A Tipping Point For Robust Healthcare System In India

Posted on November 20, 2017 by Tapan Ray

“Given the popular uptake of universal health coverage reforms elsewhere in Asia, the Feb 4 elections may be a tipping point for health in India. For example, in 2012, Joko Widodo was elected Governor of Jakarta. He launched popular UHC reforms in the capital and 2 years later was elected president. In 2016, voters in the USA and UK supported politicians prepared to act on the concerns of the electorate. If health becomes a populist cause in India, rather than a political inconvenience, then the country might finally be liberated to achieve health outcomes commensurate with its economic and technical achievements”, is exactly what appeared in the editorial of The Lancet, titled “Health in India, 2017,” published on January 14, 2017.

The Lancet Editor further reiterated: “Because states have responsibility for health, the elections will raise the importance of access to quality, affordable health care in India, regardless of the electoral outcome. It is a debate that needs to be fostered.”

This is, of course, a ‘top-down’ approach for healthcare, as seen in several countries across the world. However, I have recently deliberated another approach in the same area on – why a ‘bottom-up’ demand is not forthcoming in India, in an article titled ‘Healthcare in India And Hierarchy of Needs’, published in this blog on November 06, 2017.

No one, including any Government, would possibly ever argue – why shouldn’t a robust public healthcare system in a country, including the availability of reasonably affordable drugs, assume as much priority as economic growth and education?

On the contrary, Governments in several other countries, including those with a well-functioning Universal Healthcare (UHC) in place, are trying to ensure even better and greater access to healthcare for all, by various different means. In this article, I shall focus on it, in a holistic way.

Exploring a bottom-up approach:

It is increasingly becoming more evident that a bottom-up approach would help yield greater success in this area, with a win-win outcome. It will involve taking the stakeholders on board in the process of framing and implementing healthcare projects within a given time-frame. The question then arises, why is it still not happening on the ground in India the way it should? Just floating a discussion paper on draft projects and policies, for stakeholders’ inputs, isn’t enough any longer. There is a need to move much beyond that in making these decisions more inclusive.

Various successive Governments may have some justifiable funding related or other pressing issues to offer a robust public healthcare system in India. But, none of these will be an insurmountable barrier, if more number of heads of astute stakeholders are involved in ferreting out an effective and implementable India-specific solution in this area, within a pre-determined timeline.

There are examples of remarkable progress in this direction, by involving stakeholders in charting out a workable pathway, agreed by all, and jointly implemented in a well-calibrated and time bound manner. Equally important is to make this plan known to the public, so that the Government can be held accountable, if it falls short of this promise, or even misses any prescribed timeline.

‘The Accelerated Access Pathway’ initiative:

Let me now draw an interesting example of involving stakeholders by the Government to improve patient access to expensive and innovative drugs. This example comes from a country that is running one of the oldest and most efficient UHC in the world – the United Kingdom.

Despite a robust UHC being in place, the National Health Service (NHS) in England had a perennial problem to make ‘breakthrough’ medicines available early to NHS patients. The British pharma industry reportedly had a long-held complaint that patients in England get a raw deal when it comes to accessing the latest medicines.

According to a reported study by the Association of the British Pharmaceutical Industry (ABPI) and endorsed by the charity Cancer Research UK, average British patients get lower access to leading cancer medicines than their European counterparts.

To resolve this issue effectively, the British Government launched ‘The Accelerated Access Pathway initiative’. Former GSK global CEO Sir Andrew Witty was named as the chairman of this collaborative body. The scheme, launching from April 2018, will see approvals of cutting-edge treatments for conditions like cancer, dementia and diabetes dramatically speeding up. The pathway is expected to get ‘breakthrough’ medicines to NHS patients up to four years earlier, as the report, published in ‘The Telegraph’ on November 3, 2017 indicates.

It is believed that ‘Accelerated Access Collaborative’ initiative would benefit the NHS patients, as well as deliver significant long-term savings for the health service.

Similar initiatives may be effective in India:

Taking collaborative initiatives, such as above, may not be absolutely new in India. However, in a real sense, Indian initiatives are no more than top-down approaches, and not in any way be termed as bottom-up. Moreover, these usually originate in the form of Government discussion papers inviting comments from the stakeholders.

Moreover, in the healthcare policy related arena, there is no subsequent firm resolve by the Government to chart out a clear pathway for its effective implementation, with specific timelines indicated for each step, besides assigning individual accountability for delivering the intended deliverables.

Any such decisive move by the government, keeping all stakeholders engaged is quite rare to come across in our country, as yet. Thus, carefully selected outside expert group suggestions based – the National Health Policies also have met with the same fate, without possibly any exception, thus far.

Two illustrations:

I shall illustrate the above point with two top-of-mind examples. The first one is a report – the ‘High Level Expert Group (HLEG)’ report on ‘Universal Health Coverage (UHC)’ for India, submitted to the erstwhile Planning Commission in November 2011. The other example is of a policy – the National Health Policy (NHP) 2017, which is in place now, based on a report by an expert committee constituted by the Government.

Let me now briefly recapitulate both – one by one, as follows:

The report on ‘Universal Health Coverage (UHC)’ for India

The ‘High Level Expert Group (HLEG)’ on ‘Universal Health Coverage (UHC)’ was constituted by the Planning Commission of India in October 2010, with the mandate of developing a framework for providing easily accessible and affordable health care to all Indians.

While financial protection for healthcare was the principal objective of this initiative, it was recognized that the delivery of UHC also requires the availability of adequate health infrastructure, skilled health workforce, access to affordable drugs and technologies to ensure the entitled level and quality of healthcare is delivered to every citizen.

The report further highlighted, the design and delivery of health programs and services call for efficient management systems as well as active engagement of empowered communities.

The original terms of reference directed the HLEG to address all of these needs of UHC. Since the social determinants of health have a profound influence not only on the health of populations, but also on the ability of individuals to access healthcare, the HLEG decided to include a clear reference to them.

Nevertheless, this report was never acted upon for its effective implementation. Now, with the change in Government, HLEG recommendations for UHC in India seems to have lost its relevance, altogether.

The National Health Policy (NHP) 2017

The new Government that subsequently came to power, decided to start afresh with a brand new and modern National Health Policy in India, replacing the previous one framed 15 years ago in 2002. NHP 2017 promises healthcare in an ‘assured manner’ to all, by addressing the challenges in the changing socioeconomic, epidemiological and technological scenarios. Accordingly, the National Health Policy 2017 was put in place, early this year.

To achieve the objectives, NHP 2017 intends to raise public healthcare expenditure to 2.5 percent of GDP from the current 1.4 percent. Interestingly, no visible signal about the seriousness on implementation of this laudable initiative has reached the public, just yet.

Let’s now wait for the next year’s budget to ascertain whether the policy objective of ‘healthcare in an assured manner to all’ would continue to remain a pipe dream, as happened in earlier budget proposals. It is noteworthy that union budget allocation on health did not go up, at least, in the last 3 years, despite categorical assurances by the ministers on increasing focus on healthcare.

