcare service, will surely meet the unmet needs of the patients located in the far flung areas, by providing them access to medical specialists for treatment of even tertiary level of their ailments, without requiring to travel outside their villages or small towns where they reside. Telemedicine is, therefore, slowly but gradually emerging as a convenient and cost-effective way of treating even complicated diseases of the rural population.

The applications of Telemedicine:

1. To extend affordable quality healthcare services to those places where these are not available due to basic healthcare infrastructure and delivery issues.

2. Electronic transmission of clinical information of both synchronous and asynchronous types, involving voice and data transfer of patients to distantly located experts and get their treatment advice, online.

3. To effectively train the medics and the paramedics located in distant places and proper management of healthcare delivery/service systems.

4. Disaster management.

The Process:

The process can be:

- ‘Real time’ or synchronous when through a telecommunication link real time interaction between the patients and doctors/experts can take place. This technology can be used even for tele-robotic surgery.

- ‘Non-real time’ or asynchronous type when through a telecommunication link, stored diagnostics/medical data and other details of the patients are transmitted to the specialists for off-line assessment and advice at a time of convenience of the specialists.

These processes facilitate access to specialists’ healthcare services by the rural patients and the rural medical practitioners reducing avoidable travel time and related expenses. At the same time such interaction helps upgrading the knowledge of the rural medical practitioners and paramedics.

The Promise:

‘Telemedicine’ is capable of taking modern healthcare to remote rural areas using Information Technology (IT), as specialists are mostly based in the cities. As majority of the diseases do not require surgery, ‘telemedicine’ will prove to be very conducive to such patients and economical too.
Relevance of Telemedicine in India:

With its over 1.12 billion population and equally huge and not so well addressed disease burden, spreading across distant and remote semi-urban and rural areas where over 70 per cent of the population of the country lives, India by any standard is a country, which should focus on ‘Telemedicine’ to meet the unmet healthcare needs of the common man.

Telemedicine, therefore, is very relevant for the country, as it faces a scarcity of both hospitals and medical specialists. In India for every 10,000 of the population just 0.6 doctors is available. According to the Planning Commission, India is short of 600,000 doctors, 10 lakh nurses and 200,000 dental surgeons. Over 72 percent of Indians live in rural areas where facilities of healthcare are still grossly inadequate. Most of the specialists are reluctant to go to the rural areas. In addition, 80 percent of doctors, 75 percent of dispensaries and 60 percent of hospitals, are situated in urban India.

Telemedicine should be leveraged to bridge the gap of healthcare divide:

Equitable access to healthcare is the overriding goal of the National Health Policy 2002. Telemedicine has a great potential to ensure that the inequities in the access to healthcare services are adequately addressed by the country.

ISRO and the progress of Telemedicine in India:

The concept of ‘Telemedicine’ is relatively new in India and started drawing attention of the Government since 1999, when the Indian Space Research Organization (ISRO) deploying a SATCOM-based telemedicine network took its pioneering step towards this direction and is currently playing a key role in the evolution and development of ‘telemedicine’ in India. ISRO with its effective application of world class satellite communication technology with modern medical science and information technology has engaged itself very seriously to ensure availability of specialty healthcare services right at the doorsteps of a vast majority of deprived population living even in the distant and remote places of the rural India.

Government and private initiatives:

Since then the Ministry of Health and Family welfare with its initiative through information technology in some country level projects forming the National Telemedicine Taskforce, some private healthcare institutions like Apollo and various State Governments like, Tamil Nadu, Andhra Pradesh, Kerala and West Bengal also took admirable initiatives to translate the concept of ‘telemedicine’ into reality, especially for the rural India.

Subsequently, private telemedicine solution providers have now started coming-up, in a very sporadic manner though. Active participation of the civil society and meaningful Public private Partnership (PPP) projects are essential not only to get engaged in creating awareness for ‘telemedicine’ within India, but also to ensure that required blend of a high quality of technical and medical manpower that the country currently possesses are effectively utilized to establish India as a pioneering nation and a model to emulate in the field of telemedicine.

The market of Telemedicine in India:

Frost & Sullivan has estimated the telemedicine market of India at US$3.4 million, which is expected to record a CAGR of over 21 percent between 2007 and 2014.

Practices of Telemedicine in India:

Not only the central government of India, many state governments and private players are also entering into telemedicine in a big way with the Indian Space Research Organization (ISRO) playing a pivotal role, as indicated earlier. Some of the encouraging examples are as follows:

Telemedicine in Tamil Nadu:

Wi-Fi video conferencing network has now enabled ophthalmologists in the country to treat patients located in distant rural areas.

For example in an eye clinic in Andipatti village of Tamil Nadu state patients are connected through an inexpensive Wi-Fi video conferencing network with an ophthalmologist located about 15 kilometers away at the Aravind Eye Hospital in the city of Theni, for diagnosis and treatment of ophthalmological conditions. It has been reported that in the last six years eight such vision centers have been opened in the Theni district to provide eye treatment through ‘telemedicine’ to the affected population. These centers are managed by ophthalmic assistants trained to conduct a full eye examination, administer diagnostic tests, treat simple ailments and prescribe glasses. An ophthalmologist located as far away as 150 kilometers gives the final advice to the patients through videoconferencing and incurring a fraction of the expenses of what the patient would have otherwise incurred for getting treated at the district hospital of Theni.

World Health Organization (WHO) in its recent report has highlighted that about one third of the 45 million blind population of the world, live in India with majority of the causes being easily treatable cataracts and diabetes. It is worth mentioning that India has pledged to eliminate avoidable blindness in 10 years, under WHO 2020 initiative.

The Government of India is contemplating to create 20,000 more rural vision centers in the next few years.

Telemedicine in Kerala:

In Kerala selected referral Telemedicine Centers which are ‘Taluk Hospitals’ are connected to the Specialty hospitals through ISDN dial-up connection and the Telemedicine software MERCURY for creating and transferring the Electronic Medical Record (EMR) from sources like ECG, Microscope and Scanner.

A Telemedicine system for Cancer Patients called ‘CancerNet’ has also been created in the state for cancer detection, treatment, pain relief ,patient follow-up and continuity of care in peripheral hospitals (nodal centers) of Regional Cancer Centre (RCC). This facility connects RCC, Trivandrum and five nodal outreach centers. More than 3000 patients are treated or consulted in these nodal centers offering significant financial benefits to patients.

The specialty centers are located at:

• Medical College Hospital, Thiruvananthapuram
• Sree Chitra Thirunal Institute of Medical Science and Technology, Thiruvananthapuram
• Regional Cancer Center,Thiruvananthapuram
• Mental Health Centre, Thiruvananthapuram

The remote nodal centers are located at:

• Taluk Hospital, Neyyattinkara
• Taluk headquarters Hospital, Quilandy
• Taluk Hospital, Mavelikkara
• Taluk Hospital, Vythiri, Wayanad

Telemedicine in Andhra Pradesh:

Among the private initiatives the Apollo group of hospitals took a pioneering initiative in ‘telemedicine’ with a pilot project at a secondary level hospital in Aragonda village located about16 km away from the town Chittoor in Andhra Pradesh, covering a population of 5000.

