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Define And Adapt To Reality: Two Pivotal Pharma Leadership Skills For Sustainable Excellence

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Max DePree – a much quoted American businessman and author had once said: “The first responsibility of a leader is to define reality.”

While defining the reality within the drug industry today, it makes many industry leaders to ponder, despite so much of the good work done by the industry in various fields of pharma business, across the world, including India, why is the public perception on the overall leadership of this sector still so negative, and continue going south? Pharma leaders know the reasons too, but they seem to be still searching for the right set of answers without breaking the traditional mold of business.

Around end 2007, being concerned with this trend, the then Chairman of Eli Lilly reportedly expressed publicly what many industry observers have been saying privately for some time. He said: “I think the industry is doomed, if we don’t change”.

On the general apathy of breaking the traditional mold after having defined the business reality, an interesting article titled, “Healthcare Leadership Must Shift From A Cottage Industry To Big Business”, published on June 2, 2014 in Forbes, made some interesting observations, which are as relevant to India, just as many other countries of the world.

The article states that the ‘Healthcare Leadership’ has not kept up with the industry’s evolution to big business over the past 25-30 years – nor does it possess the required change management competencies to effectively lead and rapidly turn around an adaptive health care business model. Thus, unlike many other knowledge industries, pharma sector is still struggling hard to convert the tough environmental challenges into bright business opportunities. This leads to an important question: Being mostly inward looking, are these leaders failing to properly define reality around them, and therefore, not adapting to the critical external business environmental needs, soon enough?

Is current pharma leadership too inward looking?

From the available details, it appears that today, many inward-looking pharma leaders tend to ignore many serious voices demanding access to high quality medicines at affordable prices, especially for life threatening ailments, such as, cancer. Instead of engaging with the stakeholders in search of a win-win solution, global pharma leadership apparently tries to push the ball out its court with a barrage of mundane and arrogant arguments highlighting the importance of ‘drug innovation’ and hyping how expensive it is. Notwithstanding that by now, many people are aware of its frequent use, generally by the global pharma players, mostly as a veil, whenever required. Even then, many pharma leaders, instead of accepting the reality, continue to remain insensitive to the concerns not just of most patients, but other stakeholders and their respective governments also. This mindset further reinforces their inward-looking and self-serving image. This brings to the fore the key issue: Is this high time to pass the baton to a new breed of pharma leaders?

In the above backdrop, this article dwells on some intrinsic issues involved with the leadership puzzle of the industry, as it were. Thereafter, it deliberates on the importance of making some easy self-tests available to the young and especially the millennial pharma professionals, to facilitate them to self-discover themselves in this space, and that too at an early stage of their professional career, as they try to understand and define the business and environmental realities facing the industry.

Leadership skills are difficult to find:

Focusing on the pharma industry, I would say, especially in the pharma sector, leadership skill in all its functional areas though is considered as the most important one, but are equally challenging while identifying the right persons.

The 20th Pharma CEO Survey, March 2017 of PwC, vindicates this point. The survey covered 89 pharma CEOs from 37 countries. Nearly all the Pharma CEOs participating in this survey picked out leadership as the most important for their organization, giving it the top spot, closely followed by problem-solving, creativity and innovation, all bracketed in the second, with collaboration and adaptability occupying the equal third rank, as follows:

Relative importance of skills in pharma industry Skill sets Respondents answering somewhat difficult or very difficult to get each one of these
1. Leadership 79
2. Creativity & Innovation 75
3. Emotional intelligence 72
4. Adaptability 63
5. Problem-solving 55

Over two-thirds of the CEOs face difficulty in recruiting people with the requisite skills that they consider most important to their organization, such as, leadership, problem-solving, and creative skills, the report highlighted. For further deliberation hereunder, I shall pick up the top one – the leadership skill for the pharma industry, as I see it.

The age-old question – ‘Are leaders born or made?’

A critical question that is often asked even today – ‘Are leaders born or made?’ The question keeps coming as some enthusiasts continue to argue that successful leaders are born with visible or apparently invisible leadership traits.

Are leaders born?

To answer this question, let me quote an example. The Management Study Guide (MSG), well-articulated an approach to the study of leadership known as the ‘Great Man Theory’, giving examples of the great leaders of the past, such as, Alexander the Great, Julius Caesar, Napoleon, Queen Elizabeth I, Abraham Lincoln and Mahatma Gandhi. They all seem to differ from ordinary human beings in several aspects, possessing high levels of ambition coupled with clear visions of precisely where they want to go.

Added to these examples are many top business executives, sports personalities, and even contemporary politicians, who often seem to possess an aura that sets them apart from others. These persons are cited as naturally great leaders, born with a set of personal qualities that made them effective leaders. Thus, even today, the belief that truly great leaders are born, is not uncommon. Thus, according to the contemporary theorists, leaders are not like other people. They do not need to be intellectually genius or omniscient prophets to succeed, but they should certainly have the ‘right stuff’, which is not equally present in all people, MSG highlights.