Significant increase in both the union and the state governments budgetary allocation for healthcare is necessary. This is because, besides many other intents, NHP 2017 intends to provide free diagnostics, free drugs and free emergency and essential healthcare services in all public hospitals for healthcare access and financial protection to all.

Universal Healthcare is the core point in both:

The core focus of both – the HLEG report and also the NHP 2017, is UHC in India, but with different approaches. When HLEG report was not translated into reality, the 2014 general election in India was widely expected to be the tipping point for a new public healthcare landscape in the country fulfilling this promise. More so, as the public healthcare system is generally in a shamble throughout the country, except in a handful of states.

Just as in the United States, Europe or Japan, “if health becomes a populist cause in India, rather than a political inconvenience, then the country might finally be liberated to achieve health outcomes commensurate with its economic and technical achievements,” as the above Lancet editorial commented. Giving yet another perspective, I also wrote in my blog post, titled ‘Healthcare in India And Hierarchy of Needs’ on November 06, 2017, why has it not happened in India, as on date.

Conclusion:

What happens, if the Indian Government too adopts a major collaborative approach, such as ‘The Accelerated Access Pathway’ initiatives, involving all stakeholders – including the pharma and device industry leaders to implement UHC in the country – part by part?

The relevant counter question to this should not be – Will that work? Of course, it will, if the Government wants to. On the contrary, it could be a potential ‘Tipping Point’ to create a robust public healthcare landscape in India. Thus, the real question that we should ask ourselves: Why won’t it work, when all stakeholders are on board to pave the pathway for an efficient Universal Healthcare system in India, in a win-win way?

By: Tapan J. Ray

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

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

Posted on November 9, 2015 by Tapan Ray

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

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

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

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

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

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

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

Would abolition of DPCO be foolhardy?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A recent survey:

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

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

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

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

Does India want to jump into this quagmire?

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

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

The unfinished agenda:

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

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

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

Increasing public financing from the current 1.2 percent of the Gross Domestic Product (GDP) to at least 2.5 percent.

Outlined an essential health care package for provision through tax funding, supplemented by employer-provided insurance

Free provision of essential drugs and diagnostics.

Emphasized prioritized funding for primary health care, with efficient links to secondary and tertiary care.

Services were to be delivered jointly by strengthened public facilities and contracted private providers.

Reforms were suggested for improving the health care workforce, strengthening of regulatory systems for quality assurance, and improving governance and accountability.

Change in Government puts UHC back to square one?

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

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

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

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

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

Current impediment to UHC:

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

Possible alternative:

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

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

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

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

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

Conclusion:

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

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

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

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

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

By: Tapan J. Ray

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

India’s ‘National Health Policy 2015′ Needs Wings To Fly

Posted on January 12, 2015 by Tapan Ray

Ensuring ‘access to healthcare for all’ has remained a key well-articulated good intent of all the successive Governments in India, cutting across the political regimes, since 1983.

The Union Ministry of Health & Family Welfare published the first “National Health Policy (NHP)”, in 1983, which was endorsed by the Indian Parliament in the same year. The policy categorically enunciated the following:

“India is committed to attaining the goal of ‘Health for All by the Year 2000 A.D.’ through the universal provision of comprehensive primary healthcare services”.

For the first time after independence, this document captured the key directions and dimension of the national health policy such as, the creation of infrastructure for primary healthcare; close co-ordination with health-related services and activities (like nutrition, drinking water supply and sanitation); active involvement and participation of voluntary organizations; provision of essential drugs and vaccines; qualitative improvement in health and family planning services; provision of adequate training; and medical research aimed at the common health problems of the people. However, it did not elaborate much about the Universal Health Care (UHC).

Abysmal public expenditure to meet the key goal of NHP 1983:

The NHP 1983, which was revised in 2002, recommended an increase in public health expenditure to 2.0 percent of GDP in 2010.

The 12^th Fiver Year Plan of the Government of India again acknowledged that the health sector expenditure by the central and state governments, both plan and non-plan will have to be substantially increased during the plan period. It also stated that the health expenditure was increased from 0.94 per cent of GDP in the 10th Plan to 1.04 per cent in 11th Plan and it should be increased to 2.5 per cent of GDP by the end of 12th Five Year Plan period.

That said, the bottom-line is, the current public spending on health is stagnating around 0.9 percent of the GDP. Leave aside implementation of the 1983 NHP goal of providing “Health for all by the year 2000 A.D”, even in 2015, India continues to grapple with the challenges for ensuring availability, accessibility, affordability and quality of comprehensive healthcare to all, though various governments have come and gone during this period. India’s rank in the Human Development Index (HDI) also remains at pitiful 136 out of 187 countries and despite improvements, India is likely to miss some key MDG targets in 2015.

Pockets of improvements – mostly grossly inadequate:

In the midst of gloom and doom in the health space of India, the 57 page draft NHP 2015 captures some of commendable improvements, as well, and very rightly so, which I am not going to repeat in this article.

A June 2013 report of IMS Institute also acknowledges that the extent of change and improvement in India’s healthcare system over the past decade is remarkable. The Government of India’s initiatives, as well as private sector actions and public-private-partnership programs, have contributed to this progress. Yet a lot more remains to be done.

The report highlights the following areas, which are worth taking note of:

The physical accessibility of public or private healthcare facilities is a challenge in rural areas. By contrast, in urban areas, accessibility is less of a challenge due to more facilities being available.

An increasing proportion of the population is using private healthcare  facilities for both in-patient and out-patient treatments. Long waiting times and absence of diagnostic facilities are among the main reasons private healthcare facilities are chosen over public centers for in-patient treatment. For out-patient treatment, the availability or doctors and quality of care are cited as reasons for selecting a private healthcare facility. However, patients would readily switch to public healthcare centers if these issues were addressed, the research report states.

The cost of treatment at a public healthcare facility is much more affordable than at a private center. However, due to lack of physical reach, availability of quality treatment and other practices, patients are forced to use more expensive private facilities, thus exacerbating affordability challenges. The majority of Out of Pocket (OoP) expenses are due to medicines.

Overall, while there are pockets of improvements, significant healthcare access challenges continue to exist for the Indian population, especially in rural areas.

OoP expenses on health is one of the highest in India:

Out of Pocket (OoP) expenditure on health is one of the highest in India at 61.7 percent, as acknowledges by the draft NHP 2015, as well. This is against 35.3 of China, 30.6 of Brazil, 44.6 of Sri Lanka, 61.3 of Bangladesh, 14 of Thailand, 8.9 of United Kingdom and 11.8 of the United States. The reason being, due to lack of access to cheaper and quality public health facilities, a vast majority of the Indian population is forced to turn to expensive private healthcare providers, as confirmed by the IMS Institute in its above report..

Suggested framework for a comprehensive view of healthcare access:

The same June 2013 report of IMS Institute states that healthcare access has varying meaning in different countries, especially across developing and developed economies. In the developed economies, it is often equated to the access status of healthcare insurance, whereas in the developing economies, it is viewed primarily across two dimensions: the physical reach of a healthcare facility, and affordability to the patient.

