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Pharma’s Digital Initiatives In India: A Missing Link

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An interesting study – designed to investigate the challenges that Health and Human Services (HHS) organizations face in implementing digital and data solutions, stands out today – for many reasons. One such being, this ‘multi-country survey’ project team had no inkling about the pandemic when the project was undertaken.

This study was conducted by a research team from Imperial College London’s Institute of Global Health Innovation (IGHI), and was sponsored by EY. The survey comprises of more than 2,000 global HHS professionals – from India, Australia, Italy, UAE, the UK and the US. 359 respondents were from India.

The research passed through the phase when Covid related disruptions was about to put HHS providers through the most extreme stress test in living memory. ‘While the outbreak was catastrophic in its effects, it presented the researchers with an exceptional opportunity to study the sector’s behavior during a pivotal moment,’ the paper noted.

From this perspective, today’s article will explore, from various different sources, across the world, how Covid-triggered rapid development and adoption of digital solutions are in the process of making a paradigm shift in the healthcare space. It spans across – health care service providers, its users, and practitioners – including pharma industry and the tech-solution developers.

Consequently, the question arises, would healthcare industry’s innovative spirit of 2020 is robust enough for taking a quantum leap in this space, as we move on. That space will span across – conceptualization and development of new health care products and services, alongside their consumption pattern and consumer behavioral dynamics. And, right up to the adoption of cutting-edge digital technology for commensurate delivery mechanisms. Let me start with some key findings in this area from the above report.

Some key findings – Global and India:

The findings of the Report titled, ‘Embracing digital: is COVID-19 the catalyst for lasting change?’ published on January 13, 2021, ferreted out some interesting facts, with details. These encompass both global and Indian scenario, in this area.

Some key findings – Global:

  • Pre-pandemic – just 18% of HHS providers had managed to embed digital tools in the way they work – mostly, due to lack of funds, regulatory restrictions, and risk aversion. However, the pandemic outbreak swept away many of these barriers, as 62% of organizations have now started using digital technologies and data solutions, globally.
  • 48% organizations are planning to continue investing in technology during the next three years, with 33% expecting more than 50%, and 19% more than 100% increase in investment.
  • While phone consultations are being offered by 81 % of HHS organizations (up from 39 % before the pandemic), 71 % of organizations offering video consultations (up from 22 % before the pandemic).
  • Respondents’ top objectives for future investment towards rapid adoption of digital solutionsinclude, transforming ways of working and service delivery, improving quality of care, reducing the administrative load, enabling better communications, and streamlining work processes.
  • However, 47% of respondents think, the introduction of digital and data solutions was a temporary measure to address challenges during the pandemic.

Some key findings – India:

The Covid-19 pandemic triggered fast acceleration of the adoption of digital technologies by the HHS in India, as well.

  • 51% of respondents from India reported that their respective organizations have increased the use of digital technologies and data solutions since the Covid-19 outbreak.
  • Increased staff productivity reported for 74 % of respondents’ organizations with 75% reporting that digital solutions have been effective in delivering better outcomes for patients and service users.
  • Remote consultations, such as, phone and video consultations have witnessed a greater increase in India than the global average. 86 % of Indian organizations are now offering phone consultation (up from 48 % before pandemic) and 83 % for video consultations (up from 33 % before pandemic).
  • Around three fourth of the respondents in India reported positive experiences with digital technologies and data solutions with the number of people using online consultations in India recording a threefold increase.

This encouraging trend and pattern needs to be consolidated, analyzed, and leveraged – for sharper actionable insights for the development of more contemporary products and services to delight the pharma and health care stakeholders.

A key missing link in India:

The digital health transformation of India’s healthcare system during Covid pandemic was also captured in another article, published by Elsevier Connect on February 23, 2021. It reiterated, although the pandemic has made an overall detrimental impact impacted on India, ‘it has brought about an avalanche of positive changes, including the adoption of digital health technologies and significant changes to the way care is delivered.’ Looking ahead, ‘With the launch of national public health initiatives, India has an incredible opportunity to become a digital health leader,’ the paper predicted.

However, the author also pointed out, unambiguously, that the health care crisis caused by the pandemic has also brought to the fore a key missing link – the need for updated and near real-time availability of trusted information. This observation is more relevant now than ever before, especially considering India’s National Digital Health Mission (NDHM).

National Digital Health Mission – a new ambition:

While addressing the nation on August 15, 2020, Prime Minister Narendra Modi announced the National Digital Health Mission of India. He said in his speech, “From today, the national digital health mission will begin. It will revolutionize the Indian healthcare sector. Every Indian will be issued a health ID that will act like a healthcare account, storing details of all the tests done, existing diseases, diagnoses, medicines prescribed.”

The objectives of the mission are to establish a core digital health database, creating a system of Electronic Health Records (EHR) based on international standards, establish data ownership pathways, so that patients become the owner of their health records, and promoting health data analytics and medical research. This initiative by any standard, is expected to be a game changer, as and when it comes to fruition.

Subsequently, on June 25, 2020, the Union Ministry of Health, reportedly, wrote to the principal secretaries (health) of all states and union territories, asking them to extend full support to the NHA to create four registries — doctors, health infrastructure, health IDs and personal health records of patients. It also instructed the states to send the required details within the stipulated timeline without breaching the norms of data privacy.