Even today, some continue to believe in the ‘Great Man Theory’, regardless of many well carried out research studies of the behavioral scientists establishing that it is quite possible for individuals becoming leaders through various processes, such as, self-learning, keenly observing or working with some good leaders, following their advices, training, and practicing the experiences thus gained in one’s real life.

Are leaders made?

Just as above, to answer this question, as well, I would cite another important example.

A September 21, 2016 article titled, “What Science Tells Us About Leadership Potential”, published in the ‘Harvard Business Review (HBR)’, while answering the question ‘who becomes a leader’, stated as follows:

“Any observable pattern of human behaviors is the byproduct of genetic and environmental influences, so the answer to this question is ‘both’.  Estimates suggest that leadership is 30%-60% heritable, largely because the character traits that shape leadership - personality and intelligence - are heritable. While this suggests strong biological influences on leadership, it does not imply that nurture is trivial. Even more-heritable traits, such as weight (80%) and height (90%), are affected by environmental factors. Although there is no clear recipe for manipulating the environment in order to boost leadership potential, well-crafted coaching interventions boost critical leadership competencies by about 20%–30%.”

What would a young pharma professional do in this situation?

The current breed of top leaders would continue grooming and promoting mostly those who fit their profile, while in the family owned businesses succession usually takes place from within the family. The situation is no different in the pharma industry. However, various studies indicate that millennial professionals with leadership traits will develop themselves.

Keeping this in mind and, at the same time, going by the above HBR article, I would tend to accept the dictum that, “Any observable pattern of human behaviors is the byproduct of genetic and environmental influences”. Thus, for identifying and then honing leadership skills in the pharma business, just as many other industries, I would prefer the process of dovetailing the heritable leadership traits with various environmental influences.

An ambitious pharma professional with high aspiration to make a difference in the organization that the individual represents, would obviously wonder what the way forward for him to achieve the goals. In my view, an honest self-test is the first and basic move in this direction.

The self-test:

Taking a cue from the article titled “Strategic Leadership: The Essential Skills”, published in the January-February 2013 issue of The Harvard Business Review (HBR), I would suggest that the young professionals may wish to ask themselves the following important questions:

  • Do I have the right networks to help myself see opportunities before competitors do?
  • Am I comfortable challenging my own and others’ assumptions?
  • Can I get a diverse group to buy into a common vision?
  • Do I learn from mistakes?

The answer to each of these ones should be clear and honest, as one doesn’t need to disclose those answers to anyone else. Nonetheless, by following this process, a young professional gets a clear view of where he or she stands in each of these important areas, which cover some of the basic traits of a leader.

The leadership package:

Irrespective of whether an individual has some heritable leadership traits or not, the above self-test would reveal a person’s strengths and weaknesses, help address the deficits and optimize the full portfolio of leadership skills, independently or otherwise.

Nevertheless, it is important to bear in mind, as several research studies have already established, though leadership skills are important and difficult to find, a few other salient skills such as, ability to apply in real life a creative and innovative mindset, supported by high emotional intelligence or emotional quotient (EQ) are also critical. This is because, together these offer the all-important leadership package for an all-round successful leader.

Should pharma leadership be eclectic?

I guess so, as there does not seem to be any better alternative either. Thus, I reckon, traditional pharma leadership needs to be eclectic. It has still got a lot to learn from other industries too. Let me give a relevant example here – to speed up development of electric cars by all manufacturers, the Cofounder and Chief Executive Officer Elon Musk of Tesla Motors has reportedly decided to share its patents under ‘Open Source’ sharing of technologies with all others. Elon Musk further reiterated: “If we clear a path to the creation of compelling electric vehicles, but then lay Intellectual property (IP) landmines behind us to inhibit others, we are acting in a manner contrary to that goal.”

In the important ‘green’ automobile space, this is indeed a radical, gutsy and an exemplary decision to underscore Tesla Motor’s concern about global warming.

Why such type of leadership is so rare in the global pharma world, even today? Besides sanctimonies, as these appear, why the global pharma leaders are not taking similar large scale initiatives for drug innovation, especially in the areas of difficult diseases, such as, Cancer, Alzheimer’s, Multiple Sclerosis and Metabolic disorders, just to name a few? For this purpose, pharma organizations would require mettlesome change agents who can break the traditional mold –new leaders of the millennial generation having a different business outlook altogether, could possibly do so.

Becoming a change agent:

Today, more than ever before, the ultimate goal of pharma leaders requires moving beyond making more money to satisfy the shareholders and stock markets. It also needs to include the requirements of society, in general, more than what mandatory CSR demands. This is palpable today, as many stakeholders vehemently questioning the business game plan of many pharma players. Would this situation change? I don’t know, but it should, which prompts a change in the overall quality of pharma leadership, at all levels. I have had reason to believe that a good number of bright, millennial pharma professionals look for empowerment to discover themselves early. Right at that stage, they also need to chart a road map for self-development, which would facilitate attaining their professional goals, quite in sync with the broad societal expectations, as they move on in life.