Thus, it is important to build a framework that would provide a comprehensive view to healthcare access. The framework should be able to define healthcare access in the Indian context, aided by other parameters that are key in ensuring quality treatment to a patient.

The framework also allows understanding of each component of healthcare access separately, including inter-dependencies.

According to IMS Institute, healthcare access has 4 key dimensions as follows:

Physical Reach:

This component defines physical accessibility of a requisite healthcare facility, i.e. availability of a healthcare facility having an out-patient department (OPD) for common ailments, and an in-patient department (IPD) for hospitalization. These facilities may either be public or private in nature. Physical reach is defined as the ability to enter a healthcare facility within 5 kilometers (5km) from the place of residence or work.

Availability/Capacity:

This component defines availability of the requisite healthcare resources to provide patient treatment, i.e. doctors, nurses, in-patient beds, diagnostics, consumables, etc. The availability is governed by minimum specifications defined by the Government of India for public healthcare facilities, and international organizations such as W.H.O.

Quality/Functionality:

This component defines the quality of the healthcare resources available at the point of patient treatment.

Affordability:

This component defines the ability of a patient to afford complete treatment for the illness or disease.

Draft NHP 2015 – ‘Health is a fundamental right’:

Though the above parameters were not quite considered, as such, to define access to healthcare, the new government has done a good job with the draft NHP 2015, while updating NHP 2002. The new draft has evoked good interest among the stakeholders as healthcare has become very costly in India and continues to go north, steadily, as mentioned above.

The draft has covered lots of ground related to health, spanning across the change in the nature of the nation’s disease burden from communicable to non-communicable diseases, shortage of human resources in health sector and right up to the use of information and communication technology. It’s a hard fact that low investment in public health has been placing India consistently at the lower rungs of the development indices.

Against the backdrop of paltry public expenditure on health, the Union Ministry of Health and Family Welfare through its draft National Health Policy, 2015 (NHP 2015) has proposed making health a fundamental right, similar to denial of health an offence.

The draft policy reiterates, “Many industrialized nations have laws that do so. Many of the developing nations that have made significant progress towards universal health coverage, such as Brazil and Thailand, have done so, and … such a law is a major contributory factor. A number of international covenants to which we [India] are joint signatories give us such a mandate – and this could be used to make a national law. Courts have also rulings that, in effect, see health care as a fundamental right — and a constitutional obligation flowing out of the right to life.”

The draft NHP 2015 even states, “The Centre shall enact, after due discussion and on the request of three or more states a National Health Rights Act, which will ensure health as a fundamental right, whose denial will be justiciable.”

The new draft policy acknowledges that primary healthcare of date covers not more than 20 per cent of the health needs and that a very high OoP health expenditure (over 61 percent on medicines) is pushing nearly 63 million people into poverty every year.

One of the key features of the new draft policy is an universal medical insurance scheme that will be virtually free for the poor and affordable for the rest. The government expects the stakeholders to send their comments and suggestions on the draft policy by February 28, 2014.

However, the draft NHP 2015 does not deliberate on some other important areas, such as specific time-bound commitments on public investments, insurance cover on outpatient treatments & care and appropriate regulations for the private sector to contain healthcare costs.

Cut on current year health budget raises may eyebrows:

In the midst of the prevailing lackluster public healthcare scenario, just in the last month (December 2014), the government has reportedly ordered a US$ 948 million (20 percent) cut in its 2014-15 healthcare budget due to fiscal constraints.

It is worth mentioning that at 0.9 percent of GDP, India’s public health expenditure is already among the lowest in the world, as compared to compared to 2.7 percent in China, 4.2 percent in brazil, 1.4 percent in Bangladesh, 1.6 percent in Sri Lanka, 2.9 percent in Thailand and 8.5 percent in the United States.

In addition to the healthcare budget, the finance ministry has reportedly also ordered a spending cut this year for India’s HIV/AIDS program by about 30 percent to US$ 205.4 million.

A report from Reuters, quoting one of the health ministry officials, stated that this budget cut could crimp efforts to control the spread of diseases. More newborns die in India than in poorer neighbors such as Bangladesh, and preventable illnesses such as diarrhea kill more than a million children every year.

Needs wings to fly:

The draft NHP 2015 has come thirteen years after the previous NHP 2002 and following a 20 percent cut even on the paltry budgetary allocation on public health of this financial year. Thus, many skeptics ponder whether this well drafted NHP 2015, pregnant with many great promises, would ever see the light of the day.

The skepticism gets further reinforced, when the draft NHP 2015 says that to achieve its objectives the budgetary allocation on health would be increased to 2.5 percent of the GDP. The Government proposes to rely mostly on general taxation, besides creating a health cess similar to that of education cess, for effective implementation of this health policy. The draft indicates that 40 percent of this budget would come from central expenditure.

A quick reading of the following text from the Reuter’s report makes the scenario even more intriguing:

“The retrenchment (budget cut) could also derail an ambitious universal healthcare program that Modi wants to launch in April. The plan aims to provide all citizens with free drugs and diagnostic treatments, as well as insurance benefits.

The cost of that program over the next four years had been estimated at 1.6 trillion rupees (US$ 25 billion). The health ministry officials had been expecting a jump in their budget for the coming year, in part to pay for this extra cost.

‘Even next year we don’t think we’ll get a huge amount of money,’ said one official, adding that it was now unclear how the new program would be funded.”

Thus, the key point to ponder now: Would the NHP 2015 have wings to fly?

Is India just producing various documents on health without action?

Not too long ago, in October 2010, the Government of India constituted a ‘High Level Expert Group (HLEG)’ on Universal Health Coverage (UHC) under the chairmanship of the well-known international medical expert Prof. K. Srinath Reddy. The HLEG was mandated to develop a framework for providing easily accessible and affordable health care to all Indians.

The HLEG Report defined UHC as follows:

“Ensuring equitable access for all Indian citizens, resident in any part of the country, regardless of income level, social status, gender, caste or religion, to affordable, accountable, appropriate health services of assured quality (promotive, preventive, curative and rehabilitative) as well as public health services addressing the wider determinants of health delivered to individuals and populations, with the government being the guarantor and enabler, although not necessarily the only provider, of health and related services”.

I discussed this subject in my blog post of December 12, 2011, titled “Health being a basic human right, the proposal for Universal Health Coverage augurs well for India”

Most probably, this excellent HLEG report on UHC has already become an archival material for the posterity to refer, if and when required.

Interestingly, despite governments of different political dispensation ruling the country since 1983, the key goal of the NHP 1983 to ‘provide healthcare to all by the year 2000’ continues to haunt us over the last three decades.

Public healthcare infrastructure, especially in rural India, still remains grossly inadequate.

In most of the villages in India, primary health facilities, if available, (except in some progressive states), continue to be shoddy, fragile and is gasping for breath, as it were. Recent examples of Bilaspur (Chhattisgarh) sterilization tragedy in November 2014, when 15 women died or the incident of last week in Chatra district of Jharkhand, where about 40 women allegedly underwent sterilization under torchlight, would vindicate this point.