Need to avoid any possible missing link in the NDHM:

However, the Harvard Business Review article, published on June 12, 2020, asserted that the emergence of the COVID-19 pandemic not only presented a “mind-boggling array of challenges” exposed the limitations of the electronic health record (EHR) in helping physicians deliver care, especially in the United States.

It suggested: transformation of the EHR from an emphasis on a ‘person’s medical record’ – to an emphasis on their ‘plan for health’ and from a focus on ‘supporting clinical transactions’ to a focus on ‘delivering information’ to the provider and the patient, will be more meaningful.

Thus, it’s time for a new kind of EHR system in today’s perspective, as suggested by the HBR article, besides other domain experts. I am sure, competent authorities will take note of this transformation required in EHR initiatives to avoid any missing link in the new digital healthcare space in India.

As the above Elsevier Connect paper also observed, with the launch of national public health initiatives, such as, Ayushman Bharat and National Digital Health Mission (NDHM), India harbors an incredible opportunity to showcase its world class digital health ecosystem for all in the country.

To help fructify these projects, all key stakeholders – health care service providers, its users, and practitioners – including the pharma industry and the tech solution companies, need to get intimately involved with a common agenda in place. Falling behind may invite regrets, later.

Nonetheless, well before that – the common missing links in India - near real-time availability of credible data, trusted and verified information for adopting digital health for patients that will need to be provided by clinicians in a seamless manner, should be carefully identified and addressed.

New steps into digital healthcare are on the way:

Several new steps into digital healthcare have been taken in various countries of the world. One such initiative is ‘Internet Hospitals.’ These are basically an internet-medical-platform combining online and offline access for medical institutions to provide a variety of telehealth services directly to patients.

A Deloitte paper – ‘Internet Hospitals in China: The new step into digital healthcare,’ published on March 16, 2021 says: ‘Online hospitals are typically offshoots of offline medical organizations. The combination of Internet with health care will drive the medical industry’s transformation into a health service provider from a health care supplier, distributing resources equally and enhancing efficiency,’ moving ‘towards future smart health care.’

Conclusion:

Covid-19 has created a new focus on the digital health ecosystem in India, for accelerating the use of digital technology to radically advance health care systems and save lives. Today, many are experiencing that, big data, analytics, artificial intelligence, remote learning, and data inter-connectivity, can make a real difference to the work of HHS professionals in India.

Embracing digital with accelerated speed during the pandemic, has reportedly started making a significant positive impact on the cycle of the patient’s clinical assessment, treatment, and monitoring. With increasing use, it would reduce the cost of health care, improve patient access to affordable treatment and care services, when many patients’ journey for disease treatment will start online, and get directed to the optimal care setting either physically or virtually.

The article on health-tech, published in the Fortune India on February 20, 2021, has aptly concluded: ‘Eventually health technology infusion in the Indian healthcare ecosystem will be the route to enhance patient-centric healthcare accessibility, affordability, and sustainability. The advent of 5G technology in the country is poised to further catalyze this momentum.’ This, in turn, will facilitate ushering in more game changing steps into digital healthcare, creating a new ecosystem, greater awareness and a keen desire to remain healthy for all.

Thus, from the GIGO perspective, as defined by the Cambridge Dictionary, I reckon, in pharma’s digital initiatives, especially in India, a key factor needs to be carefully addressed. This is – fathoming existence of any missing link involving near real-time availability of trusted information and credible data generation, which could indeed be a great spoiler of any painstaking digital adoption project.

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.

 

 

‘Diversity And Inclusion’: A Missing Link For Indian Pharma

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Inadequate access to affordable health care to a vast majority of the population has been a favorite topic of debate, since long, globally. This discourse is generally centered around the least developed and the developing world, such as India. However, in the recent time, the reverberations of the same can be heard even from the most developed countries, like the United States.

Possible solutions in this area generally encompass several tangible issues, e.g. high cost of drugs and care, alleged unethical practices of the providers, infrastructure bottlenecks – to name a few. Curiously, despite the availability of an increasing number of innovative drugs, state of the art facilities and diagnostics, brilliant healthcare professionals and so on, disparities in the degree of access to all these, between different members of the civil society, keep steadily mounting.

This cascading socioeconomic issue, creating a widening the trust deficit, especially on pharma, throws a critical management challenge for long term sustainability of business, if not survival too.

Transformation to a customer-oriented, profit-making organization:

Building a profit-making organization is not an easy task. However, transforming a profit-making organization to a profit making through customer-centric policies, is several times more challenging. That’s because, making a true external customer-centric organization gets kick started from a significant cultural change within the organization. Systematically creating a pool of requisite internal customers (employees), with diverse background, experience, gender, belief, perspective, talent and, more importantly, ably supported by the organizational vision of inclusion, forms the nerve center of this transformative process. No doubt, why the quality of ‘Diversity and Inclusion (DI)’ culture of an organization is assuming the importance of a differential success factor in business excellence.

The August 25, 2016 E&Y article, titled “Embracing customer experience in the pharmaceutical industry” epitomizes its relevance by articulating: “It is the companies that focus on continuously delivering a better customer experience to build a trusted and transparent relationship over time that will win in the market. They will not only acquire customers that will remain loyal, but also win advocates that will refer the company or brand to more customers.”