New pharma leadership would require greater focus on ethics and engagement:

While pharma industry leaders, in general, have been impressive articulators of all right things that need to happen, ‘Talking the Talk’ and ‘Walking the Walk’ in the frontiers of business ethics, values and shared goals are found wanting in many of them. These articulations are probably used to run expensive global ‘Public Relations (PR)’ campaigns, lobbying and advocacy initiatives in the corridors of power.

What else then could possibly be the reason for such perception gap that this great industry has allowed to increase, over a long period of time? Could it be that many pharma leaders have not been able to adequately adapt themselves to the demands of the changing healthcare environment and the needs of various stakeholders in this sector? Is the leadership, therefore, too archaic and it’s a time for a change?

Thus, unlike the current pharma leadership, the new age leadership needs to be ethically grounded, and engage all stakeholders effectively in a transparent manner with impeccable processes of governance involving all areas of business. Such leaders may not be know-all individuals in the pharma business, but must possess a clear vision of where they want to lead the company to, and don’t slip back, especially in terms of public image and meeting patients’ expectations.

In conclusion:

Pharma business in modern times faces rapidly changing stakeholder expectations, which are generally difficult to predict well in advance. Thus, today’s pharma leaders require to adapt their strategic approach and the tactical game plans accordingly for business excellence in an inclusive manner, and simultaneously try to shape the environment to the extent possible.

There is a growing expectation from the pharma leaders to do business by imbibing a caring outlook towards the society, where it operates. Spending time and money to transplant the past practices in the changed environment, or continuing with the traditional business approaches, I reckon, is a no-win game today.

Thus, there arises a need to help the young pharma professionals, from the early stages in their professional life, for shaping up as the chief change agent in the organization that they would lead. Even after reaching where they wanted to reach, these leaders should keep studying on a continuous basis, various other successful leadership styles, approaches and visions, to splice them into a more productive strategic approach for the business or functional areas that they lead.

This new breed of leaders would also require defining the reality prevailing in the industry on an ongoing basis, to pave the way for a glorious future for their respective organizations. This effort would call for regular and effective engagement with all the stakeholders through various digital and other platforms. The critical question that the new pharma leadership should never forget to continually ask themselves: “How can my organization provide better access to high quality and effective medicines to most patients along with achieving commercial excellence in business?”

Properly defining and quickly adapting to associated environmental realities with a creative mind, requisite emotional intelligence and ethical business practices, would call for coming out of the zone of comfort with promptness. These, I reckon, would be the two pivotal success factors for new pharma leaders for inclusive and sustainable success in business, as the industry moves on.

By: Tapan J. Ray

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

Sets 2013, Dawns 2014: Top 7 Pharma Developments

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Wish You Good Health, Happiness, Success and Prosperity in 2014

In this article I shall focus on ‘Top 7 Pharma Developments’, both while ‘Looking Back to 2013′ and also during my ‘Crystal Gazing 2014′.

Looking Back to 2013:

While looking back, the ‘Top 7  Pharma Developments’ unfolded in India during 2013, in my opinion, are as follows:

1. Supreme Court judgment on Glivec: 

The landmark Supreme Court judgment on the Glivec case has vindicated, though much to the dismay of pharma MNCs, the need to strike a right balance between encouraging and protecting innovation, including incremental ones, and the public health interest of India.

2. DPCO 2013:

Following the National Pharmaceutical Pricing Policy (NPPP) of December 2012, the new Drug Price Control Order 2013 (DPCO 2013) signaled a significant departure from the decades old systems of arriving at both the ‘span’ and also the ‘methodology’ of drug price control in India. However, its implementation has been rather tardy as on today.

As a result, at the very beginning of the process of its effective roll-out, the new DPCO faltered badly. It created unprecedented complications and dead-locks not just for the pharmaceutical companies and the trade, but for the National Pharmaceutical Pricing Authority (NPPA), as well, which has not been able to announce the new ceiling prices for at least 100 essential drugs, even 8 months after notification of this order.

The pharma companies and the NGOs have already taken this policy to the court, though for different reasons. The rationale for the National List of Essential Medicines (NLEM) 2011 has also been questioned by many along with a strong demand for its immediate review.

Thus much awaited DPCO 2013 is still charting on a slippery ground.

3. India, China revoked 4 pharma patents:

In the Intellectual Property Rights (IPR) arena many National Governments have now started asserting themselves against the prolonged hegemony of the Western World pressing for most stringent patent regime across the globe, at times even surreptitiously. Such assertions of these countries signal a clear tilt in the balance, favoring patients’ health interest rather than hefty gains in business profits, much to the delight of majority of world population.

Revocation of four drug patents by India and China within a fortnight during July-August 2013 period has thus raised many eyebrows, especially within the pharma Multinational Corporations (MNCs). In this short period, India has revoked three patents and China one.