Much hyped program of “free essential drugs for all, from the government hospitals” has not been universally implemented, just yet…again due to financial resource constraints and paucity of other wherewithal.

Conclusion:

Currently, none of the newer constitutional rights, such as right to food, education and employment, enacted by the lawmakers for the well being of the concerned people of the country, is functioning as desired for various financial and administrative reasons. Even making adequate budgetary provisions for all these projects continue to pose a great challenge, both for the central and the state Governments.

Overall, NHP 2015 is a well-drafted and comprehensive policy document. It analyses the successes and failures of the past quite well, with a proposal of making health as a fundamental right. However, the status and experience with the other fundamental right-based legislations in India, do not fuel much optimism in this critical area, at least, as of now.

Consequently, the draft NHP 2015 does not appear to be more than a lucid narration of good intents, just what the NHP 1983 and 2002 did. Next month’s Union budget allocation for the financial year 2015-16 for health, calculated as a percentage of India’s GDP, would hopefully bring more clarity in this area.

Additionally, other important areas such as, specific time-bound commitments on public investments for health; extensions of medical insurance cover to even outpatient treatments & care and appropriate regulations for the private sector to contain healthcare expenditure, are worth considering in the NHP 2015.

Shorn of all these, would the National Health Policy 2015 have its wings to fly?

By: Tapan J. Ray

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

Posted on June 2, 2014 by Tapan Ray

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

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

A commendable beginning:

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

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

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

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

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

The cost and span:

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

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

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

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

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

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

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

The groundwork started with ‘The HLEG Report‘ :

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

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

UHC guarantees access to essential free health services for all:

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

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

UHC provides options to patients:

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

What exactly is the new Health Minister mulling?

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

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

Single Payer: The government provides insurance to all citizens.

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

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

The Global scenario:

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

India is already too late in providing UHC:

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

Country	Start Date of Universal Health Care	System Type

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

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

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

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

Another school of thought:

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

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

Use public health facilities: Available virtually at free of cost if accessible, but quality is mostly questionable.

Use private health facilities: Virtually unregulated, much better services, though available mostly at high to very high cost.

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

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

Conclusion:

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

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

Does it matter really? Well…

By: Tapan J. Ray

Why Try To Reinvent The Wheel With So Much Of Hullabaloo?

Posted on March 19, 2014 by Tapan Ray

A recent IMS study, apparently ‘authorized’ (whatever it means) by the Planning Commission of India has reportedly suggested various ‘ways to make drugs affordable in India’.

Though there does not appear to be anything new in the reported suggestions, the well publicized report could manage to snatch an eye-catching media headline: “Patented Drugs Cheaper, but Less Affordable Here”, for whatever may be the reason.

I wish I had an access to the full report for further enlightenment in this area.

Was this ‘authorized’ study necessary at all in the first place?

If the study were related to improving access to medicines in India, several questions would naturally come up, as follows:

What does “The study authorized by the Planning Commission” mean? Has the Planning Commission paid from the taxpayers’ money to get this avoidable study done? Or, has the study been done free of cost, as a favor extended to the Planning Commission of India on the issue, in lieu of authorization of the commission for quoting its name in the report?

Following the due process, it would not difficult to unravel whether the Government has made any payment for the study or not.

However, assuming that this study was done free of cost, it will be interesting to know what prompted the Planning Commission to even consider to reinvent the wheel with this new IMS study.

The reason being, the comprehensive report on the ‘Universal Health Care (UHC)’ dated November 2011 prepared by the ‘High Level Expert Group (HLEG), chaired by the Chief of the ‘Public Health Foundation of India (PHFI), Dr. Professor K. Srinath Reddy, is already pending before the Commission for giving shape to it working with all the concerned ministries. It is worth mentioning that the Planning Commission of India also had commissioned the HLEG study.

Instead of taking the UHC initiative forward, along with, hopefully, an expedited action of the Department of Pharmaceuticals to put in place a robust mechanism for patented drugs pricing, wasting time by moving in circles on the part of the Planning Commission in search of probably yet another ‘Eureka’ type report, would cost a great deal to the healthcare system of India. On the contrary, from the news report it appears that the findings or suggestions made in the IMS report are rather mundane, far from being anywhere near ‘Eureka’ type by any imaginable yardstick.

HLEG already charted the pathway for UHC in India:

The HLEG report has defined the UHC as follows:

Ten principles for UHC in India:

Following are the ‘Ten Principles’, which guided the HLEG to formulate its recommendations for the UHC in India:

Universality
Equity
Non-exclusion and non-discrimination
Comprehensive care that is rational and of good quality
Financial protection
Protection of patients’ rights that guarantee appropriateness of care, patient choice, portability and continuity of care
Consolidated and strengthened public health provisioning
Accountability and transparency
Community participation
Putting health in people’s hands

HLEG study guarantees access to essential free health services for all:

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

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

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

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

Another Planning Commission commissioned report on procurement and distribution of medicines:

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

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

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

As per this report, the total running cost of procurement and distribution for the ‘Free Medicines for All’ project during the 12th plan period would be Rs. 28,675 Crore and an additional allocation of Rs. 1,293 Crore will be required as one time capital costs. The contribution of the Central Government at 85 percent of the total cost would be around Rs 25,667 Crore for the entire Plan period.

Conclusion:

In July 2012, while talking on the above K Srinath Reddy Committee report on UHC, which suggests universal health insurance coverage, the Deputy Chairman of the Planning Commission, Mr. Montek Singh Ahluwalia had reportedly said that the health sector of India would anyway receive a major shot in the arm in the 12th five-year plan with a budgetary allocation of 2 percent of GDP during the plan period. He also articulated that the country’s focus would be on cost-effective treatment and healthcare. For this, there would be a huge demand for human resources in the medical sector.

In the above backdrop, when two such excellent recent reports, commissioned earlier by the Planning Commission itself on improving access to affordable healthcare in India, are still pending before it for initiation of meaningful action with public knowledge, it is difficult to fathom what prompted the necessity for yet another Planning Commission ‘authorized’ study on similar area, with no seemingly earthshaking findings, as detailed in the media report.

This brings me back to where I started from, why is this particular attempt by the Planning commission to ‘Reinvent The Wheel’, yet again, and that too with so much of a hullabaloo, instead of diligently acting on the well crafted pending ones?

By: Tapan J. Ray

For Affordable Healthcare: Synergize Resources Through PPP Models

Posted on February 24, 2014 by Tapan Ray

According to a 2012 study of IMS Consulting, the key factor of significantly high ‘Out of Pocket (OOP)’ expenditure on healthcare in India is that people are pushed into seeking costlier private care services due to imbalanced infrastructure of healthcare workers, medicines and facilities.

Currently, 74 percent of patients in ‘Out-Patient (OP)’ care and 65 percent in ‘in-Patient (IP)’ care seek healthcare in the private channels. In private inpatient care, the average cost of treatment exceeds the average monthly household income at 121 percent for the affording population and 217 percent for the poor population, forcing many families to borrow money or sell assets.