The missing link:

It is now being widely established that creating a culture of ‘Diversity and Inclusion (DI)’ across the organization, is of critical importance to maintain sustainable business excellence, with a win-win outcome. Going a step forward, I reckon, although, this is an arduous task for any organization, but an essential one – even for long-term survival of a business. However, today, the very concept of DI is apparently a ‘missing link’ in the chain of sustainable organizational-building initiatives, particularly for most Indian pharma companies.

The role of DI in making a customer-centric business:

Health care customers, like many others, are generally of diverse backgrounds, financial status, ethnicity, gender, health care needs, expectations, and also in their overall perspective. Thus, to make a customer-centric organization for greater market success, and drive product and service innovation accordingly, pharma companies need to deeply understand them, empathetically. A competent pool of well-selected employees with diverse backgrounds, race, ethnicity, gender, perspectives, could facilitate this process, more effectively. However, the company should also create an environment and culture of inclusion for all to listen to each other’s well-reasoned views – expressed uninhibited and fearlessly for this purpose.

In making this process more effective to add a huge tangible and intangible worth to the business, pharma players need to untether the employee potential through empowerment, making them feel valued and grow. This would also help immensely in charting newer pathways of all-round success in many other high-voltage complexities of pharma business.

‘Why diversity matters’?

That diversity within an organization matters in several ways, has been established in several studies. For example, the February 2015 article, titled “Why diversity matters”, of McKinsey & Company says, “More diverse companies are better able to win top talent, and improve their customer orientation, employee satisfaction, and decision making, leading to a virtuous cycle of increasing returns.” The analysis found a statistically significant relationship between a more diverse leadership team and better financial performance (measured as average EBIT 2010–2013).

Why is inclusion so important?

In a large number of organizations that include Indian pharma, senior management staffs generally seem to appreciate hearing more of what they want to hear. This culture quickly percolates top-down – encompassing the entire company, probably with a few exceptions. Personal ‘likes’ and ‘dislikes’ of various nature and degree spread wings within many organizations. Such a situation is created from intrinsic apathy to patiently listen to and accept another employee’s viewpoint – even on critical customer-centric issues. Employees, in that process, also get branded as ‘argumentative’ and often ‘disloyal’, if not a ‘socialist’. The major decisions often get biased accordingly – sometimes unknowingly.

Whereas, inclusion entails empowerment and close involvement of a diverse pool of employees with dignity, by recognizing their intrinsic worth and value. Moving towards a culture of inclusion would require creation of an organizational desire to communicate professionally and learn how to listen to each other’s well-thought-through arguments with interest.

The business should accept that it is not really important in getting along with everybody on all issues – every time. Neither, does it make sense for professionals to develop personal ‘likes’ or ‘dislikes’ on other fellow colleagues, based on issue-based differences, while finding out ways and means to improve organizational performance, image or reputation. Inclusion helps employees to learn to work closely, despite personal differences on all important issues.

Has Global pharma industry started imbibing DI?

Yes, many global pharma majors, such as, GSK, Novartis and Merck and several others, have started practicing DI as a way of organizational life and culture. Some of them like GSK India has put it on its country website. But, generally in India, the scenario is not quite similar. Though, many head honchos in the country talk about DI, the February 16, 2017 edition of Bloomberg/Quint carried a headline “Most Indian Companies Do Not Value Diversity At Board-Level Hirings,” quoting Oxfam India.

A voluntary survey of ‘company diversity’ conducted by US-based DiversityInc at Princeton, ranks the companies on four key areas of diversity management: talent pipeline, equitable talent development, CEO/leadership commitment, and supplier diversity. It revealed an interesting fact in its 2016 study. The survey reported, while diversity continues to improve in the overall perspective, its ‘Pharma 50’, as a group, ‘is right in the middle of the industry pack when benchmarked against the Fortune 500.’  The survey also brought to light significant differences in the levels of gender, national, and ethnic diversity even at the company boards and executive committees of individual companies. Nonetheless, some global pharma entities are taking significant steps in this direction. But, these are still early days in many organizations.

Conclusion:

The E&Y article quoted above, also says that pharma “customers are becoming resistant to push sales and marketing, and are instead preferring to relate to the overall experience provided in their pull interactions with the company. The customer experience will be the next battleground for the pharmaceutical industry. The deployment of a customer experience capability is a transformational journey in often unchartered territories. The key to success is to start early and drive a process that is both rigorous and iterative, allowing the organization – and its customers – to learn along the way and always to be ready with the next best action in place.” DI, I reckon, plays a critical role in attaining this goal.

Pharma companies are also realizing that building a profit-making organization with blockbuster high-priced, high-profit making molecules, such as Sovaldi is possible, but this may not be sustainable. It isn’t an easy task either, not anymore. There lies the urgency of transforming a profit-making organization to a profit making through customer-centric business entity. This process, I repeat, is several times more challenging, but the business success is much more sustainable.

Organizational transformation of this nature is prompting the global pharma majors to use Diversity and Inclusion (D&I) while achieving their key financial and people goals. Both D (Diversity) and I (inclusion) work in tandem for taking any fairness-based organizational decisions, irrespective of whether it’s staff or customer decision.