Telemedicine in West Bengal:

Telemedicine for Tropical Diseases utilizing Technology developed by WEBEL & IIT Kharagpur has been developed by the state for diagnosis and monitoring of skin and blood related tropical diseases in West Bengal. The facility has been installed in School of Tropical Medicine, Kolkata and two District Hospitals. This is now being upgraded and extended to cover two referral hospitals and four District hospitals.

Telemedicine in North Eastern States:

A facility of Telemedicine Solution is being developed in Kohima Hospital of Nagaland under a Public Private Partnership (PPP) between the Government of Nagaland, Marubeni India Ltd, Apollo Hospitals and the Ministry of Communications and Information Technology. Two telemedicine centers are being set up connecting hospitals in the capitals of the North-eastern states, Sikkim and Tripura with super-specialty hospital under Community Information Centre scheme of DIT. North Eastern Council of India is planning to cover all 75 districts in seven states through Telemedicine.

Allocate more fund for Telemedicine:

Telemedicine now shows an immense potential, within the frugal healthcare infrastructure of India, to catapult rural healthcare services, especially secondary and tertiary, to a different level altogether. Current data indicate that over 278 hospitals in India have already been provided with telemedicine facilities. 235 small hospitals including those in rural areas are now connected to 43 specialty hospitals. ISRO provides the hospitals with telemedicine systems including software, hardware, communication equipment and even satellite bandwidth.

In 1999, India based one of the largest healthcare providers in Asia, The Apollo Hospitals Group also entered into telemedicine space. Today, the group has quite successfully established over 115 telemedicine locations in India, It has been reported that a ‘tele-consultation’ between the experts and the rural center ranges from 15 to 30 minutes in these facilities.

The state governments and private hospitals are now required to allocate adequate funds to further develop and improve penetration of Telemedicine facilities in India.

Issues with Telemedicine in India:

- Telemedicine is not free from various complicated legal, social, technical and consumer related issues, which need to be addressed urgently.

- Many a time, doctors feel that for Telemedicine they need to work extra hours without commensurate monetary compensation, as per their expectations.

- The myth created that setting up and running a Telemedicine facility is expensive needs to be broken, as all these costs can be easily recovered by any hospital through nominal charges to the patients.

- Inadequate and uninterrupted availability of power supply could limit proper functioning of a telemedicine center.

- High quality of Telemedicine related voice and data transfer is of utmost importance. Any compromise in this area may have significant impact on the treatment outcome of a patient.

- Lack of trained manpower for Telemedicine can be addressed by making it a part of regular medical college curriculum.

- Legal implications, if arise, out of any Telemedicine treatment need to be clearly articulated.

- A system needs to be worked out to prevent any possible misuse or abuse of the confidential Telemedicine treatment data of a patient.

- Reimbursement procedure of Telemedicine treatment costs by the medical insurance companies needs to be effectively addressed.

Conclusion:

Because of a very large population of India living in remote and distant rural areas, ‘telemedicine’ would play a very special and critical role in India to address the healthcare needs of the common man. With increasing coverage of telemedicine, it is imperative that required regulatory standards and guidelines for the same is put in place across the country.

Some significant and path breaking advances have indeed been made in the field of ‘telemedicine’ in India. It is though unfortunate that enough awareness for an optimal spread of this critical facility has been created, as yet to address the healthcare needs of a vast majority of the population in India, effectively. The pioneering role that ISRO has been playing in this field is also not known to many. All powerful ‘Fourth Estate’, I reckon, should now take more interest to initiate a healthy discussion and debate on this important healthcare solution, within the civil society.

By Tapan 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.

Path-breaking medicines are just not enough… a comprehensive healthcare reform in India is long overdue

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The Prime Minister of India, Dr. Manmohan Singh reiterated the following in his speech at the 30th Convocation of PGIMER, Chandigarh on November 3, 2009:

”As in economics, so as in medicine too, it is easy to get lost in high level research and forget the ground realities. A common perception among the public is that institutions running with public money end up as ivory towers. It is widely felt that the poor and under-privileged sections of our population do not have adequate access to the health care system. The system needs structural reforms to improve the quality of delivery of services at the grass-root level. It has to be more sensitive to the needs of our women and children. We must also recognize that a hospital centered curative approach to health care has proved to be excessively costly even in the advanced rich developed countries. The debate on health sector reforms is going on in US is indicative of what I have mentioned just now. A more balanced approach would be to lay due emphasis on preventive health care”.

Some key research findings on ‘Public Health’:

Interesting research studies on public health highlight two very interesting points:

- Health of an individual is as much an integral function of the related socio-economic factors as it is

influenced by the person’s life style and genomic configurations.
- Socio-economic disparities including the educational status lead to huge disparity in the space of healthcare.

WHO ranking of the ‘World’s Health Systems’:

The WHO ranking of the ‘World’s health Systems’ was last produced in 2000. This report is no longer produced by the WHO due to huge complexity of the task.

In this interesting report, the number one pharmaceutical market of the world and the global pioneer in pharmaceutical R&D, the USA features in no. 37, Japan in no. 10, UK in no.18 and France tops the list with no.1 ranking. Among emerging BRIC countries, India stands at no. 112, Russia in no.130 and China in no. 144.

In a relative yardstick, although India scored over the remaining BRIC countries in year 2000, one should keep in mind that China has already undertaken a major healthcare reform in the last year. Early this year, we all have seen how President Obama introduced a new healthcare reform for the USA, despite all odds. India’s major reform in its healthcare space is, therefore, long overdue.

Details of WHO ‘World’s Health Systems’ ranking of the countries are available at the following link:

http://www.photius.com/rankings/healthranks.html

No need to reinvent the wheel:

When we look at the history of development of the developed countries of the world, we observe that all of them had invested and are continuously investing to improve the social framework of the country where education and health get the top priority. Continuous reform measures in these two key areas of any nation have proved to be the key drivers of economic growth. This is a work in continuous progress. Recent healthcare reforms both in China and the USA will vindicate this argument. In India we, therefore, do not require to reinvent the wheel, any more.

It has been observed that reduction of social inequalities ultimately helps to effectively resolve many important healthcare issues. Otherwise, the minority population with adequate access to knowledge, social and monetary power will always have necessary resources available to address their concern towards healthcare, appropriately.

Path breaking medicines are just not enough:

Regular flow of newer and path breaking medicines in India to cure and effectively treat many diseases, have not been able to eliminate either trivial or dreaded diseases, alike. Otherwise, despite having effective curative therapy for malaria, typhoid, cholera, diarrhea/dysentery and venereal diseases, why will people still suffer from such illnesses? Similarly, despite having adequate preventive therapy, like vaccines for diphtheria, tuberculosis, polio, hepatitis and measles, our children still suffer from such diseases.