Thus, the affordability challenges for healthcare of the country, as manifested by high OOP spend, is mostly a consequence of a large patient population using the private healthcare channel due to still inadequate availability of public healthcare services.

The situation is looking up:

According to IMS study 2012, currently, on an average about 54 percent of the patients are receiving free medicines from the Government hospitals. In progressive states like, Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka this number goes up to 85 percent. At the same time, in rural India, which constitutes around 70 percent of the total 1.2 billion populations of India, usage of Government facilities for OP care has increased from 22 percent in 2004 to 29 percent in 2012, mainly due to the impact of National Rural Health Mission (NRHM).

Consequently, this increase will also have significant impact in reducing OOP healthcare expenses of the rural poor.

Medicines constitute highest component of OOP:

Medicines still constitute the highest component of OOP expenses in OP care, though its percentage share has decreased from 71 percent in 2004 to 63 percent in 2012. Similarly for IP care, the share of medicines in total OOP has also decreased from 46 percent in 2004 to 43 percent in 2012.

However, still 46 percent of the patients seeking healthcare in public channels had to purchase medicines from private channels. Recently announced drug procurement system through Central Medical Services Society (CMSS) after hard price negotiation and distribution of those drugs free of cost from Government hospitals and health centers, could address this issue effectively.

Further scope to reduce OOP:

The study highlights that OOP spend could be lowered by 22 percent with:

Improved availability of healthcare facilities at public hospitals and health centers, which can be achieved through effective implementation of “National Health Mission” with higher budgetary allocation.

Improved availability of medicine at the public channels, which is feasible through effective implementation of already announced “Free Medicine” scheme of the Government across the country.

A total reduction of ~40% in overall OOP spend appears to be possible, the study reiterates, when more people would get confidence that public healthcare can meet all their needs.

The roadmap to achieve the goal:

Fundamentally there are five ways to deal with the affordability issue:

1. Reduction in demand: Creating a better health environment,

2. Reduction in costs: Through price control, increased competition, group purchasing power

3. Increase in financial support from government

4. Increased penetration of health insurance programs

5. Increase per-capita income of households

All these five areas, I reckon, would not be difficult to address through well-structured and strategic Public Private Partnership (PPP) initiatives.

It is increasingly recognized that there are many other healthcare challenges, which do not fall exclusively under either the public or the private sectors. These challenges need to be addressed with combined efforts… with well structured Public Private Partnership (PPP) models.

Private sector should play its role:

The private sector is already a major provider of health services in India. Hence, it has the wherewithal to support implementation of Government’s flagship healthcare programs, especially in the area of service delivery, to enhance their overall effectiveness.

As the Universal Health Care (UHC) proposal made by the High Level Experts Group (HLEG) to the Planning Commission of India highlighted, the government would provide the budget, while the private sector would take the responsibility for delivery of healthcare services.

Accountability for PPP should not fall through the systemic cracks:

The above study indicates, the private parties could include individual physicians, commercial contractors, large private and corporate super-specialty hospitals, not-for-profit agencies (NGOs), pharmaceuticals and device manufacturers. Expertise of all these stakeholders should be appropriately leveraged.

It is absolutely essential to make sure that the accountability of the PPP initiatives does not fall through the cracks now existing in the system.

To control costs and ensure required standards are met, all contractual agreements for PPPs, as recommended, must have adequate built-in monitoring and supervision mechanisms of the highest order, assigning clear roles and responsibilities for each party.

Similarly, NGOs need to be given a larger role of monitoring the activities or services rendered at such facilities to make sure the designated institutions are fulfilling their obligations to the public.

Conclusion:

To make healthcare affordable in India, well-strategized PPP initiatives would have critical roles to play.

Thus, instead of resorting to blame games with Government accusing the private sector to be exploitative and the private sector continuously moaning for ‘unfriendly’ business policies of the government, there is a fundamental need for both the constituents working closely together.

As a result, patients will have greater access to quality healthcare at an affordable price, the industry will grow faster in a sustainable way and the government will have its public healthcare obligations fulfilled to a reasonable extent.

Some of the major sectors in India where PPP has been quite successful are infrastructure, telecom, irrigation, power and airports. So, why should it not work for the healthcare sector of the country, as well?

By: Tapan J. Ray

In the Wonderland of Pharma Generics: Some Steps In, Some Steps Over the Line

Posted on June 10, 2013 by Tapan Ray

To scale-up access to healthcare, especially for the marginalized population of any country, greater access to affordable generic drugs will always remain fundamental, besides improving healthcare infrastructure and its delivery mechanism.

Thus, there should be a robust mechanism across the world to facilitate quick entry of cheaper generic equivalents immediately after patent expiry of the original molecule. Any attempt to step over the line, blocking entry of generics surreptitiously by vested interests must be brought to justice sooner. Such measures assume increasing importance, as without availability of newer generics, unmet medical needs of the most vulnerable section of the society cannot be met effectively by any country.

Newer generics will play a critical role even in the Indian context. Besides many other diseases, India is already known as the diabetic capital of the world with an estimated population of 70 million diabetics by 2020.

Greater access to treatment for such chronic ailments and many other dreaded diseases with increasing trend of prevalence, like cancer, multiple sclerosis, Alzheimer and autoimmune disorders, besides common tropical diseases, would also depend on the availability of cheaper and newer generic medicines.

Global innovators stepping into generics business in emerging markets:

Sniffing the growth opportunities in the generics business in an environment of patent cliff, even many hard-nosed innovator companies have been entering into this business either through local acquisitions or through various collaborative arrangements. Examples of some of these companies are as follows:

Novartis entered in generic business with its Sandoz arm
Pfizer with collaborative arrangements in India with Aurobindo Pharmaceuticals (India) in March 2009 and with Strides Arcolab in January 2010
Daiichi Sankyo acquired Ranbaxy of India
GlaxoSmithKline acquired 16 percent stake of Aspen Pharmacare of South Africa, Laboratorios Phoenix in in Argentina and signed a development and commercialization license with Dr. Reddy’s Laboratories (DRL)
Sanofi acquired Shantha Biotechnics and Universal Medicare of India, Zentiva in Czech Republic, Laboratorios Kendrick in Mexico, Medley in Brazil and Helvepharm in Switzerland
Abbott Laboratories acquired the pharmaceutical formulations business of Piramal Healthcare and collaborated with Zydus Cadila

A pro-generic initiative in the west:

Ireland’s parliament has recently passed a bill on pro-generic initiatives. Under this new law pharmacists will be permitted to substitute branded medicines, which have been designated by the Irish Medicines Board (IMB) as interchangeable.

Currently in Ireland, if a specific brand of medicine is prescribed for a patient, the pharmacist must supply only that brand.

Some steps over the line blocking entry of generics:

Interestingly, to continue marketing high priced innovative drugs even after patent expiry, attempts are still being made to block entry of cheaper generics through equally innovative means by stepping over the line.

On April 15, 2013 ‘The New York Times’ reported several such cases of the recent past in the United States. The report gives details of the players involved in each of these cases.