While these unexpected and rather quick developments are probably double whammy for the pharma MNCs operating in India and China, a future trend would possibly emerge as soon as one is able to connect the evolving dots.

4. Supreme Court intervened in Clinical trials (CT):

With a damning stricture to the Indian Drug Regulator, the Supreme Court, in response to a PIL filed by the NGO Swasthya Adhikar Manch, came out heavily on the way Clinical Trials (CTs) are approved and conducted in the country.

Breaking the nexus decisively between a section of the powerful pharma lobby groups and the drug regulator, as highlighted even in the Parliamentary Committee report, the Ministry of Health, as reported to the Supreme Court, is now in the process of quickly putting in place a robust and transparent CT mechanism in India.

This well thought-out new system, besides ensuring patients’ safety and fair play for all, is expected to have the potential to help reaping a rich economic harvest through creation of a meaningful and vibrant CT industry in India, simultaneously benefitting millions of patients, in the years ahead.

5. US-FDA/UK-MHRA drug import bans: 

Continuous reports from US-FDA and UK-MHRA on fraudulent regulatory acts, lying and falsification of drug quality data, by some otherwise quite capable Indian players, have culminated into several import bans of drugs manufactured in those units. All these incidents have just not invited disgrace to the country in this area, but also prompted other national regulators to assess whether such bans might suggest issues for drugs manufactured for their respective countries, as well.

This despicable mindset of the concerned key players, if remains unleashed, could make Indian Pharma gravitating down, stampeding all hopes of harvesting the incoming bright opportunities.

The ‘Import Alert’ of the USFDA against Mohali plant of Ranbaxy, has already caused inordinate delay in the introduction of a cheaper generic version of Diovan, the blockbuster antihypertensive drug of Novartis AG, after it went off patent. It is worth noting that Ranbaxy had the exclusive right to sell a generic version of Diovan from September 21, 2012.

The outcome of such malpractices may go beyond the drug regulatory areas, affecting even the valuations of concerned Indian pharma companies.

6. Pharma FDI revisited in India: 

After a series of inter-ministerial consultations, the Government of India has maintained 100 percent FDI in pharma brownfield projects through FIPB route. However, removal of the ‘non-compete’ clause in such agreements has made a significant difference in the pharma M&A landscape.

7. ‘No payment for prescriptions’:

Unprecedented acknowledgement and the decision of GSK’s global CEO for not making payments to any doctor, either for participating or speaking in seminars/conferences to influence prescription decision in favor of its brands, would indeed be considered as bold and laudable. This enunciation, if implemented in letter and spirit by all other players of the industry, could trigger a paradigm shift in the prescription demand generation process for pharmaceuticals brands.

Crystal Gazing 2014:

While ‘Crystal Gazing 2014′, once again, the following ‘Top 7 (most likely) Pharma Developments’, besides many brighter growth opportunities, come to the fore:

1. Public Interest Litigation (PIL) now pending before the Supreme Court challenging DPCO 2013 may put the ‘market based pricing’ concept in jeopardy, placing the pharma price control system back to square one.

2. The possibility of revision of NLEM 2011, as many essential drugs and combinations have still remained outside its purview, appears to be imminent. This decision, if taken, would bring other important drugs also under price control.

3. Universal Health Care (UHC) related pilot projects are likely to be implemented pan-India along with ‘free distribution of medicines’ from Government hospitals and health centers in 2014. Along side, more Public Private Partnership (PPP) initiatives may come up in the healthcare space improving access to quality healthcare to more number of patients.

4. With the Supreme Court interventions in response to the pending PILs, more stringent regulatory requirements for CT, Product Marketing approvals, Pricing of Patented Medicines and Ethical Marketing practices may come into force.

5. Possibilities of more number of patent challenges with consequent revocations and grant of several Compulsory Licenses (CL) for exorbitantly priced drugs in life-threatening disease areas like, cancer, loom large. At the same time, between 2013 and 2018, US$ 230 billion of sales would be at risk from patent expirations, offering a great opportunity to the Indian generic players to boost their exports in the developed markets of the world.

6. More consolidation within the pharmaceutical industry may take place with valuation still remaining high.

7. Overall pharma IPR scenario in India is expected to remain as robust and patient friendly as it is today, adding much to the worry of the MNCs and relief to the patients, in addition to the generic industry. More number of countries are expected to align with India in this important area.

Conclusion:

The year 2013, especially for the pharmaceutical industry in India, was indeed eventful. The ‘Top Seven’ that I have picked-up, out of various interesting developments during the year, could in many ways throw-open greater challenges for 2014.

My ‘Crystal Gazing 2014’, would challenge the pharma players to jettison their old and traditional business mindsets, carving out new, time-specific, robust and market savvy strategic models to effectively harvest newer opportunities for growth.

That said, the pharmaceutical industry will continue to thrive in India with gusto, including the MNCs, mainly because of immense potential that the domestic market offers in its every conceivable business verticals, propelled by continuous high growth trend in the domestic consumption of medicines, excepting some minor aberrations.