Reducing socio-economic inequalities is equally important:

All these continue to happen in India, over so many decades, because of socio-economic considerations, as well. Thus, together with comprehensive healthcare reform measures, time bound simultaneous efforts to reduce the socio-economic inequalities will be essential to achieve desirable outcome for the progress of the nation.

Proper focus on education is critical for a desirable health outcome:

Education is of key importance to make any healthcare reform measure to work effectively. Very recently we have witnessed some major reform measures in the area of ‘primary education’ in India. The right to primary education has now been made a fundamental right of every citizen of the country, through a constitutional amendment.

As focus on education is very important to realize the economic potential of any nation, so is equally relevant in the healthcare space of the country. India will not be able to realize its dream to be one of the economic superpowers of the world without a sharp focus and significant resource allocation in these two critical areas – Health and Education, simultaneously.

Progress in the healthcare space of India:

It sounds quite unfair, when one comments that nothing has been achieved in the area of healthcare in India, as is usually done by vested interests with a condescending attitude in various guises. Since independence, India has made progress, may not be highly significant though, with various government sponsored and private healthcare related initiatives, as follows:

- Various key disease awareness/prevention programs across the country, for both communicable and non-communicable diseases.
- Eradication of smallpox
- Excellent progress in polio eradication program
- Country wide primary vaccination program
- Sharp decline in the incidence of tuberculosis
- Significant decrease in mortality rates, due to water-borne diseases.
- Good success to bring malaria under control.
- The mortality rate per thousand of population has come down from 27.4 to 14.8 percent.
- Life expectancy at birth has gone up to 63 years of age.
- Containment of HIV-AIDS
- India has been recognized as the largest producers and global suppliers of generic drugs of all categories and types.
- India has established itself as a global outsourcing hub for Contract Research and Contract Manufacturing Services (CRAMS).
- The country has now been globally recognized as one of the fastest growing emerging markets for the pharmaceuticals

New healthcare initiatives in India:

There are various hurdles though to address the healthcare issues of the country effectively, but these are not definitely insurmountable. National Rural health Mission is indeed an admirable scheme announced by the Government. Similar initiative to provide health insurance program for below the poverty line (BPL) population of the country, is also commendable. However, effectiveness of all such schemes will warrant effective leadership at all levels of their implementation.

Per capita public expenditure towards healthcare is inadequate:

Per capita public expenditure towards healthcare in India is much lower than China and well below other emerging countries like, Brazil, Russia, China, Korea, Turkey and Mexico.

Although spending on healthcare by the government gradually increased in the 80’s overall spending as a percentage of GDP has remained quite the same or marginally decreased over last several years. However, during this period private sector healthcare spend was about 1.5 times of that of the government.

It appears, the government of India is gradually changing its role from the ‘healthcare provider’ to the ‘healthcare enabler’.

High ‘out of pocket’ expenditure towards healthcare in India:

According to a study conducted by the World Bank, per capita healthcare spending in India is around Rs. 32,000 per year and as follows:

- 75 per cent by private household (out of pocket) expenditure
- 15.2 per cent by the state governments
- 5.2 per cent by the central government
- 3.3 percent medical insurance
- 1.3 percent local government and foreign donation

Out of this expenditure, besides small proportion of non-service costs, 58.7 percent is spent towards primary healthcare and 38.8% on secondary and tertiary inpatient care.

Role of the government:

In India the national health policy falls short of specific and well defined measures.

Health being a state subject in India, poor coordination between the center and the state governments and failure to align healthcare services with broader socio-economic developmental measures, throw a great challenge in bringing adequate reform measures in this critical area of the country.

Healthcare reform measures in India are governed by the five-year plans of the country. Although the National Health Policy, 1983 promised healthcare services to all by the year 2000, it fell far short of its promise.

Underutilization of funds:

It is indeed unfortunate that at the end of most of the financial years, almost as a routine, the government authorities surrender their unutilized or underutilized budgetary allocation towards healthcare. This stems mainly from inequitable budgetary allocation to the states and lack of good governance at the public sector healthcare delivery systems.

Encourage deep penetration of ‘Health Insurance’ in India:

As I indicated above, due to unusually high (75 per cent) ‘out of pocket expenses’ towards healthcare services in India, a large majority of its population do not have access to such quality, high cost private healthcare services, when public healthcare machineries fail to deliver.

In this situation an appropriate healthcare financing model, if carefully worked out under ‘public – private partnership initiatives’, is expected to address these pressing healthcare access and affordability issues effectively, especially when it comes to the private high cost and high quality healthcare providers.

Although the opportunity is very significant, due to absence of any robust model of health insurance, just above 3 percent of the Indian population is covered by the organized health insurance in India. Effective penetration of innovative health insurance scheme, looking at the needs of all strata of Indian society will be able to address the critical healthcare financing issue of the country. However, such schemes should be able to address domestic and hospitalization costs of ailments, broadly in line with the health insurance model working in the USA.

The Government of India at the same time will require bringing in some financial reform measures for the health insurance sector to enable the health insurance companies to increase penetration of affordable health insurance schemes across the length and the breadth of the country.

A recent report on healthcare in India:

A recent report published by McKinsey Quarterly, titled ‘A Healthier Future for India’, recommends, subsidizing health care and insurance for the country’s poor people would be necessary to improve the healthcare system. To make the healthcare system of India work satisfactorily, the report also recommends, public-private partnership for better insurance coverage, widespread health education and better disease prevention.

Conclusion:

In my view, the country should adopt a ten pronged approach towards a new healthcare reform process:

1. The government should assume the role of provider of preventive and primary healthcare across the nation to ensure access to healthcare to almost the entire population of the nation.

2. At the same time, the government should play the role of enabler to create public-private partnership (PPP) projects for secondary and tertiary healthcare services at the state and district levels.

3. The issue of affordability of medicine can best be addressed by putting in place a robust model of healthcare financing for all sections of the population of the country. Through PPP a strong and highly competitive health insurance infrastructure needs to be created through innovative fiscal incentives.

4. These insurance companies will be empowered to negotiate all fees payable by the patients for getting their ailments treated including doctors/hospital fees and the cost of medicines, with the concerned persons/companies, with a key objective to ensure access to affordable high quality healthcare to all.

5. Create an independent regulatory body for healthcare services to regulate and monitor the operations of both public and private healthcare providers/institutions, including the health insurance sector.

6. Levy a ‘healthcare cess’ to all, for effective implementation of this new healthcare reform process.

7. Effectively manage the corpus thus generated to achieve the healthcare objectives of the nation through the healthcare services regulatory authority.

8. Make this regulatory authority accountable for ensuring access to affordable high quality healthcare services to the entire population of the country.

9. Make operations of such public healthcare services transparent to the civil society and cost-neutral to the government, through innovative pricing model based on economic status of an individual.

10. Allow independent private healthcare providers to make reasonable profit out of the investments made by them

By Tapan 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.