Prompted by these unfortunate incidents, the Federal Trade Commission (FTC) of the US investigated into the matter involving the American drug companies and charged many of them with ‘anticompetitive behavior’. These practices are no longer new and are being followed by some companies over a long period of time.

One of the latest and elegant, yet a very simple strategy reportedly works as follows:

Generic drug makers need samples of patented drugs to generate required regulatory data to obtain marketing approval for launch after the molecules go off patent.
Some innovator companies (named in the report) refuse to sell their patented drugs to generic manufacturers for development of generic equivalents.
Traditionally, the generic drug makers purchase their requirements from the concerned wholesalers.
However, because of safety concerns, drugs are now mostly sold with restrictions on who can buy them.
This compels the generic manufacturers to ask the innovator companies for samples of the patented products.
Unfortunately, mostly they get a negative answer.
In defense, innovator companies explain that they are ensuring any possible improper use of their innovative drugs and also say that no law binds any company to do business with another.

It is alleged that the companies, which most aggressively pursue such measures are those with drugs nearing end of their patent life.

The report indicates that the federal regulators in USA do consider this strategy of creative interpretation of drug safety laws, is illegal.

The news item also indicates that most of these drugs are for serious illnesses like various types of cancers, multiple sclerosis and other rare diseases costing US$ 79,000 to US$ 229,000 a year to patients.

More instances:

Another recent report highlights that European Union’s anti-trust regulator will fine two European pharmaceutical Company and seven other drug makers for blocking generic drugs against “pay-for-delay” deals. Ranbaxy’s name also features in this report.

The report also states that brand name companies, especially in the western world, have been defending “pay-for-delay” deals to extend patents and avoid costly litigation.

It reports that in a typical case, a generic rival may challenge the patent of a brand-name competitor, which then pays the rival a sum of money to drop its challenge. Interestingly, defenders of the practice call it a legitimate means to resolve patent litigation.

A recent debate:

Another interesting development has come up with the pain killer drug OxyContin of Purdue Pharma, which went off patent in April 2013.

Just before patent expiry, Purdue Pharma reportedly reformulated and pulled out its previous version of OxyContin, without abuse-deterrent measures, from the market giving reasons related to safety and efficacy of the drug.

In the notice to the Federal Register, US-FDA reportedly said, “Compared to original OxyContin, reformulated OxyContin has an increased ability to resist crushing, breaking, and dissolution using a variety of tools and solvents.” The regulator, consequently, barred the generic companies from making copies of the older versions of OxyContin without tamper-resistant qualities.

This development, will not allow drug manufacturers like Teva and Impax to make and launch generic equivalents of older versions of OxyContin.

This report also says that similar request has been filed with US-FDA by Endo Health Solutions Inc. for safety of its old painkiller drug Opana, which could force the generic version of the drug manufactured by Impax’s going out of the market in favor of high priced medicine.

On this development the Generic Pharmaceutical Industry in America has reportedly commented, “Blocking generic drugs could mean leaving behind the millions of patients who stand to benefit from access to lower-cost versions of OxyContin”. Some experts have also expressed apprehension that such a precedent would likely to encourage many others to work for similar safety related changes to extend patent life of a product.

Having said that, it appears to be a complex regulatory issue where the possibility of drug abuse has to be carefully weighed against the benefits of low cost generic entry for greater access to patients.

‘Disparaging’ generic drugs:

Reuters , quoting the French Competition Authority, recently reported from Paris that a global pharmaceutical major has “created a doubt over the quality and the safety of generics, without any proven basis.”

As a result, the report says, the French Competition Authority has fined the drug maker 40.6 million euros (US$52.7 million) for “disparaging” generic competition.

The news report further indicates that this decision followed a complaint of Teva Sante filed in 2010 against communication practices of the branded molecule discouraging the use of its generic versions by the doctors.

The innovator company may appeal against this decision.

European Commission found similar practices:

It is interesting to note that in 2009, the European Commission also reportedly found similar practices, including ‘pay-for-delay deals’ which not only adversely impacted competition, but also delayed entry of cheaper generic drugs into the EU markets.

That said, entry of generic drugs is still not speedy in all therapy areas. In this context, a study titled, “Drug patent expirations and the speed of generic entry,” concluded that the generic industry mostly target chronic drug markets with high turnover products and entry of a generic drug is also greatly influenced by the existing branded substitutes in the marketplace.

Importance of the Indian generic drugs:

According to BCC Research, the global generic drug market is expected to grow at a CAGR of 15 percent over five years registering a turnover of US$ 169 billion in 2014.

In this market, India is now the world’s biggest provider of low priced high quality generic medicines to the developing world. The experts opine in various context, the world must ensure that this vibrant hub of generic drugs does not get adversely impacted at any cost for any vested interest.

According to Pharmexcil pharma exports from India stood at an impressive US$ 14.6 billion during 2012-13 compared to US$ 13.2 billion in 2011-12. Indian Ministry of Commerce had unfolded a ‘Strategy Plan’ to take it to US$ 25 Bn by 2013-14, which currently appears to be a very ambitious objective.

Taken together, India and China now reportedly manufacture over 80 percent of the Active Pharmaceutical Ingredients (APIs) of all drugs used in the United States.

As reported by BMJ from 2003 to 2008, in various programs supported by donor organizations like the Global Fund, generic drugs from India contributed over 80 percent of the medicines used to treat AIDS, including 91 percent of pediatric antiretroviral products and 89 percent of the adult nucleoside and non-nucleoside reverse transcriptase inhibitor markets.

In addition, India is considered to be an extremely valuable source of high quality affordable generic drugs for the treatment of cancer, cardiovascular conditions, infections and other non-infectious chronic diseases and conditions.

Allegations against Indian generic drugs:

In a situation is like these, some aberrations within the Indian generic space like, what has happened currently with Ranbaxy are, at times, made universal and blown out of proportion, probably on behalf the interested players to paint the domestic pharmaceutical industry, in general, black. There is no doubt, however, all such cases of fraud on patients, wherever these take place must be brought to justice.

The issue arises when such instances are grossly generalized. For example, an American Enterprise Institute report titled, “Cheap Indian generic drugs: Not such good value after all?” quoting US-FDA, highlights that “Pharmaceutical companies in developing countries are increasingly falsifying data about the quality of their medicines.”

It further alleges, Indian producers in particular strive to reduce costs by substituting cheaper ingredients or skimping on good manufacturing practices, and often patients and well-informed pharmacists alike will overlook the flaws.

The article laments, “Indian companies and regulators simply deny there is any difference in product quality between their products and those made in the West.”

Indian perspective to the allegation:

In response to such allegations a very recent FICCI –Heal 2012 publication titled “Universal Healthcare: Dream or Reality?” articulated as follows:

“Selected reporting of malpractices in healthcare has painted a poor picture of the sector. However, the instances of misconduct/corruption are miniscule compared to public perception.”