The New Year 2014, I reckon, would herald yet another interesting paradigm for the pharma industry. A paradigm that would throw open many lucrative opportunities for growth, both global and local, and at the same time keep churning out different sets of rapidly evolving issues, requiring more innovative honed corporate skill-sets for their speedy redressal, as the time keeps ticking.

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.

 

Indian Pharmaceutical Landscape: Looking back (2011), Looking Ahead (2012)

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2011 witnessed many interesting developments within the pharmaceutical industry of India. All these developments may not be appreciated by all stakeholders alike, nonetheless had an impact on the industry of varying degree both in the qualitative and quantitative terms.

That said, the list of ‘unfinished agenda’ of the government to improve healthcare access and simultaneously to fuel the growth engine of the industry with reform oriented policy initiatives, kept on increasing staggeringly.

The issue of improving access to modern medicines with comprehensive measures continued to remain unaddressed even in the draft National Pharmaceuticals Pricing Policy 2011. Similarly, the Prime Minister’s dedication of the decade of 2010 as the decade of innovation remained a pipe dream for the pharmaceutical industry of the country.  Policy paralysis of the decision makers during the year failed to translate even this praiseworthy intent into reality.

Increasing consumption of medicines in India: 

Indian Pharmaceutical Market (IPM) continued to grow at a scorching pace of around 15% registering a turnover of Rs 59,621 Crore during the year. (Source: Nov 2011- AIOCD/AWACS).

Fast increasing consumption of medicines in the country continued to position IPM not just as another global success story, but also an emerging pharmaceutical force to reckon with, especially in the development and manufacturing of high quality and low cost generic pharmaceuticals together with its world-class  Contract Research and Manufacturing Services (CRAMS).  Indian pharmaceutical players now cater to about 20% of global requirements of high quality and affordable generic medicines of all types.

Consolidation process continues:

At the same time, ongoing consolidation process within the pharmaceutical industry continued in 2011 with Aventis Pharma (Sanofi) acquiring Universal Medicare and Zydus Cadila shopping for Biochem Pharma.

November 30, 2011: Signaled beginning of the end of the blockbuster drug era:

On November 30, 2011, the patent expiry of the world largest ever brand Lipitor (Pfizer), clocking an annual turnover of over US$ 14 billion and accounting for more than 20% of the company’s sales turnover until recently, I reckon, heralds beginning of the end of the blockbuster drug era.  To equal the turnover of Lipitor with another brand will be a huge challenge not only for Pfizer, but also for any other company in the near to medium term.

Patent expiry of Lipitor will now help opening up the super size Atorvastatin market of the developed world to the Indian generic players.

Launch of innovative products:

Launch of several innovative and patented products in India by the global players during 2011, reconfirmed the attractiveness of the IPM to the global innovator companies. Some of these innovative products are Revolade (Eltrombopag) , Votrient (Pazopanib Hydrochloride) of GlaxoSmithKline, Flexbumin solution of Baxter and BD Ultra-Fine III Nano of Becton Dickinson.

Looking back (2011):

During 2011, the industry witnessed a number of initiatives from the government as an ongoing process, some of which are as follows:

  • Establishment of dedicated Pharma Zones in Mumbai, Hyderabad and Delhi airports, including cold rooms to help achieving world-class cold-chain logistics in India in the medium term.
  • For the first time in 2011, the government initiated steps to put the ‘Biosimilar Guidelines’ in place to ensure high safety standards for follow-on biologics in India. The Department of Biotechnology (DBT) and the Central Drugs Standard Control Organization (CDSCO) prepared these guidelines in consultation with the industry, the effective implementation of which is keenly awaited. This important step will also help Indian biosimilar drug manufacturers to prepare themselves well to explore the opportunity of gradually opening-up biosimilar drugs markets in the western world, like the USA and EU.
  • The Department of Pharmaceuticals (DoP) came out with a draft Uniform Code of Pharmaceutical Marketing Practices (UCPMP) in 2011 to curb alleged unethical practices of ‘bribing doctors’ by pharma companies. The code initially is expected to be of voluntary in nature and its effective implementation will be ensured by the pharmaceutical companies and the industry associations over a period of six months. Thereafter, if the implementation level of UCPMP does not measure up to the expectations of the DoP, it will be made mandatory under strict regulatory control.  However, the final UCPMP has not been announced by the government, as yet.
  • The Ministry of Health and Family Welfare constituted a twelve member task force to evolve a long term strategy to address various issues faced by the Indian Pharmaceutical Industry. Unfortunately, tangible outcome from this committee is still awaited.
  • Following the Supreme Court directive to the government to bring essential drugs under price control, after a very long time, the Government came out hurriedly with a draft National Pharmaceuticals Pricing Policy 2011 (Draft NPPP 2011) by increasing the span of effective price control to over 65% of the IPM. This flawed draft policy, if implemented, could stifle the growth of the industry.
  • During the year the Ministry of Health and Family Welfare finalized the National Vaccine Policy to strengthen the institutional framework required for the universal immunization program. The policy is also expected to streamline the decision-making process on new and underutilized vaccine introduction, besides addressing issues of vaccine security, management, regulatory guidelines and vaccine research and development.
  • The Ministry of Health and Family Welfare also came out with the National Health Research Policy in 2011 to overcome the weaknesses of the publicly funded health structures, which restrict research in the priority health areas. This policy is expected to help maximizing the returns on investments in health research through creation of a robust health research system.
  • New National Manufacturing Policy (NMP), which ultimately saw the light of the day during the year, is expected to promote the productivity of the pharmaceutical sector, as well. The policy will help enhancing the share of total manufacturing of all industrial sectors put together from the current level of 15% to 25% of the GDP within a decade and would also help creating 100 million jobs in the country.
  • 100% FDI in the Pharmaceuticals sector of India remained unchanged, which will attract more foreign investments in this sunrise sector of India.
  • ‘Universal Health Converge’, announced during the year by the Planning Commission of India, will help reducing significantly the ‘out of pocket’ expenses incurred towards healthcare, improving its access to all.