Innovative Public Private Partnership (PPP) in Healthcare Financing is the way forward to improve ‘Affordability’ and ‘Access’ to Healthcare’ in India

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Despite various measures taken by the Government of India (GoI), around 65% of the population do not have access to modern medicines in the country. Such medicines do not include treatment just for ‘Tropical Diseases’ like, Malaria, Tuberculosis, Filariasis or Leishmaniasis or even anaemia in women. These medicines, in fact, cover much wider spectrum of the primary healthcare needs of the country and include antibiotics, anti-hypertensive, anti-diabetics, anti-arthritic, anti-ulcerants, cardiovascular, oncology. anti-retroviral etc. Many stakeholders in the country, including the policy makers feel that the reason for poor access to medicines to a vast majority of Indian population is intimately linked to the affordability of medicines.

A bold public measure to achieve the dual objectives:                           To make medicines affordable to the common man and at the same time to create a robust domestic pharmaceutical industry in the country, the Government took a bold step in early 1970 by passing a law to abolish product patent in India.

The changed paradigm, encouraged domestic pharmaceutical companies to manufacture and market even those latest drugs, which were protected by patents in many countries of the world, at that time. This policy decision of the GoI enabled the domestic players to specialize in ‘reverse engineering’ and launch the generic versions of most of the New Chemical Entities (NCEs) at a fraction of the innovators price, in India.
Simultaneously other low cost ‘essential medicines’ continued to be produced and marketed in the country.

‘Reverse Engineering’ – a huge commercial success in India:
From 1972 to 2005 domestic Indian pharmaceutical companies were replicating most, if not all the blockbuster drugs of the world, to their low price generic substitutes, just within a year or two from the date of their first launch in the developed markets of the world. These innovative drugs include quinolones. H2 Receptor anatagonists, proton pump inhibitors, calcium channel blockers, ace inhibitors, Cox2 inhibitors, statins, anti-coagulants, anti-asthmatic, anti-cancer, anti-HIV and many more.

In 1970, the Market share of the Indian domestic companies, as a percentage of turnover of the total pharmaceutical industry of India, was around 20%. During the era of ‘reverse engineering’, coupled with many top class manufacturing and marketing strategies, domestic Indian pharmaceutical companies wheezed past their multinational (MNCs) counterparts in the race of market share, exactly reversing the situation in 2010.

‘Reverse engineering’ was indeed one of the key growth drivers of domestic pharmaceutical industry. In its absence, during this period, the growth rate of branded generic industry may not be as spectacular.

India – now the ‘Eldorado’ of the pharmaceutical world:
This shift in the Paradigm in 1970, catapulted the Indian domestic pharmaceutical industry to a newer height of success. India in that process, over a period of time, could establish itself as a major force to reckon with in the generic pharmaceutical market of the world. Currently, the domestic pharmaceutical industry in India caters to around one third of the global requirement of generic pharmaceuticals and is a net foreign exchange earner for the country.

Currently, within top ten pharmaceutical companies of India, eight are domestic companies. All those global pharmaceutical companies who had left the shores of India and many more, have returned to the country after India signed the WTO agreement in January 1995 with great expectations.

Government feels quite confident and exudes a sense of accomplishment with its pharmaceutical policies:
The government therefore believes that a combination of these policy measures resulting in the stellar success of the domestic pharmaceutical companies since last four decades has helped the country earning the global recognition as one of the most attractive emerging pharmaceutical markets of the world, with commensurate and sustainable ascending growth trend.

Has stringent Price Control/Monitoring of Medicines worked in India?
Be that as it may, from 1970 to 2005, India could produce and offer even the latest NCEs at a fraction of their international price, to the Indian population. There are as many as 40 to over 60 Indian branded generic versions for each successful blockbuster drug of the world. Competition has been intense and cut-throat, which keeps the average price well within the reach of common man. Average price of medicines in India is even lower than that of Pakistan, Bangladesh and Sri Lanka. Thus the combination of price control, price monitoring, fear of price control and cut throat competition within branded generics have been able to drive down the prices of medicines in India.

Has the focus mostly on ‘Price’ been able to resolve the issue of poor access to modern medicines by the common man?                       Although the GoI should be complemented for the above measures and putting in place the Product Patents Act in India effective January 1, 2005, the issue of access to modern medicines to the common man has still remained unanswered in the country. Why then access to medicines in India is confined to just to 35% of the population even after 62 years of Independence of the country? Comparable figures of access for Africa and China are 53% and 85%, respectively. This is indeed an abysmal failure on the part of the government to achieve the core healthcare objective of the nation.

Strategy adopted to address the core issue of ‘affordability’ and ‘access’ to healthcare and medicines are grossly inadequate:
Despite the stellar success of the pharmaceutical industry in India thus far, there is a pressing need for the government to address this vexing problem without further delay. The situation demands from the policy makers to put in place a robust healthcare financing model in tandem with significant ‘capacity building’ exercise, initially in our primary and then in the secondary and tertiary healthcare value chain.

Towards this direction, the Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested to the Government for an investment of around US$ 80 billion to create over 2 million hospital beds.

Government changing its role from ‘Healthcare Provider’ to ‘Healthcare Facilitator’:
Frugal budget allocation (0.9%) by the GoI towards healthcare as % of GDP of the country and its other healthcare related policy statements suggest that government is changing its role in this area from a healthcare provider to a healthcare facilitator for the private sectors to develop the healthcare space of the country adequately.

In such a scenario, it is indeed imperative for the government to realize that the lack of even basic healthcare financing model and primary healthcare infrastructure in many places across the country, leave aside other fiscal incentives, will impede the penetration of private sectors into semi-urban and rural areas. Innovative PPP model should be worked out to address such issues, effectively.

Laudable projects like NRHM and ‘Jan Aushadhi’ must deliver:
Over 70% of Indian population are located in rural India. A relatively recent study indicates that despite some major projects undertaken by the Governments, like National Rural Health Mission (NRHM), about 80% of doctors, 75% dispensaries and 60% of hospitals are located in urban India.

Another recent initiative taken by the Department of Pharmaceuticals (DoP) called ‘Jan Aushadhi’ is also orientated towards urban and semi-urban India. Unfortunately even in those areas the scheme has failed to deliver against the objectives set by the department of pharmaceuticals (DoP) themselves.
The net result of such a lack of firm intent to deliver by all concerned denies 65% of Indian population from having access to modern medicines and other basic healthcare services within the country.

Address the issue of ‘Affordability’ and ‘Access’ to medicines and healthcare with a robust ‘Health Insurance’ model for all:
While trying to find out a solution to these critical issues, by restricting the focus only on the ‘prices of medicines’ for several decades from now, the Government is doing a great disservice to the common man.
Let me hasten to add that I am in no way suggesting that the prices of medicines have no bearing on their ‘Affordability’. All I am suggesting here is that the issue of ‘Affordability’ and ‘Access’ to modern medicines could be better and more effectively addressed with a robust ‘Health Insurance’ model for all, in the country.

Sporadic initiatives towards this direction:

We find some sporadic initiatives in this direction for population below the poverty line (BPL) with Rashtriya Swasthya Bima Yojana (RSBY) and other health insurance schemes through micro health insurance units, especially in rural India. It has been reported that currently around 40 such schemes are active in the country. Most of the existing micro health insurance units run their own independent insurance schemes.