DI has the potential to help an organization to create and chart new and more productive pathways almost in all functions within the company – right from R&D, communication, service delivery to market access. In all these initiatives, customer focus to occupy the center stage – for a win-win outcome – significantly reducing the degree of difficulty for access to affordable medicines. DI is not a panacea to mitigate this problem totally, but would help significantly, nonetheless – with the help of employees with diverse background but having fresh eyes. Many global pharma majors have initiated action in this direction. However, in Indian pharma business generally, DI still remains a missing link, as it is seen today.

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.

Beyond ‘The Magic Moment’ of New Drug Marketing Approval

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“Uncontrolled clinical trials are causing havoc to human life. There are so many legal and ethical issues involved with clinical trials and the government has not done anything so far.”

This is exactly what the Supreme Court of India observed while responding to a Public Interest Litigation (PIL) on the subject in January 2013.

While Indian regulators with the active intervention of the Supreme Court are trying to grapple with, besides others, the basic ‘human rights’ aspect of the Clinical Trial (CT), many countries in different parts of the world are moving much ahead at a brisker pace. They have started thinking and putting in place more patient centric newer drug approval systems and also, in tandem, hastening the process of bringing new drugs to the market.

Current general scenario in CT:

Currently, after pre-clinical studies and before applying for regulatory approval, a new drug has to be tested on volunteers in randomized studies to prove its efficacy and safety on patients. Relatively short duration of new drug trials can hardly establish long-term safety and efficacy, which are now arrived at through extrapolation of data collected during CT period.

It is worth noting, the overall situation changes dramatically after launch of these products, as their usage expands from a relatively smaller number of CT volunteers to millions of real-world patients.

In a situation like this, unrealistic expectation of patients’ safety in perpetuity based primarily on extrapolation of very limited CT data is being increasingly questioned today.

That is why, on going post-marketing surveillance, which is also known as a Phase IV CT, is considered as a much more effective process to gauge relative superiority of the drug against the existing ones in terms of both efficacy and safety on a longer term.

That said, today one reads and hears umpteen number of accusations for almost lack of any meaningful response on the part of the pharmaceutical companies, in general, towards revelations of post-marketing surveillance data. This could, in turn, expose the patients to various types of risks, including wasteful healthcare expenditure.

The ‘Magic Moment’ in the present regulatory process:

A recent paper highlights a single “Magic Moment” between pre and post-licensing processes in the current drug-approval model in many countries. In this system, the use of a drug is tightly controlled in a narrowly defined pre-licensing population. Thus, CTs are also conducted on such pre-defined and relatively homogeneous volunteers, who are generally free from complicating conditions.

However, after ‘The Magic Moment’ of marketing approval, a large number of heterogeneous patient population, with many of them on multiple therapy, also use these new products in uncontrolled settings. Situations as these had led to post-marketing major drug withdrawals like, Vioxx and Avandia due to patients’ safety.

These grave concerns have led to a strategic shift in the drug regulatory approval scenario throwing open new ideas in the drug approval process.

Adaptive Licensing:

To find the right answer to this vexing issue the drug regulators in many countries are  reportedly seriously contemplating to imbibe a process that will continuously help analyzing information through ongoing post-marketing surveillance data. Continuous medical data analysis like this will enable the regulators to modify their earlier decisions on marketing approval and also medical reimbursements related to pricing reasons.

This new process is called ‘Adaptive Licensing (AL)’, which is expected to benefit the overall healthcare system, by not allowing medical reimbursement of treatments with those drugs, which will provide negligible benefit over existing low cost therapies.

Difference between current mechanism and AL:

According to a ‘Health Canada’ paper titled, “The Path to Adaptive Drug Regulation”, the difference between the two is as follows:

Current system:

As explained above, post-licensing i.e. after ‘The Magic Moment’ of regulatory approval, treatment population grows rapidly and treatment experiences do not contribute to evidence generation.

Adaptive Licensing:

After initial license, treated patients grow more slowly due to regulatory restrictions. Patient experience is captured to contribute to real-world information. The marketing license is also modified accordingly from time to time.

Most desirable for many drugs:

Experts in this field opine that AL will help bringing in alignment of all required processes so important for a new drug seen from patients’ perspective like, R&D, regulatory approval and market access with the active involvement of all stakeholders like, the pharmaceutical companies, the drug regulator, payors/insurance companies and also the researchers.

In the AL system, a transparent drug development process will provide enough data on risk-benefit profile of the concerned drug to satisfy the drug regulator for its quick marketing authorization on pre-determined types of patients.

Such approval will follow real-life monitoring of efficacy and safety for modification of the drug license accordingly, wherever and whenever required.

Thus, AL is expected to strike a right balance balance between timely access to new drugs for the patients and the need to evaluate real time evolving information on safety and efficacy leading to a well-informed patient centric decisions by the drug regulators.

A continuous regulatory evaluation and decision-making process:

AL intends to evaluate a drug through its entire life span.  It has been reported that during this long period, clinical and other data will “Continue to be generated on the product through various modalities, including active surveillance and additional studies after initial and full licensing. The artificial dichotomy of pre vs. post licensing stages (‘The Magic Moment’) will be replaced by graded, more tightly managed, but more timely and potentially more cost-effective market entry and market stability.”

Not necessary for all drugs in the near term:

It is worth noting that AL system may not perhaps be required for all pharmaceutical or biologic products and will not totally replace the current system of drug licensing process, at least in the near term.