Looking Ahead (2012):

  • The good news for 2012 is that the Planning Commission has decided to increase the national spending on health to 2.5% of the GDP in the 12th Five Year Plan starting from 2012.
  • In 2012, if the ‘NPPP 2011’ is implemented as in its current draft form, it could seriously impede the court of the vibrant pharmaceutical industry of India.
  • Introductions of DTC and GST: The ‘Discussion Paper’ on the draft ‘Direct Taxes Code Bill, 2009’ highlighted the possibility that the GST regime could have multiple rates based on classification of goods that are to be listed under the exempted category, like goods which would attract lower rate and another category of goods qualifying for standard rate. This concept of multiple rate of tax under GST regime could impact the pharma/health science industry as the business models followed by this industry typically involves import/manufacture and sale of life saving drugs, medical devices and other formulations, which presently attract either NIL rate of duty under central excise/VAT or lower rate of excise duty at 4%. Presently clinical trial services/R&D services attract service tax at 10.30%.
  • The growth trajectory of the IPM is expected to continue to go north despite slowdown in the US and European economies in 2012.

Conclusion:

Like many other sectors, the pharmaceutical industry of India also witnessed the reform oriented policy paralysis of the government in 2011, barring some superficial, half- hearted and incomplete initiatives, as indicated above.

Key areas of general public health interest, encouraging innovation, fostering R&D and improving access to medicines to alleviate healthcare related problems of the common man and at the same time to propel the industry to the inclusive high growth trajectory, have still remained unanswered.

Faster recovery from reform-oriented policy paralysis of the government and effective translation into reality of the seemingly good intent of the policy makers, is now eagerly awaited in 2012.

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.

Gone 2010…Comes 2011: Looking Back…Looking Ahead at the Healthcare Space of India

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Our country, especially the media and the politicians (perhaps not so much the ‘Aam Aadmi’), appears to be totally engrossed now in uprooting the issue of corruption from the soil of India, once and for all. Politicians of all hues are not showing any sign of respite to let go this opportunity, without squeezing out the last drop of ‘political elixir’, out of the current high level of self-created cynicism. This is very important for them in the run-up to the next general and state elections for ultimate win in the political power-game. The ‘common man’, like you and me, on the contrary, is perhaps thinking about job creation, financial progress, infrastructure development, education and health.

The Fourth Estate of the country, especially the Electronic Media, seems to be lapping up any news, which could even remotely help the TRPs of their respective news channels going north.

In a chaotic situation like this, when even the country’s parliament is defunct, it appears, by and large the entire nation is currently being encouraged to get deeply engaged in ‘self-flagellation’, as it were. There seems to be a desperate need to prove to the world, time and again, how bad the Indians are. The ‘Brand India’ after taking so many powerful blows on its chin, is in tears now.

Be that as it may, has India achieved anything in the year 2010 with a public spend of just around 1% of the GDP towards healthcare? Let me try to capture some of those hard facts, which could appear as a laundry list though, at the very onset of the brand New Year. I have collated these details from various published sources.

Some doomsayers with ever ‘pontifying’ mind-set would nevertheless keep brushing all these aside. However, acknowledging these achievements, I would rather say, “all these are too little even for too few”.

Whatever it is, I am trying to put these details in one place for a comprehensive record of the year, just gone by.

Here it goes:

I. Healthcare Indicators:

I. The number of polio cases has sharply declined during the year. Only 41 polio cases have been reported as on November 30, 2010, against 633 in the corresponding period of 2009.

II. Adult HIV prevalence has declined from 0.41% in 2000 to 0.31% in 2009. The number of new annual HIV infections has declined by more than 50% from 2000 to 2010.(Source: National AIDS Control Organization )

III. Leprosy Prevalence Rate has declined to 0.71/10,000 in March, 2010. 32 State/UTs have achieved elimination by March 2010, leaving only Bihar, Chhattisgarh and Dadra & Nagar Haveli.