Some initiatives by the State Governments:

Following initiatives, though quite limited, are being taken by the state governments:

1. The Government of Andhra Pradesh has planned to offer health insurance cover under ‘Arogya Sri Health Insurance Scheme’ to 18 million families who are below the poverty line (BPL).

2. The Government of Karnataka has partnered with the private sector to provide low cost health insurance coverage to the farmers who previously had no access to insurance, under “Yeshaswini Insurance scheme”. This scheme covers insurance cover towards major surgery, including pre-existing conditions.

3. Some other state governments have also started offering public health insurance facilities to the rural poor, but not in a very organized manner. In fact, some private health insurers like Reliance General Insurance and ICICI Lombard General Insurance have been reported to have won some projects on health insurance from various state governments.
Covering domiciliary treatment through health insurance is important:

Currently health insurance schemes mostly cover expenses towards hospitalization. However, medical insurance schemes should also cover domiciliary treatment costs and loss of income, along with hospitalization costs.

Government policy reforms towards health insurance are essential:
Currently Indian health insurance segment is growing over 50% and according to PHD Chamber of Commerce and Industries the segment is estimated to grow to US$ 5.75 billion by 2010. Even this number appears to be much less than adequate for a country like India.

It is high time that the Government creates a conducive environment for increased penetration of health insurance within the country through innovative policy measures. One such measure could be by making health insurance cover mandatory for all employers, who provide provident fund facilities to their employees.

Conclusion:
It is a pity that the concept of health insurance has not properly taken off in our country, as yet, though shows immense growth potential in the years to come. Innovative policies of the government towards this direction along with increasing the cap on Foreign Direct Investment (FDI) for health insurance will encourage many competent and successful global players to enter into this market.

With the entry of efficient and successful global players in health insurance segment, one can expect to see many innovative insurance products to satisfy the needs of a large section of Indian population. Such an environment will also help increasing the retail distribution network of health insurance with a wider geographic reach, significantly improving the affordability and access to healthcare in general and medicines in particular, of a large number of population of the country.

By Tapan 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.

Challenges for the Pharmaceutical Industry in the new paradigm – there are more questions than answers

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To get insight into the future challenges of the pharmaceutical industry in general ‘Complete Medical Group’of U.K recently conducted a study with a sizeable number of senior participants from the pharmaceutical companies of various sizes and involving many countries. The survey covered participants from various functional areas like, marketing, product development, commercial, pricing and other important areas.
The study indicates that a paradigm shift has taken place in the global pharmaceutical industry, where continuation with the business strategies of the old paradigm will no longer be a pragmatic approach. Besides this finding, my experience also vindicates that today is not a mega yesterday, just as tomorrow will not be a mega today.
Learning from the results of the above study, which brought out several big challenges facing the pharmaceutical industry in the new paradigm, my submissions are as follows:

Gaining greater market access and increasing pressure of price containment:

The increasing power of payors in the developed world and the interventions of the Government in the developing countries are creating an all pervasive pricing pressure. This critical development together with the issues related to gaining greater market access remain a prime concern for the future.

Better understanding of the new and differential value offerings that the doctors and patients will increasingly look for beyond the physical pharmaceutical products, will indeed be the cutting edge for the winners, in this new ball game.

Questioning the relevance of the current business model:
Top managements of the pharmaceutical companies have already started evaluating the relevance of the current global pharmaceutical business model. They will now need to include in their strategy wider areas of healthcare value delivery system with a holistic disease management focus. Only treatment of diseases will not be considered just enough with an offering of various type medications. Added value with disease prevention initiatives and appropriately managing quality of life of the patients, especially in case of chronic ailments, will assume increasing importance in the pharmaceutical business process.

Greater innovation across the pharmaceutical value chain:
Greater and more frequent incremental innovation across the pharmaceutical Value Chain will be critical success factors. The ability to really harness new technologies, rather than just recognize their potential, and the flexibility to adapt to the fast changing and demanding regulatory environment together with patients’ newer value requirements, should be an important part of the business strategy of a pharmaceutical company in the new world order.

Well integrated decision making processes:
More complex, highly fragmented and cut throat competition, especially in the branded generic market, have created a need for better, more aligned and integrated decision making process across various functional areas of the pharmaceutical business. Avoiding silos and empire building have long been a significant issue, especially for big pharmaceutical companies. Part of better decision making will include more pragmatic and efficient investment decisions and jettisoning all those activities, which are duplications and will no longer deliver incremental intrinsic or extrinsic differential value to the stakeholders.

Customer engagement:
Growing complexity of the prevailing business environment, including most recent change in the MCI regulations for the doctors are making meaningful interactions with the customers and decision makers increasingly challenging. There is a greater need for better management of the pharmaceutical communications channels to strike a right balance between ‘pushing’ information to the doctors and patients and helping them ‘pull’ the relevant information whenever required.

Let me hasten to add, even in the new paradigm, the fundamental way the pharmaceutical industry has been attempting to address these critical issues over decades, has not changed much. To unleash the future growth potential the pharmaceutical companies are still moving around the same old issues like, innovative new product development, scientific sales and marketing, customer focus, application of information technology (IT) in all areas of strategy making process including supply chain, building mega product brands, continuing medical education, greater market penetration skills, to name just a few.

Such responses do ring an alarm bell to me. It is known to many that most of the pharmaceutical companies have been investing in all these areas since long and yet these are the very points being highlighted even in the new paradigm to meet the “Challenge of Change”. The moot question will therefore be, what have all investments in these areas achieved, so far? And why have we not been able to address the needs of the new world order focusing with these tools? More importantly, if we do not address these issues moving ‘outside the box’ and with ‘lateral thinking’ even now, one can well imagine what could the implications be in the times to come?

The future Business Model will need to different:
I believe, the underlying business model of large global organizations focused primarily on developing New Chemical/Molecular Entities (NCEs/NMEs) from initial product discovery through development and commercialization, is unlikely to continue to yield results in the new era. The issue of ‘Patent Cliff’ has already started haunting the research based companies and assuming larger dimensions day by day.
Global pharmaceutical businesses have started evolving beyond patented drugs and including generics to create more diversified and robust healthcare businesses. It is quite evident from the strategies of many larger global pharmaceutical companies that this process has already begun.

Will R&D be collaborative in nature in future?
Currently R&D cost to launch a new patented drug in the market is reported to be around US$ 1.8 – 2.0 billion with accompanying huge risk factors. Thus there is a need to re-evaluate the R&D model of the pharmaceutical companies to make it cost effective with lesser built-in risk factors.
Could there be a collaborative model for R&D, where multiple stakeholders will join hands to discover new patented molecules? In this model all involved parties would be in agreement on what will be considered as important innovations and share the risk and reward of R&D as the collaborative initiative progresses. The Translational Medicine Research Collaboration (TMRC) partnering with Pfizer and others, ‘Patent Pool’ initiative for tropical diseases of GSK and OSDD for Tuberculosis by CSIR in India are examples of steps taken towards this direction.
Surely such collaborative initiatives are not easy but they are not uncommon either, as we witness these, especially in areas like IT. So why cost effective collaborative R&D projects be not initiated to create a win-win situation for all stakeholders in the healthcare space?