Some important campaigns in favor of generics:

However, a publication from ‘Global Pharmacy Canada’ says,

“Generic medications are just as safe and effective as their brand-name equivalents. All the drugs supplied by the pharmacies we deal with are government approved. The manufacturers they buy from follow strict World Health Organization (WHO) standards for Good Manufacturing Practices (GMP). One or several of the following agencies have approved these manufacturing facilities:

Food and Drug Administration (FDA), USA
Medicines Control Agency (MCA), UK
Therapeutic Goods Administration (TGA), Australia
Medicines Control Council (MCC), South Africa
National Institute of Pharmacy (NIP), Hungary
Pharmaceutical Inspection Convention (PIC), Germany
State Institute for the Control of Drugs, Slovak Republic
Food and Drug Administration (FDA), India”

Similarly USFDA comments on generic drugs as follows:

“Generic drugs are important options that allow greater access to health care for all Americans. They are copies of brand-name drugs and are the same as those brand name drugs in dosage form, safety, strength, and route of administration, quality, performance characteristics and intended use.”

“Health care professionals and consumers can be assured that FDA approved generic drug products have met the same rigid standards as the innovator drug. All generic drugs approved by FDA have the same high quality, strength, purity and stability as brand-name drugs. And, the generic manufacturing, packaging, and testing sites must pass the same quality standards as those of brand name drugs.”

The growth drivers:

According to a recent study, following are the key growth drivers of the global generic pharmaceutical industry:

Governments’ and payers’ need to contain rapidly increasing healthcare expenditures

A growing middle-class in emerging markets

Longer life expectancy

A large number of patent expiries for innovator drugs, many of them are mega blockbusters

All these have contributed to the growth of global generic industry from less than US$ 50 billion in 2004 to over $80 billion by 2011 improving global patient-access to medicines significantly.

The report also says, if a more general definition of off-patent medicines is used to define generics, estimates have placed the size of the industry at closer to $150 billion. In the United States alone, generic sales have more than tripled since 2000 and now exceed $51 billion in 2011.

Encourage speedy entry of generics:

Even the Federal Trade Commission (FTC) in a report titled “Generic Drug Entry Prior to Patent Expiration: An FTC Study,” stated as follows:

“Expenditures on pharmaceutical products continue to grow and often outpace expenditures for other consumer products. Pharmaceutical expenditures concern not only consumers, but government payers, private health plans, and employers as well. Generic drugs offer opportunities for significant cost savings over brand-name drug products.”

In its report FTC recommended that generic drugs should not experience delays when entering the market. The Commission also highlighted that both pharmaceutical innovation and cheaper generic drugs bring enormous benefits to patients.

Conclusion:

It is widely recognized that generic medicines play a key role to improve access to medicines to a very large section of population of the world.

Currently, important policy measures taken by the countries like, United States, United Kingdom, Canada, Holland, Denmark and Germany for increasing use of generic drug have started helping them to achieve this objective. At the same time, such policies are helping them to garner significant savings in their respective healthcare cost.

Out of pocket expenditure towards healthcare being around 80 percent in India, un-interrupted availability of high quality affordable generic medicines will help the patients significantly. This should, no doubt, need to be ably supported by the Government by rolling-out much awaited ‘The Universal Healthcare’ proposal of the High Level Expert Group (HLEG) appointed by the Planning Commission of India, sooner.

To improve demand of generic drugs, the prescribers too need to be influenced by the regulators, as has happened in many countries of the world.

Finally, the requirement to maintain high quality standards for generic medicines should be non-negotiable and continuously be kept under careful vigil of the drug regulators.

The complex dynamics of the global generic drugs market are indeed intriguing. It is indeed a ‘Wonderland’, as it were.

Be that as it may, in this wonderland of pharma generics, as some continue to step in and some others continue to step over the line, it is also important to understand how this industry caters to the healthcare needs of billions of poor and needy.

Respective Governments across the world should facilitate speedy entry of more number of newer generic drugs in the market. Simultaneously, the drug regulators will require bringing to justice to all those forces, which will attempt blocking or delaying entry of generics, causing great harm to a vast majority of patients across the world.

By: Tapan J. Ray

State funded ‘Universal Healthcare’ in India: A laudable initiative of the Government

Posted on August 29, 2011 by Tapan Ray

January 11, 2011 edition of ‘The Lancet’, in the article authored by Prof. K. Srinath Reddy et al titled, “Towards achievement of universal health care in India by 2020: a call to action”, proposed creation of an Integrated National Health System in India through provision of universal health insurance, establishment of autonomous organizations to enable accountable and evidence-based good-quality health-care practices and at the same time reduce the high out-of-pocket expenditure on health care through a well regulated integration of the private sector within the national health-care system of India, by 2020.

About six months later, in its August 16, 2011 issue ‘The Times of India’ reported that the Planning Commission of India is currently framing up the blue print for a universal health insurance scheme which would provide a minimum cover to everyone in the country. It is expected that a surcharge will be levied for this Universal Health Care (UHC) initiative.

Though UHC is indeed a very commendably initiative for India as a nation, some dubious and self-styled ‘healthcare crusaders’ have already started raising the bogey of ‘the inadequacy’ of the scheme as a diversionary measure to misguide the easily vulnerable common man of the country.

Efforts being made to sensationalize the current status of the Indian healthcare system:

Even in the backdrop of UHC initiative, the following sensational headlines could be fallacious at times, which more often than not are being misused by the vested interests:

“About 1.8 million children under age of 5 die in India every year; 68,000 mothers die due to maternal causes, and 52 million children in the country are stunted”.
“With 70% people living in more than 600,000 villages across rural India, not more than an estimated 30% have access to modern medicine”.

It is unfortunate that many key stakeholders, interested in improved healthcare system, are continuously engaged in an eternal blame game of ‘it is not my monkey’. At the same time, taking advantage of this confused situation, some other groups plan to facilitate their vested interests by projecting a ‘weaker India’ with contentious planted reports both overtly and covertly.

In this prevailing scenario, which has been continuing since the last several decades, there is no dearth of people who would attempt to hijack the health interest of the nation to harvest mega commercial benefits.

While all concerned should keep a vigil on such sinister design, let me now try to place some hard facts before you on the current healthcare scenario in India in the context of UHC.

The facts on access to ‘round the year’ healthcare facilities in India:

As reported by the Government of India in 2004, access to healthcare infrastructure and services for the rural villages in terms of percentages were as follows (Source: India Health Report 2010) :

Primary Health Centers: 68.3
Sub-Centers: 43.2
Government Dispensaries: 67.9
Government hospitals in urban areas: 79
Private Clinics: 62.7
Private Hospitals: 76.7

I reckon, after implementation of National Rural Health Mission (NRHM) and National Urban Health Mission (NRUM), this situation prevailing in 2004 has improved. However, the scope for further improvement in all these areas still remains very high. UHC could be a key facilitator.

In any case, the shrill voice highlighting around 65% of population of India does not have access to healthcare or medicines seem to be highly misplaced.

‘Access to Modern Medicines’ is improving in India, slowly but surely:

Contrary to the above propaganda, in the real life situation the access to modern medicines by the common man in the country even in the rural India is steadily increasing.