IV.TB mortality in has gone down from over 42/lakh population in 1990 to 23/lakh population in 2009 as per the WHO global report 2010. The prevalence of the disease in the country has reduced from 338/lakh population in 1990 to 249/lakh population by the year 2009 (Source: WHO global TB report, 2010).

II. New Initiatives:

  1. A bivalent oral polio vaccine (bOPV) was launched in the country in Bihar on January 9, 2010.
  2. A ‘Sports Injury Centre’ was dedicated to the nation at the Safdarjung Hospital, Delhi, with an inpatient capacity of 35 beds with all modern facilities.
  3. The Indian Pharmacopeia Commission published the 2010 version of Indian Pharmacopeia.
  4. Upgradation of the National Centre for Disease Control (NCDC), Delhi with an estimated cost of Rs 382.41. Crore.
  5. A scheme to support the State Government Medical Colleges for conducting paramedical courses with a total proposed project cost of Rs.1156.43 Crore.
  6. Setting up of 132 Auxiliary Nurse Midwives training schools at an estimated cost of Rs.5.00 Crores per school and 137 General Nursing and Midwifery training schools at an estimated cost of Rs.10.00 Crores per school.
  7. Ministry of Health and Family Welfare and Ministry of Railways signed a memorandum of Understanding for development of healthcare infrastructure along the railway network of the country.
  8. A new ‘National Program for Health Care of the Elderly’ (NPHCE) was approved with an outlay of Rs. 288.00 Crore for 2010-11 & 2011-12.
  9. Urban Slum Health Check-up Scheme for Diabetes and Blood pressure was launched in New Delhi on November 14, 2010. Pilot project is in progress in Bangalore, Hyderabad, Kolkata, Mumbai, Chennai and Ahmedabad.
  10. The revised National Program for Prevention & Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS) was approved with a budgetary provision of Rs. 1230.90 Crore
  11. Under Central Government Health Scheme (CGHS), a pilot project of a standalone hemodialysis center has started at Sadiq Nagar CGHS Wellness center in collaboration with M/S Alliance Medicorp (India) Limited, Chennai, under Public Private Partnership (PPP).

III. National Rural Health Mission (NRHM)

  1. Healthcare Infrastructure:

I. New construction and upgradation of 433 District Hospitals, 2921 Community Health Centers (CHCs), 4165 Primary Health Centers (PHCs) and 11856 Health Sub-Centers.

II. 9120 PHCs became functional for 24 hours, as compared to only 1262 in 2005.

  1.                III.  2426 health facilities which include District Hospitals, Sub-District Hospitals and Community Health Centers started functioning as First Referral Units (FRUs) as compared to 955 in 2005.

 

  1.                IV.  1653 Mobile Medical Units are operating in different States providing services in the interior areas.
  2. Human Resource:

I. 2394 Specialists, 8284 MBBS doctors, 9578 AYUSH doctors, 26734 staff nurses, 53552 ANMs and 18272 other Para-medical staff were added to the health system to improve the services.

II. Over 8.33 lakh trained ASHA/community workers were engaged to link the households with the health facility.

 

3.  Healthcare System:

 

I. State and District Health Societies were set up in all the States and Union Territories (UTs).

  1.                               II.  Planning capacity at the district level was strengthened and Integrated District Health Action Plan prepared by 540 districts.

4. Community Engagement:

Effective and efficient decentralized management of health system is being achieved through communalization of facilities, adequate and flexible financing with community accountability, monitoring progress against Indian Public Health Standards, innovations in human resources, together with engagement and building of capacity at all levels.

I. 29904 ‘Rogi Kalyan Samitis’ were registered in the health facilities up to PHC level.

  1.                               II.  4.93 lakh Village Health and Sanitation Committees (VHSCs) were constituted and 4.82 lakh joint accounts at the Village Health and Sanitation Committees and Health Sub-Centers were opened.
  2.                            III.  23.61 million Village Health & Nutrition Days were held at village level over the last three years to provide immunization, maternal and child healthcare and other public health related services at ‘Anganwadi’ centers.

5. Service Delivery:

I. Under the ‘Janani Suraksha Yojana (JSY)’, which is cash transfer scheme to promote institutional delivery, over 100.78 lakh pregnant mothers were covered in 2009-10 as against 7.39 lakh in 2005-06.

  1.                               II.  53500 male health workers were hired for all the Sub Health Centers (SHC) in 235 high focus districts for disease control with a total costs of Rs. 385.52 Crores per year.

6. Family Planning:

  1.                                 I.  Fixed day Fixed Place Family Planning Services round the year through PHCs
  2.                               II.  ‘Santushti’ strategy was implemented through ‘Janasankhya Sthrirata Kosh’, to provide private sector gynecologists and vasectomy surgeons an opportunity to conduct sterilization operations through Public Private Partnership (PPP) initiatives.