Could building pharmaceutical mega brands go beyond just a product for better ROI?
Building brands involve creating equity around an entity that delivers value to the customer, over and above the key functional properties of product. Traditionally, the global pharmaceutical industry has been largely focusing on building mega product brands having specific product life cycle say about ten years, especially for patented products.

Could the core idea of building a mega pharmaceutical brand be substantially different, in future?
I reckon, yes. Instead of investing huge sums in building pharmaceutical product brands with very limited product life cycle (for patented products), a more dynamic, powerful and cost efficient brand building process could well entail focusing on the ‘Corporate franchise’ brands with a mix of both patented and generic products in different price bands for different customer segments within a specific therapy category or disease area.

So instead of consistently creating, building and watching the mega patented pharmaceutical brands grow, mature and die, pharmaceutical companies could well encash the real opportunity to build long term emotional equity into their brands, hopefully without the suffocating NPPA restrictions associated with the current product brands.

Who knows, tomorrow’s list of the world’s top mega brands will not be dominated by the likes of Lipitor, Nexium, Plavix or Advair, but perhaps by quite a different types of mega brands like for example, GSK Vaccines, Sanofi-aventis Endocrinology, Novo-Nordisk Diabetic Care, Abbott Nutrition or Pfizer Cardiac Care.

Serum Institute Vaccines could be considered as one such brand for vaccines as a category, created within the pharmaceutical arena in India, over a long period of time.

Conclusion:
It is indeed quite clear now that the pharmaceutical business models are undergoing a serious re-evaluation in the new paradigm. I get a sense that the change is inevitable due to a variety of trends that are squeezing both sales and margins, posing severe challenges towards R&D, product development, marketing and communications.

As I have deliberated, some kind of solutions are gradually emerging. However, the key questions of how profound will this change be and how well the pharmaceutical companies are prepared to counter these changes, still remain unanswered.

By Tapan 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.

Access to affordable healthcare to 65% of Indian population still remains a key issue even after six decades of independence of the country.

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Despite so much of stringent government control, debate and activism on the affordability of modern medicines in India, on the one hand, and the success of the government to make medicines available in the country at a price, which is cheaper than even Pakistan, Bangladesh and Sri Lanka, on the other, the fact still remains, about 65% of Indian population does not have access to affordable modern medicines, as compared to just 15% in China and 22% in Africa.The moot question therefore arises, despite all these stringent price regulation measures by the government and prolonged public debates over nearly four decades to ensure better ‘affordability of medicines’, why then ‘access to modern medicine’ remained so abysmal to a vast majority of the population of India, even after sixty years of independence of the country?This vindicates the widely held belief that in India no single minister or ministry can be held accountable by the civil society for such a dismal performance in the access to healthcare in the country. Is it then a ‘system flaw’? May well be so.

Poor healthcare infrastructure:

As per the Government’s own estimate, India falls far short of its minimum requirements towards basic public healthcare infrastructure. The records indicate, as follows:

1. A shortage of 4803 Primary Health Centres (PHC)

2. A shortage of 2653 Community Health Centres (CHC)

3. No large Public Hospitals in rural areas where over 70% of the populations live

4. Density of doctors in India is just 0.6 per 1000 population against 1.4 and 0.8 per 1000 population in China and Pakistan respectively, as reported by WHO.

The Government spending in India towards healthcare is just 1.1% of GDP, against 2% of China and 1.6% of Sri Lanka, as reported by the WHO.

Some good sporadic public healthcare initiatives to improve access:

The government allocation around US$2.3 billion for the National Rural Health Mission (NRHM), is a good initiative to bring about uniformity in quality of preventive and curative healthcare in rural areas across the country.
While hoping for the success of NRHM, inadequacy of the current rural healthcare infrastructure in the country with about 80 percent of doctors, 75 percent dispensaries and 60 percent of hospitals located only in the urban India may encourage the skeptics.

PPP to improve access to medicines:

At this stage of progress of India, ‘Public Private Partnership (PPP)’ initiatives in the following four critical areas could prove to be very apt to effectively resolve this issue

1. PPP to improve affordability:

It appears that in earlier days, the policy makers envisaged that stringent drug price control mechanism alone will work as a ‘magic wand’ to improve affordability of medicines and consequently their access to a vast majority of Indian population.

When through stricter price control measures the access to medicines did not improve in any significant measure, the industry associations reportedly had jointly suggested to the government for a policy shift towards public-private-partnership (PPP) model way back in December 2006. The comprehensive submission made to the government also included a proposal of extending ‘concessional price for government procurement’ under certain criteria.

In this submission to the government, the industry did not suggest total price de-regulation for the pharmaceutical industry of India. Instead, it had requested for extension of the price monitoring system of the ‘National Pharmaceutical Pricing Authority (NPPA)’, which is currently working very effectively for over 80 percent of the total pharmaceutical industry in India. Balance, less than 20 percent of the industry, is currently under cost-based price control.

However, the argument of the NPPA against this suggestion of the pharmaceutical industry is that the market entry price of any formulation under the ‘price monitoring’ mechanism is not decided by the government. Hence without putting in place any proper price control/negotiation system to arrive at the market entry price of the price decontrolled formulations, the existing ‘price monitoring’ mechanism may not be as effective, as in future more and more high price patented non-schedule formulations are expected to be introduced in the market.

However, the government seems to have drafted a different drug policy, which has now been referred to a new Group of Ministers for approval. It is worth noting that to make the PPP proposal of the industry effective, the Ministry of Health, both at the centre and also at the state levels, will require to quickly initiate significant ‘capacity building’ exercises in the primary and also in the secondary healthcare infrastructural facilities. FICCI is reported to have suggested to the Government for an investment of around US$ 80 billion to create over 2 million hospital beds for similar capacity building exercises.

Frugal budgetary allocation towards healthcare could well indicate that the government is gradually shifting its role from public healthcare provider to healthcare facilitator for the private sectors to help building the required capacity. In such a scenario, it is imperative for the government to realize that the lack of even basic primary healthcare infrastructure leave aside other financial incentives, could impede effective penetration of private sectors into semi-urban and rural areas. PPP model should be worked out to address such issues, as well.

2. PPP to leverage the strength of Information Technology (IT) to considerably neutralize the healthcare delivery system weaknesses:

Excellence in ‘Information Technology’ (IT) is a well recognized strength that India currently possesses. This strengths needs to be leveraged through PPP to improve the process weaknesses. Harnessing IT strengths, in the areas of drug procurement and delivery processes, especially in remote places, could hone the healthcare delivery mechanism, immensely.