AL process may immediately be followed only for those products with a favorable risk-benefit drug profile as demonstrated in the initial data and there is a robust reason for early market entry of this drug to meet unmet needs, simultaneously with ongoing studies.

The ‘Magic Moment’ freezes in India…in perpetuity:

As per the Drugs and Cosmetics Act of India, after obtaining drug marketing approval from the regulators, concerned pharmaceutical companies are required to follow the pharmacovigilance system in the country to own the responsibility and liability of the drugs as enunciated in the Schedule Y of the Act. Unfortunately, this is hardly being followed in India, ignoring patients’ safety blatantly.

With the plea that most products launched in India are already being marketed in many developed markets of the world, the concerned companies prefer to depend on clinical experiences in those markets. This attitude totally bypasses the regulatory requirement to follow a robust pharmacovigilance system in India. Indian drug regulators also do not seem to be much concerned about this important patients’ safety related requirements, very surprisingly not even for biosimilar drugs.

However, the current ground realities are quite different. As we witness today, there does not seem to be much difference in time between international and India launch of innovative products. Thus, the argument of gaining medium to long-term experience on safety and efficacy from international data related to these drugs, does not seem to hold any water at all.

On the contrary, some drugs withdrawn from the international markets on safety grounds are still available in India, despite ire and severe indictment even from the Indian Parliamentary Standing Committee.

In a situation like this, AL process of Marketing approval for selected newer and innovative drugs may be considered by the Indian Drug Regulators, just not to be more patient centric, but also to help evaluating  pricing decisions of innovative drugs failing to demonstrate significantly better treatment outcomes as compared to the existing ones.

A recent example of AL:

One of the latest drugs, which reportedly will undergo such regulatory scrutiny of USFDA is Tacfidera (dimethyl fumarate) used for the treatment of multiple sclerosis, approved in April 2013 and costing US$ 54,900 per patient per year.  Interestingly, Tacfidera, before the drug can find itself on a formulary, will need to demonstrate its effectiveness in the real world.

The report indicates, “the first six months after a drug launch are always about educating payers about its benefits, and while most large payers are likely to make a decision to reimburse the drug in the next twelve months, data collection will continue and changes in policies might be made at a later date.”

Thus, in the years ahead, whether a new drug will become a blockbuster or not will very largely be decided by the ongoing real world data. If the promise of a drug diminishes at any point of time through clinical data, it will certainly going to have consequential financial and other adverse impacts.

Another interesting recent development:

Under new pharmacovigilance legislation in Europe, the European Medicines Agency has reportedly announced the list of over 100 drugs that soon will bear the “black triangle” logo. This initiative is directed to encourage both the doctors and patients to report side effects to enable close monitoring of drug safety.

Criteria to include drugs under additional monitoring are:

  • Medicines authorized after January 1, 2011 that contain a new active substance.
  • Biologics for which there is limited post-marketing experience.
  • Medicines with a conditional approval or approved under exceptional circumstances.
  • Medicines for which the marketing-authorization holder is required to carry out a post-authorization safety study (PASS).
  • Other medicines can also be placed under additional monitoring, based on a recommendation from the European Medicines Agency’s Pharmacovigilance Risk Assessment Committee (PRAC).

Conclusion:

Global regulatory experts do believe that in the concept of AL, there are still some loose knots to be tightened expeditiously to make it a fully implementable common drug marketing authorization process.  Appropriate pilot projects need to be undertaken in this area to establish beyond any doubt that AL will be decisively more preferable to the current regulatory process.

As and when AL will become the preferred drug-licensing pathway across the world, it is expected to offer greater real benefits of new drug development to the patients for their optimal use at an affordable price.

That said, some other experts do opine as follows:

“No matter how fast the authorization process operates, the merits of innovation will not be felt until they reach patients. And the barrier between authorization and patient access remains, in most of Europe, the issue of reimbursement.”

While all these are fast developing in the global CT scenario, in the jangle of Clinical Trials‘ in India, ‘Adaptive Licensing’ has still remained a critical missing ingredient even to encourage a wider debate.

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.

Missing the woods for the trees – Yet another golden opportunity to rewrite the Drug Policy of India

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Long overdue the new ‘Drug Policy’ of India, since a long while, has been languishing as the ‘prisoner of indecision’ of the policy makers, while the outdated ‘1995 Drug Policy’ continues to remain operational since over a decade and half, by now.

The need for putting a new, robust, comprehensive, holistic  and reform oriented ‘Drug Policy’ in place, sooner, is absolutely critical for the fast evolving pharmaceutical industry of India.
The ‘Drug Policy 1986’ clearly enunciated the basic policy objectives relating to drugs and pharmaceuticals in India, as follows:-

  • Ensuring abundant availability of medicines at reasonable price and quality for mass consumption.
  • Strengthening the domestic capability for cost effective, quality production and exports of pharmaceuticals by reducing barriers to trade in the pharmaceutical sector.
  • Strengthening the system of quality control over drug and pharmaceutical production and distribution.
  • Encouraging R&D in the pharmaceutical industry in a manner compatible with the country’s needs and with particular focus on diseases endemic or relevant to India by creating an conducive environment.
  • Creating an incentive framework for the pharmaceutical and drug industry which promotes new investment into pharmaceutical industry and encourages the introduction of new technologies and new drugs.