7. Disease Control:

  • National Tuberculosis Control Program:

I. Treatment success rates increased from 25% to 87% in 2010.

II. Death rates have declined from 29% to 4% in 2010

III. Treatment success rate is now >85% and new sputum positive (NSP) case detection rate is currently more than the global target of 70%.

  • The National Program for Control of Blindness started providing financial assistance to NGOs for cataract operations and treatment of other eye diseases.
  • 75 districts were added to the National Program for Prevention and Control of Deafness (NPPCD), making it a total of 176 districts of 15 States and 4 UTs. Rs.11.50 Crore has been provided for the current year.
  • Phase–I of ‘Pradhan Mantri Swasthya Suraksha Yojana’ projects commenced with an allocation of Rs 9307.60 Crore.

IV. Healthcare Legislation:

1. The Indian Medical Council (Amendment) Bill 2010 was introduced in the ‘Lok Sabha’ to give effect to amendments to the IMC Act 1956 by which in certain specified situations Government can dissolve the elected Medical Council and replace it, for a period not exceeding one year with a nominated Board of governors.

2. The “National Institute of Mental Health and Neuro Sciences Bangalore Bill, 2010” was introduced in the ‘Rajya Sabha’ to facilitate NIMHANS to develop as an Institute of National Importance on the lines of All India Institute of Medical Sciences, New Delhi,

3. The Clinical Establishments (Registration & Regulation) Bill, 2010 was passed by both Houses of Parliament and notified. The Act aims at providing registration & regulation of clinical establishments in the country with a view to prescribing minimum standards of facilities and services.

V. International Cooperation:

  • A MoU on the Establishment and Operation of Global Disease Detection (GDD) – India Centre, between National Centre for Disease Control, New Delhi and Centre of Disease Control and Prevention, Atlanta, USA, was signed during the recent visit of the US President Mr. Barack Obama in November 2010.
  • India raised the issue of counterfeit medicines and “urged countries to steer clear from the commercially motivated debates over the ‘counterfeit’ issue which have hampered public health by preventing access to good quality and low cost generic drugs”. As a result WHA adopted a resolution establishing a time limited and result oriented working group on substandard / spurious / falsely-labeled / falsified / counterfeit medical products comprised of and open to all Member States.

VI. Health Research:

I. Draft National Health Research Policy prepared during the year, is being debated across the country.

II. Draft Policy for Knowledge Management Policy for Health – services, education and research prepared and debates completed.

III. Based on guidelines for use of assisted reproductive technologies a draft Bill has been prepared.

IV. Guidelines for management of cancers of buccal mucosa, stomach & cervix has been developed.

My wish-list for 2011:

In my view, the following 5 important issues, if addressed effectively in 2011,could make a significant impact on the Healthcare space of India:

1. Announcement of a robust, reform oriented long overdue pharmaceutical ‘Drug Policy’ in India.

2. More budgetary allocation and a transparent delivery system for the National Rural Health Mission (NRHM) and the Rashtriya Bima Yojana (RBY) to improve access to healthcare and ensure inclusive growth in the healthcare sector, covering majority of the population of the country.

  1.               3.  A strong healthcare financing model covering all strata of  society to reduce  the burden of huge ‘out of pocket’ healthcare expenses and make healthcare more accessible and affordable to all.

- The 2010 ‘World Health Report’ of the ‘World Health Organization (WHO)’ “provided governments of various countries with practical guidance on ways to finance healthcare expenses. Taking evidence from all over the world, the report showed how all countries, rich and poor, can adjust their health financing mechanisms so more people get the healthcare they need.” I reckon, policy makers in India will exert enough efforts in 2011 for speedy implementation of such reform oriented healthcare initiatives in the country in its endeavor to fulfill the long overdue promise – ‘health for all.’

4. Progressive policy and fiscal measures to encourage innovation and pharmaceutical R&D within the country

5. Speedy resolution of all Intellectual Property related disputes through ‘Fast Track IP Courts’ to create appropriate innovation oriented ‘Echo System’ in the country.

Conclusion: 

All the achievements of the year just gone by, are good… but are these enough? India in its ‘Healthcare Policy’ statement, way back in mid-1980 promised, ‘health for all’ by the year 2000. We are not there, not just yet.

Though the country is trying hard to achieve the ‘Millennium Development Goals (MDG)’ by 2015, as the situation stands today, it appears a remote possibility, in many areas.

Non-communicable diseases are now posing a major threat to the country, significantly increasing the burden of disease. The World Health Organization (WHO) has cautioned that India would be the ‘diabetic capital’ of the world with a population of around 80 million diabetic patients by 2030. Further, the ‘Cardiological Society of India’ predicts that there would be around 100 million cardiac patients in the country by 2020, which roughly works out to be around 60% of the total cardiac patient population of the world.

Keeping all these in view, the achievements made by the country in the year 2010, though should be taken note of… but the moot question still remains, ‘aren’t all these too little even for too few?’

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.