3. PPP in ‘Telemedicine’:

‘‘Telemedicine” is another IT enabled technology that can be widely used across the nation to address rural healthcare issues like, distant learning, disease prevention, diagnosis and treatment of ailments.
Required medicines for treatment could be made available to the patients through ‘Jan Aushadhi’ initiative of the Department of Pharmaceuticals (DoP), by properly utilising the Government controlled public distribution outlets like, ration shops and post offices, which are located even in far flung and remote villages of India.

4. PPP in healthcare financing for all:

Unlike many other countries, over 72 percent of Indian population pay out of pocket to meet their healthcare expenses.

While out of a population of 1.3 billion in China, 250 million are covered by insurance; another 250 million are partially covered and the balance 800 million is not covered by any insurance, in India total number of population who have some healthcare financing coverage will be around 200 million and the penetration of health insurance is just around 3.5% of the population. India is fast losing grounds to China mainly due to their better response to healthcare needs of the country.

As the government has announced ‘Rashtriya Swasthaya Bima Yojna (RSBY)’ for the BPL families, an integrated and robust healthcare financing model for all, is expected to address the affordability issue more effectively.

According to a survey done by National Sample Survey Organisation (NSSO), 40% of the people hospitalised in India borrow money or sell assets to cover their medical expenses. A large number of population cannot afford to required treatment, at all.

Conclusion:

An integrated approach by creating effective healthcare infrastructure across the country, leveraging IT throughout the healthcare space and telemedicine, appropriately structured robust ‘Health Insurance’ schemes for all strata of society, supported by evenly distributed ‘Jan Aushadhi’ outlets, deserve consideration of the government to improve access to affordable healthcare to a vast majority of population of the country, significantly.

Well researched PPP models in all these areas, involving the stakeholders, need to be effectively implemented, sooner, to address this pressing issue.

By Tapan 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.

The Union Budget 2010-11…the issue of improving access to healthcare…encouraging innovation… and beyond

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The Primary role of the pharmaceutical industry in India, like in many other countries of the world, is to make significant contribution to the healthcare objectives of the nation by meeting the needs of the ailing patients through improved access to modern medicines.

This role could be fulfilled primarily in the three following ways through Public Private Partnership initiatives:

1. By improving the healthcare infrastructure and the healthcare delivery systems
2. By creating a favorable echo system for developing newer innovative medicines through R&D initiatives in the country
3. By taking policy measures towards a robust healthcare financing system for all strata of our society

Improving access to modern medicines:

In the Union Budget 2010–11, the Finance Minister has proposed an increase in allocation towards healthcare from Rs. 19,354 Crore to Rs. 22,300 Crore. It is expected that a significant part of this increased allocation will be utilized in improving healthcare infrastructure and delivery systems, in the country.

Moreover, extension of ‘Tax Holiday’ for hospitals set-up in rural areas from 5 to 10 years, is expected to encourage development of rural healthcare infrastructure. The Finance Minister has also proposed that ‘Tax Holiday’ will be available for hospitals set-up even outside rural areas.

The proposal for extension of health insurance to NREGA beneficiaries is also expected to have a positive impact in improving access to modern medicines within this sector of the population.

It is my strong belief that currently, improving access to healthcare in general and medicines in particular along with encouraging innovation, should be the top-priorities of our policy makers. High incidence of mortality and morbidity burden in a country like ours can only be addressed through such priority measures. It is believed that Indian Pharmaceutical Industry would always remain committed to actively support all such efforts from all corners to help achieving this objective.

Encouraging innovation:

The budgetary proposal of enhancement of scope of weighted deduction on expenditure incurred on in-house R&D to 200% and the same on payments made to national laboratories, research associations, colleges, universities and other institutions for scientific research to 175%, are welcome steps.

However, in my view only the above steps are not adequate enough to properly encourage innovation within the country. Ongoing efforts in Research & Development (R&D) would require a robust national policy environment that would encourage, protect and reward innovation. Improving healthcare environment in partnership with the Government remains a priority for the pharmaceutical industry in India.

Despite progress made over the past decades in developing new medicines for some acute and chronic illnesses by both the Indian pharmaceutical companies and R&D organizations, innovation, like in other developed countries, still remains critically important in the continuous and ever complex battle between disease and good health in India.

Other encouraging budget proposals:

The following proposals of the Finance Minister are also expected to benefit the Industry:

- An annual Health Survey to prepare the District Health Profile of all districts in 2010-11

- Uniform concessional basic duty of 5% for all medical appliances and exemption of import duty from specified inputs for the manufacture of orthopedic implants, are good initiatives.

- Reduction of Corporate surcharge from 10% to 7.5%, though corporate Minimum Alternate Tax has gone up to 18%

- Tax incentives for the business of setting up and operating “Cold Chain” infrastructure, which is an integral part in the logistics for vaccines and many biotech products

- Under section 10B, extension of sunset clause is expected to benefit the Export Oriented Units (EOUs)

Adverse impact on affordability:

Some steps taken in the Union budget may have major impact on the Indian Pharmaceutical Industry, which are as follows:

• Goods and Service Tax (GST) coming in April 1, 2011 and Minimum Alternate Tax (MAT) hiked to 18% could prompt restructuring of ‘supply chain’ of many companies

• Increase in fuel prices and withdrawal of ‘Service Tax’ exemption on transportation of goods by rail, could make pharmaceutical products more expensive.

The Union Budget 2010–11, which has been largely hailed as a good budget across the industry, unfortunately does not propose much in terms of major fiscal and policy measures for the pharmaceutical industry.

Conclusion:

Be that as it may, going beyond the budgetary expectations, the pharmaceutical industry in India should keep focusing on good corporate governance. This encompasses adherence to high ethical standards in clinical trials and in promotion of medicines, regulatory and legal compliance, being harsh on corrupt practices, addressing all issues that support good healthcare policies of the Government and takes care of the healthcare needs of the common man through inclusive business growth.

It is obvious that the Pharmaceutical Industry alone will have a limited role to play to address all the healthcare issues of the country. Important stakeholders like the Government, Corporates and the civil society in general must contribute according to their respective abilities, obligations and enlightened societal interests, towards this direction.

By Tapan 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.

India urgently needs a total overhaul and reform of its public healthcare system with a holistic approach – NRHM and RSBY are laudable initiatives.

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Over a period of time India had made significant improvement in various critical health indicators despite frugal public health spending by the government, which is just around 1 percent of GDP of the country. Such a low government spend towards public health takes India to the bottom 20 percent of countries of the world, in this respect.Overall progress of the country’s public healthcare system is, consequently, commensurate to the nation’s spending towards this vital sector. Only 35 percent of country’s population has now access to affordable modern medicines. Even many ASEAN countries are far ahead of India in their achievements towards public healthcare services. Such a grim scenario prompts us to understand the infrastructural and financial dimensions of the public healthcare system of the country to enable us to suggest appropriate reform measures for this sector to the policy makers.Very recently, the Prime Minister of the country Dr. Manmohan Singh indicated the intent of his government to raise the government spending towards public health to around 3 percent of the GDP. Health being a state subject in India, both the State and Central Governments will need to take their best foot forward towards this direction.