This is evidenced by the facts, CAGR (volume) of the pharmaceutical industry since the last ten years has been around 13%, leaving aside another robust growth factor being contributed through the introduction of newer brands, every year. Encouraging growth of the Indian Pharmaceutical Market (IPM), since the last decade, both from the urban and the rural areas, certainly signals towards significant increase in the domestic consumption of medicines in India.

IPM maintained a scorching pace of 16.5% growth in 2010. A recent forecast of IMS highlights near similar growth trend in 2011, as well.

In addition, extension of focus of the Indian pharmaceutical Industry, in general, to the fast growing rural markets, which are currently growing at a much faster pace than ever before, clearly supports the argument of increasing ‘Access to Modern Medicines’ even in rural India. The improvement in access may not exactly be commensurate to the volume growth of the industry during this period, but a major part of the industry growth could certainly be attributed towards increase in access to modern medicines in India.

For arguments sake, out of this rapid growth of the IPM, year after year consistently, if I attribute just 5% growth per year, for even the last nine years over the base year of 1998 (as reported in 2004 by WHO) to improved access to medicines, it will indicate, at least, 57% of the population of India currently has access to modern medicines and NOT just 35%, as I wrote in my blog earlier, quoting the numbers from the above WHO report of 2004.

Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend. Official communications of the government still quote the outdated statistics, which states that 65% of the population of India does not have ‘Access to Modern Medicines’ even today. No wonder, why many of us still prefer to live on to our past.

Be that as it may, around 43% of the population will perhaps still not have ‘Access to Modern Medicines’ in India. This issue needs immediate attention of the policy makers and can be resolved with a holistic approach. UHC initiative together with improvement of healthcare infrastructure and delivery systems are the needs of the hour.

So called ‘Diseases of the Poor’ are no longer the ‘Leading Causes of Death’ in India:

As stated above, the disproportionate diversionary focus on the diseases of the poor by the vested interests, being the leading causes of death in India, should be re-validated with the data available with the office of the Registrar General of India (2009). This report highlights a totally different scenario, where the top five leading causes of death in terms of percentage, have been reported as follows:

Cardiovascular diseases: 24.8
Chronic Obstructive Pulmonary Disease (COPD): 10.2
Tuberculosis: 10.1
Cancer: 9.4
Ill-defined conditions: 5.3

Thus the diseases of the developed world, like cardiovascular diseases, COPD and Cancer cause over 45% of the total deaths in India, whereas Tuberculosis, Malaria, Diarrhea and digestive diseases cause around 23% deaths in the country. I reckon, UHC will take care of this emerging disease pattern in India.

The key reasons for not seeking medical treatment are not always poor ‘Access to Healthcare’:

While promoting the UHC, the government should take note of the key reasons for not seeking medical treatment, across socioeconomic milieu in the country. These reasons are not predominantly due to ‘Poor Access to Healthcare ‘. The following data will vindicate this point:

Reason	Rural Poorest 20%	Rural Richest 20%	Urban Poorest 20%	Urban Richest 20%
*Financial Reasons*	39.7	21.2	37.2	2.3
*Ailments not considered serious*	27.2	45.6	44.3	84.4
No Medical facilities	12.8	10.0	1.6	_
Others	20.3	23.2	16.9	13.3
Total	100	100	100	100

(Source: India Health Report 2010)

All these are happening probably because we do not have, as yet, any ‘well-structured healthcare financing system’ for all section of the society. The UHC initiative could well be a very significant part to the solution of this long standing problem together with other specific important measures, some of which I have already deliberated above.

While addressing the healthcare financing issue of India, January 11, 2011 edition of ‘The Lancet’ in its article titled, “Financing health care for all: challenges and opportunities” commented:

“India’s health financing system is a cause of and an exacerbating factor in the challenges of health inequity, inadequate availability and reach, unequal access, and poor-quality and costly health-care services. The Government of India has made a commitment to increase public spending on health from less than 1% to 3% of the gross domestic product during the next few years…. Enhanced public spending can be used to introduce universal medical insurance that can help to substantially reduce the burden of private out-of-pocket expenditures on health.”

I reiterate in this context, UHC initiative brings a breadth of fresh air to the prevailing rather gloomy healthcare financing scenario in India.

A comparison of private (out of pocket) health expenditure:

Look at it from, any angle, the general population of India is most burdened with high’ out of pocket healthcare expenses’ compared to even all of our neighboring countries:

1. Pakistan: 82.5% 2. India: 78% 3. China: 61% 4. Sri Lanka: 53% 5. Thailand: 31% 6. Bhutan: 29% 7. Maldives: 14%

(Source: The Lancet)

This factor itself, in case of just one or couple of serious illnesses, could make a middle class household of India poor and a poor could be pushed even Below the Poverty Line (BPL). UHC initiative of the Government is expected to change this scenario significantly in the years ahead.

The key unresolved issue of ‘affordability’ will get partially unresolved with UHC:

The above edition of ‘The Lancet’ highlighted that outpatient (non-hospitalization) expenses in India is around 74% of the total health expenses and the drugs account for 72% of this total outpatient expenditure. The study has also pointed out that 47% and 31% hospitalization in rural and urban areas respectively, are financed by loans and sell off assets.

This critical issue of ‘affordability’ of modern medicines is expected to get, at least partially resolved with the UHC scheme of the Government.

Around 32% of Indian BPL population can’t afford to spend on medicines:

While framing the UHC scheme, the government should keep in mind that a population of around 32% in India, still lives below the poverty line (BPL) and will not be able to afford any expenditure, however minor it may be, towards medicines. Proper implementation of the RSBY scheme with military precision, will be the right approach to this marginalized section of the society.

National Health Entitlement Card:

According to the Planning Commission, to enable the citizens availing the facilities provided by the ‘Universal Healthcare,’ the government will issue a ‘National Health Entitlement Card’, which will guarantee free access to relevant healthcare packages designed for the primary, secondary and tertiary healthcare for all. This scheme will be fully funded by the Central Government and cover both inpatient and outpatient services.

Conclusion:

Thus in the current scenario, the initiative of ‘Universal healthcare’ to provide access to healthcare to all citizens of India by addressing the critical issue of high incidence of ‘out of pocket’ expenses towards health care, is indeed a laudable initiative and ushers in a breadth of fresh air, despite all motivated comments against it.

We need also to keep in mind, although the ‘Universal healthcare’ is a fascinating mega initiative by the Planning Commission of India, this may not resolve all health related maladies of the country in one stroke.

Even in the changed scenario, a large section of the population both rich and poor and from both urban as well as rural India, may continue to not seek medical treatment assuming initially many of their ailments are not serious enough. Such a situation will definitely not materially improve the healthcare scenario of India, quite adversely affecting the economic progress of the country.

Such a situation, if continues, will necessitate continuous disease awareness campaigns with active participation of all stakeholders, including the civil society across the country, sooner than later, in tandem with all other measures as may deem necessary from time to time.

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.

PILMAN

A Tapan Ray Website

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