After having completed around 25 years since then, it is high time for the government to ponder and assess whether the successive drug policies have delivered to the nation the desirable outcome, as enunciated above.
‘Missing the woods for the trees’:

The overall objective of the ‘Drug Policy’ is indeed to help accelerating the all-round inclusive growth of the Indian pharmaceutical industry to make it a force to reckon with in the global pharmaceutical arena. At the same time, the policy should help creating an appropriate ecosystem to improve access to quality medicines at an affordable price to the entire population of the nation.

Just one pronged approach of drug price control mechanism for drugs and pharmaceuticals is in no way can be considered as a holistic approach to achieve the set objectives. Isolated initiative of price regulation could at best be treated as just one such important measures, out of very many, at the very best. This initiative may justifiably be construed as ‘missing the woods for the trees’.

Financial cover towards medical expenses for all, is very important: 

One of the major issues in the healthcare space of the country is high out of pocket expenses by majority of the population. Financial protection against medical expenditures is far from universal in India with around 15% of the population having some sort of medical financial cover.

January 11, 2011 edition of ‘The Lancet’ in its article titled, “Financing health care for all: challenges and opportunities” commented as follows:

“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.”

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

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)

Food prices impact health more than medicine costs:

Year

Pharma Price Increases

Food Inflation

2008

1.1%

5.6%

2009

1.3%

8.0%

2010

0.5%

14.4%

Source: CMIE

The key affordability issue still remains unresolved: 

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 of assets.

Around 35% of Indian population can’t afford to spend on medicines:

While framing the ‘Drug Policy’, the government should keep in mind that a population of around 35% in India, still lives below the poverty line (BPL) and will not be able to afford any expenditure towards medicines.

Adding more drugs in the list of essential medicines and even bringing them all under stringent price control will not help the country to resolve this critical issue.

Successive ‘Drug Policies’ of India focused on affordability and access just through ‘price control’:

There is no ‘One Size Fits All’ type of definition for affordability of medicines, just like any other essential commodities, especially when around 80% of healthcare expenditure is ‘out of pocket’ in India.  Any price point, thus, may be affordable to some and unaffordable to some others.

The initiatives taken by the government in the successive drug policies, since the last four decades, have certainly been able to make the drug prices in India one of the lowest in the world.

However, very unfortunately, despite such price control, even today, 47% and 31% of hospitalization in rural and urban areas, respectively, are financed by private loans and selling of assets by individuals, as stated earlier. 

Multi-dimensional approach to improve access to healthcare and affordable medicines:

Access to healthcare and affordable medicines can be improved through an integrated and comprehensive approach of better access to doctors, diagnostics and hospitals, along with price monitoring mechanism for each component of healthcare cost, including medicines.

Healthcare infrastructure in India is now constrained by a lack of trained healthcare professionals, limited access to diagnostics and treatment and availability of quality medicines. Moreover, while around 80% of Indians pay out of pocket for healthcare, the Government of India spends less than 1% of GDP on health.

Consequently, the supply of healthcare services falls significantly short of demand. The current figure of 9 beds per 10,000 in India is far from the world average of 40 beds per 10,000 people. Similarly, for every 10,000 Indians, there are just 6 doctors available in the country, while China has 20 doctors for the same number of Chinese population.

Access to affordable medicines still remains a key challenge for the ‘Drug Policy’ makers:

Over 46% of patients in India travel beyond 100 km. to seek medical care.

(Source: Technopak & Philips (2010) Accessible Healthcare: Joining the Dots Now, New Delhi).

Many places in rural India, lack of availability of good quality medicines such as antibiotics poses even a greater challenge than their affordability. The national immunization program provides 6 vaccines free of cost, yet just around 60% of the country’s population is covered by it. The National AIDS Control Organization (NACO) provides free ARV (Anti-Retroviral) treatment to the poor, yet the drugs do not reach more than 10% of those in need of the same.

Without proper equipment and doctors to diagnose and treat patients, medicines are of little value to those who need them most.  Drug price regulation alone, though important, cannot increase access to healthcare without creation of adequate infrastructure required to ensure effective delivery and administration of the medicines, together with appropriate financial cover for health.

The Government won’t be able to do it all alone:

The Government needs to partner with the private sector to address India’s acute healthcare challenges through Public-Private-Partnership (PPPs) initiatives.

Recent examples of successful PPPs in the health sector include outsourcing ambulance services, mobile medical units, diagnostics and urban health centers in several states to private NGOs, hospitals and clinics.  PPPs in India should adequately cover primary and specialty healthcare, including clinical and diagnostic services, insurance, e-healthcare, hospitals and medical equipment.

A golden opportunity for a new beginning:

Many of us may know that the modified Drug Policy of 2002 was challenged under a Public Interest Litigation (PIL) in the Karnataka High Court in the same year. The honorable High Court in its order had directed the Central Government to consider and formulate appropriate criteria to ensure that the essential and lifesaving drugs do not fall out of price control. The court, at that time, also directed the Government to review the drugs which are essential and lifesaving in nature.

The above matter came up before the honorable Supreme Court of India on March 31, 2011, when the Union of India made a statement that the Central Government has not implemented and is not going to implement the 2002 Policy and a new Drug Policy is being framed.