Fund Allocation towards public healthcare:

In the Eleventh Five Year Plan, the fund allocated by the government towards public healthcare shows a significant increase. The launch of ‘National Rural Health Mission (NRHM)’, which emphasizes community based monitoring along with decentralized planning and implementation augers well for the nation and vindicate, at least, the resolve of the government towards this direction.

Impediments to make NRHM a great success:

There are some serious infrastructural requirements to scale-up NRHM and make it successful. These are as follows:

1. More number of specialists, doctors, nurses and paramedics

2. More medical colleges and nursing schools

3. Less developed states should be financially and technologically helped to create public healthcare infrastructure

4. The student teacher ratio to be enhanced in specialties and super specialties from the current level of 1:1 to 2:1

5. Capacity building at the Medical colleges of the State Governments needs to be considered without further delay

6. The number of post-graduate medical seats needs to be increased, all over the country.

It is envisaged that all these critical steps, if taken with missionary zeal, will help increasing the number of post-graduate specialists from the existing level of 13000 to 18000, in the next five years.

Healthcare delivery:

Even if all these are achieved public healthcare delivery will still remain a key issue to achieve the country’s objective to provide affordable healthcare to all. The poor and marginalized people of our society must be covered adequately by the public healthcare system to the best extent possible.

Improving access:

To improve access to public healthcare services for the common man, India very badly needs structural reform of its public healthcare system, with a clear focus on preventive healthcare. This will in turn help the country reduce the burden of disease.

Healthcare financing:

In 2001 The Journal of Health Management in a study using National Health Accounts (NHA) as a tool of analysis reported:

“76 per cent of health sector revenues come from private sources, of which almost 50 per cent go to private providers and 21 per cent are spent on drugs. Further, 7 per cent of household out-of-pocket expenditure is used as non-drug expenditure for using government facilities for out-patient and in-patient treatment. This has important policy implications for the government.”

Along with increasing healthcare needs across all sections of the society, especially in the low income and the backward states, a very high percentage of out-of-pocket household expenditure towards healthcare, low public budgetary allocations and sluggish health outcomes, are calling for a robust healthcare financing model for the country.

Why is healthcare financing so important in a developing country like, India?

The largest number of poor population of the world resides in India. It has been reported that around three-fourth of over one billion population of the country earns less than two dollars a day. Coupled with poor hygienic condition this section of population is more prone to various illnesses, especially tropical diseases. India is one of those very few emerging economic super powers where around 90 percent of its population is not covered by any form of health care financing.

Under such circumstances, it has been widely reported that the poor very often will need to borrow money at a very high rate of interest or sell whatever small assets they own, further eroding their capability to come above the poverty line, in the longer term.

Thus to provide adequate health insurance cover to the marginalized section of the society including a large number of the rural population, the country is in a dire need to develop a workable and tailor-made healthcare financing model instead of pushing hard the existing ones. This tailor-made model should also include the domiciliary treatment, besides costs of hospitalization.

New healthcare reform process in India should include the healthcare system in its entirety with a holistic approach, starting from access to healthcare to its management and delivery, strengthened by a robust micro-healthcare financing system.

Rashtriya Swasthya Bima Yojna (RSBY): A good initiative by the government:

To partly address the above issue, on October 1, 2007 the Government of India announced a health insurance scheme for the Below Poverty Line (BPL) families in the unorganized sector called Rashtriya Swasthaya Bima Yojna (RSBY).

In RSBY, BPL families are entitled to more than 700 in-patient medical procedures with a cost of up to 30,000 rupees per annum for a nominal registration fee of 30 rupees. Pre-existing medical conditions are covered and there is no age limit. Coverage extends to the head of household, spouse and up to three dependents.

RSBY appears to benefit those people who need it the most. However, how effective will be the implementation of this scheme, still remains a key question. If implemented exactly the way the scheme was conceived, it has the potential to address the healthcare financing issue of around 28 percent of the population currently living below poverty line.

The initial response of RSBY has been reported to be good, with more than 46 lakh BPL families in eighteen States and Union Territories having been issued biometric smart cards, so far.

Conclusion:

To provide affordable healthcare services to all, India urgently needs a total overhaul and reform of its public healthcare system with a holistic approach. The steps so far taken by the government with the launch of NRHM and RSBY are laudable, but are these enough?

By Tapan Ray

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

Will mandatory disclosure of ‘payments to physicians’ by the pharmaceutical companies be an overall part of “Healthcare reform process” in the US and what about India?

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The brief Scenario in India:
In India over 20, 000 pharmaceutical companies of varying size and scale of operations are currently operating. It is alleged that lack of regulatory scrutiny is prompting many of these companies to adapt to ‘free-for-all’ types of aggressive sales promotion and cut-throat marketing warfare involving significant ‘wasteful’ expenditures. Such practices involve almost all types of their customer groups, excepting perhaps the ultimate consumer, the patients.

Unfortunately in India there is no single regulatory agency, which is accountable to take care of the healthcare needs of the patients and their well being.

The pharmaceutical industry of India, in general, has expressed the need to self-regulate itself effectively, in the absence of any regulatory compulsion. However, many activists groups and NGOs feel that the bottom-line in this scenario is the demonstrable transparency by the pharmaceutical companies in their dealings with various customer groups, especially the physicians.

The brief scenario in the US:

Like in India, a public debate has started since quite some time in the US, as well, on allegedly huge sum of money being paid by the pharmaceutical companies to the physicians on various items including free drug samples, professional advice, speaking in seminars, reimbursement of their traveling and entertainment expenses etc. All these, many believe, are done to adversely influence their rational prescription decisions for the patients.

As the financial relationship between the pharmaceutical companies and the physicians are getting increasingly dragged into a raging public debate, it appears that there is a good possibility of making disclosure of all such payments made to the physicians by the pharmaceutical companies mandatory by the Obama administration, as a part of the new US healthcare reform process.

As I said in my earlier article, Eli Lilly, the first pharmaceutical company to announce such disclosure voluntarily around September 2008 has already uploaded its physician payment details on its website.

US pharma major Merck has also followed suit and so are Pfizer and GSK. However, the effective date of their first disclosure details is not yet known.

In the meantime, Cleveland Clinic and the medical school of the University of Pennsylvania, US are in the process of disclosing details of payments made by the Pharmaceutical companies to their research personnel and the physicians. Similarly in the U.K the Royal College of Physicians has been recently reported to have called for a ban on gifts to the physicians and support to medical training, by the pharmaceutical companies.

Conclusion:

Currently in the US, both in Senate and the House of Congress two draft bills on ‘The Physician Payment Sunshine Act’ are pending. It appears quite likely that Obama Administration, with the help of this new law, will make the disclosure of payments to physicians by the pharmaceutical companies mandatory, along with its much discussed new healthcare reform process.

If President Obama’s administration takes such regulatory steps will Dr. Manmohan Singh government prefer to stay much behind?

I shall try to explore that emerging scenario in my next blog post.

By Tapan 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.