In view of the submissions made on behalf of Government of India, the appeal was disposed of as infructuous by the Supreme Court of India.

Expectations from the ‘New Drug Policy’:

In view of the above and especially when a new Drug Policy is being worked out, adequate and immediate policy measures, with an absolutely fresh look, are essential to address the root cause of the country’s failure to ‘Improve Access to Quality Medicines at Affordable Prices’ to ensure ‘Health for all’.

The Government has already signaled increasing allocation of resources towards the health sector by doubling the funding available for the National Rural Health Mission (NRHM) along with plans to extend ‘Rashtriya Swasthya Bima Yojna (RSBY)’ scheme to provide out-patient coverage to low income groups.

As has been demonstrated by many countries of the world, healthcare financing offers an enduring mechanism for reducing the out-of-pocket expenses of the poor and improve access to healthcare. Government and the private sector need to pool resources to expand health insurance coverage initially to at least 40% of the population who are below the poverty line. Positive developments are being reported in this area, as well, albeit slowly.

Allocating resources from national welfare schemes towards health insurance coverage is a step in the right direction.  For example, a portion of the MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) funds could be spent on health insurance premia for labors engaged in such work.

Thus to achieve the objective of ‘Improving Access to Quality Medicines at Affordable Prices’, there is a pressing need for the policy makers to put in place a robust healthcare financing model for all strata of the society, sooner than later. This initiative will significantly reduce high overall ‘out of pocket expenses’ towards healthcare in India by the common man.

Encourage healthy competition among healthcare providers:

Simultaneously, by encouraging tough competition within healthcare providers, like health insurance companies, all elements of healthcare expenditure like physicians’ fees, diagnostic tests, hospital beds, medicines etc. will be kept under tight leash by themselves, just to be more cost-effective in their businesses along with ensured patients’ satisfaction.

In such a competitive environment, the patients will be the net gainers, as we have seen in other knowledge based industries, like in the telecom sector with incredible increase in teledensity within the country.

Effective penetration of various types of innovative health insurance schemes will thus be one of the key growth drivers not only for the Indian pharmaceutical industry, but also for its inclusive growth, as desired by many in India.

The policy should also include an equally transparent system to ensure that errant players within the healthcare sector, who will be caught with profiteering motives, under any garb, at the cost of precious lives of the ailing patients, are brought to justice with exemplary punishments, as will be defined by law.

Conclusion:

I have no doubt that the presence of an effective drug price regulator in the country is absolutely necessary to keep a careful vigil on the drug prices.

At the same time one should realize that the good old routine approach in formulating the long overdue ‘New Drug Policy’, even if it includes all drugs featuring in the ‘National List of Essential Medicines (NLEM)’, would not suffice anymore to ‘improve access to quality medicines at an affordable price’ to the common man.

The real answer to affordable healthcare in India, including medicines, unlike the developed countries of the world, lies in the expertise of the policy makers in innovatively addressing the vexing issue of  ‘around 80% out of pocket expenses towards healthcare’ by the ordinary citizens of the country.

This factor itself, in case of just one or couple of serious illnesses, could make a middle class household in India poor and a poor could be pushed even Below the Poverty Line (BPL).

Inadequate access to modern medicines in India, after 40 years of stringent drug price control and despite essential medicines being available in the country at the lowest price even as compared to Sri Lanka, Pakistan, Bangladesh and Nepal, will vindicate this critical point.

However, ‘The Economic Times’ dated May 23, 2011 has reported yet again, quoting Shri Srikant Jena, the Minister of State for Chemicals and Fertilizers, who oversees the pharmaceutical sector, that the Government ‘is putting together a host of policy changes to reduce the cost of medicines’.

This time around, let us sincerely hope that the drug policy makers do not repeat the same old folly of ‘missing the woods for the trees’.

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.

Making quality medicines available at an affordable price – Are we ‘missing woods for the trees’?

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On August 4, 2010 the Parliamentary standing committee for Health and Family Welfare in its 45th report, recommended the following to the ‘Rajya Sabha’ of the Parliament of India for ‘Making quality medicines available at an affordable price’ to the common man:

1. Blanket caps on the profit margins of all medicines across the board, as these are the ‘only items’ where the purchasing decision is taken by a doctor – a third party and not by the patients who will actually pay for such medicines. In such a situation, a possible’ unholy nexus’ between the prescribing doctors and the pharmaceutical companies could put the patients at a disadvantage and in a helpless situation.

2. This blanket cap on profit for ALL drugs will discourage pharmaceutical companies to shift the balance of their product portfolio from schedule (price control) to non-schedule (outside price control) formulations.

3. This action will make the administration of the ‘Price Control’ mechanism by the Government much simpler by eliminating the current practice of price monitoring and the government preference of substitution of generic drugs for the branded pharmaceuticals

4. MRP of ALL medicines should be determined by the NPPA based on an open and transparent process and considering interests of all stake holders, as is currently being followed in other areas like, electricity tariff, bus, auto rickshaw and taxi fares, insurance premiums and various interest rates.

5. The Department of Health and Family Welfare and the Department of Pharmaceuticals should work out a system through the Inter-Ministerial Coordination Committee to put a blanket cap on profit margins of ALL drugs across the board, immediately.

6. Despite amendment of the MCI guidelines for the doctors in December 2009, banning the acceptance of all kinds of gifts, trips to foreign destinations and availing various types of hospitality by them from the pharmaceutical companies, nothing much has changed on the ground related to such ’unethical practices’. Since MCI has no jurisdiction over the pharmaceutical companies, the government should formulate similar punitive steps through the DCGI, CBDT etc. against the erring pharmaceutical companies.

7. The Committee indicated that it desires to be kept apprised of the action taken in this regard by the Government.

The key factors influencing affordability of medicines:

All the above steps will remain as good intent by the policy makers, if the issue of access to medicines is not addressed simultaneously. As we know that affordability will have no meaning, if one does not have even access to medicines.

In my view, there are five key factors, which could ensure smooth access to medicines to the common man across the country; affordable price being just one of these factors:

1. A robust healthcare infrastructure
2. Affordable healthcare costs including pharmaceuticals
3. Rational selection and usage of drugs by all concerned
4. Availability of healthcare financing system like, health insurance
5. Efficient logistics and supply chain support throughout the country

High out of pocket expenditure could push a section of population below the poverty line:

In India ‘out of pocket expenditure’ as a percentage of total healthcare expenses is around 80%, being one of the highest in the world.

A study by the World Bank conducted in May 2001 titled, “India – Raising the Sights: Better Health Systems for India’s Poor” indicates that out-of-pocket medical costs alone may push 2.2% of the population below the poverty line in one year.

‘Missing woods for the trees’?

Affordability is indeed a relative yardstick. What is affordable to an average middle class population may not be affordable to the rest of the population even above the poverty line. Similarly, below the poverty line population may not be able to afford perhaps any cost towards medicines. In a situation like this, putting a blanket profit cap on all medicines will not be just enough. There is a crying need to put in place an appropriate healthcare financing model by the policy makers, covering all sections of the society. Are we then ‘missing woods for the trees’?

Create a robust healthcare provider group through Public Private Partnership (PPP) initiatives to offer quality healthcare at an affordable price:

To resolve the issue of affordability of healthcare in general including medicines, the policy makers should take immediate steps to put in place the ‘Healthcare Financing’ initiatives through a robust PPP model in the country. A highly competitive ‘Health Insurance’ sector, created through PPP, could emerge as a powerful and key healthcare provider in the country. The power that such stakeholders will then assume in deciding for their respective clientele, types of doctors, hospitals, diagnostic labs and even what types of medicines that will be dispensed to them to offer quality healthcare at an affordable price, could indeed be a game changer having an immense influence in bringing the cost of overall healthcare for the common man, including medicines, very significantly.

The ‘Health Insurance’ companies can then decide through the Third Party Administrators (TPA), based on public interest, what types of fees should be charged by the following to offer quality healthcare services at an affordable price to their clientele, if these groups would like to avail the huge business potential for a long period of time:

1. Doctors
2. Hospitals
3. Diagnostic laboratories
4. Other related service providers

For making centralized purchase of medicines, these insurance companies or payors may enter into a hard negotiation with the pharmaceutical companies directly to bring down the price of medicines for the use of their respective clientele.

A recent incident:

To illustrate the above point let me quote an important and related news item, which was published in almost all the leading national daily newspaper, just in the last month.

In July 2010, it was reported that about 18 health insurance companies, who were providing cashless services to the policy holders at over 3,000 hospitals across India, found out that only 350 of them constituting around 11% of the total, were consuming more than 80% of the total claims.

It was also reported that the patients were overcharged by these hospitals for each hospitalization irrespective of the treatment provided and were left with them very little funds for their next treatment. This prompted the said insurance companies to bring some order out of the chaos, as it were.

As a result, at least 150 hospitals only from Delhi and the National Capital region were taken out of their designated list for the cashless facility, keeping the facility available at around 100 hospitals where none belonged to any corporate chain. Similar action was taken against hospitals in other cities, as well.

Thereafter, these insurance companies also decided to convey to the invidual policy holders the fresh list of hospitals for cashless facilities, working out new treatment packages depending on the quality of available healthcare infrastructure of each hospital and a lower or a higher rate was worked out for implementation, accordingly.

This illustration will vindicate how powerful and assertive the health insurance companies could be with the effective use of the TPAs for the sake of public health interest, if they wish to and at the same time to protect their respective bottom lines, creating a win-win situation for all.

Conclusion:

It is indeed an irony that despite being the 4th largest producer of pharmaceuticals and catering to the needs of 20 per cent of the global requirements for the generic medicines, India is still unable to ensure access to modern medicines to around 650 million population of the country (The World Medicine Report, WHO 2004). Like in many other emerging economies of the world, in India too, access to modern medicines along with their affordability, is the key macro healthcare issue of the nation.

In a situation like this, as stated above, when the payors or health insurance companies will start exerting immense performance pressure to all concerned to provide quality healthcare at an affordable price, even the alleged ‘unholy nexus’ between the pharmaceutical companies and the medical profession, perhaps will not have any practical relevance.

It is worth pondering, whether the Government is now sending confusing signals to the civil society at large by propagating ‘non-regulated pricing’ for Petroleum Products and ‘regulated pricing’ for pharmaceutical products?

By Tapan Ray

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