India looks to Artificial Intelligence to solve Health Infra Problems

 In early June, the government think tank Niti Aayog unveiled its discussion paper on national strategy on Artifical Intelligence (AI) which aims to guide research and development in new and emerging technologies. While the paper per se focuses on five sectors for India — healthcare, agriculture, education, smart cities and infrastructure and transportation, this post will focus on healthcare alone.

In the paper, the think tank says India is not leading in healthcare because of issues such as shortage of qualified healthcare professionals and services like doctors, nurses, technicians and infrastructure. There are 0.76 doctors and 2.09 nurses for every 1000 people (as compared to WHO recommendations of 1 doctor and 2.5 nurses per 1,000 people). Hospital infrastructure is creaky and bursting at its seams with 1.3 hospital beds per 1,000 people as compared to the WHO recommendation of 3.5 hospital beds per 1,000 people.

Amazingly, the government believes that AI, and not fixing the inherent problems that are rotting the sector from the inside, can play a major role here. In the backdrop of India’s stretched and limited basic healthcare infrastructure, at one level the strategy for AI is indeed a bit like putting the cart before the horse.

New tech such as AI can often be spoken of to solve problems, but one forgets that tech is only an enabler and is not a substitute. It is only as good as its supportive infrastructure. The “intelligence” in AI basically comes from massive data repositories that the machine gleans information off. Not sure if India has much of that to boast of.

Even in the West where data is meticulously collected, stored securely and analysed, massive deployment of AI has still not happened and is still being tried out. In India which has 66% population in rural areas and 67% of doctors in urban areas, the requirements are still fundamental such as the need for physical hospitals, healthcare professionals and last mile connectivity for drugs and pharmaceuticals.

In a country where people in remote villages are just becoming aware of the magical effects of electricity; where clean drinking water and two meals a day are aspirational, talks of broadband, the internet and AI seem quite out of place.

Like most things that come from govt, these are noble intentions which pave the road to hell.

Over the long term, technology upgrades in the healthcare delivery model can create efficiency especially at the point of care level (in PHCs, clinics, hospitals etc). There are definite areas where the existing burden of care on doctors can be eased. But this has many pre-requisites – from as basic as having physical hospitals and doctors, medical supplies, electricity, and water to advanced things such as cloud-based tech, data privacy and security, trained personnel etc. The starting point would be to collate and build out massive data repositories, do away with silos and get different data collection points to inter-connect.

In a country as large and diverse as ours with a population as immense, this is a colossal project – one that can take years. Paradoxically, we Indians are great at managing scale (as we’ve seen with General Elections, the Kumbh mela and Aadhar enrolments) but are terrible at relatively basic tasks (simple queues, traffic rules and building roads & ensuring health and sanitation). One worries that we might succeed at putting up the technology but forget basic training and infrastructure creation.

If we get all that right, the potential is unlimited in areas such as screening and diagnosis, home healthcare, DIY healthcare for primary health (tend to simple cuts and wounds, treat common colds, aches and pains etc) and making health care participatory (arming patients with enough information for them to understand and participate in treatment).

Lessons can be drawn from tele-medicine (eg: The Sky program launched by World Health Partners in Bihar which didn’t do too well due to lack of participation from both providers as well as the targeted social groups). This of course, doesn’t mean that nothing new will work. It just means that a lot of things have to be in place for this to work.

One shouldn’t fall prey to the fallacy that technology is the panacea to all problems.

A good way to foretell the future is to study the past. And the past in this case doesn’t hold much promise. We have had “digital India” and “make in India” and now we have “solve for India”. The intention is noble, and the premise is strong. However, it doesn’t account for the fact that a very wide and capable ecosystem is necessary for innovators and entrepreneurs to survive. Especially those of the social nature who will dedicate their work to helping out strata of population that will not necessarily have the ability to pay. This will require major govt funding and backing which we haven’t really seen before. Plus, the fact that it takes years for such an ecosystem to thrive and investors have to be patient.

One must but look at China and how Govt invested millions of dollars into building such an ecosystem that is on the verge of catapulting China ahead of the US in terms of innovation. A recent MIT report that compared China and India in the race for dominance in AI, didn’t have very kind words for India.

There is a need to reskill many people in a short span of time. Insufficient research support, poor data quality, and the lack of expertise in the field will be stumbling blocks for India. China has had an early start with a robust digital infrastructure and their unmatched ability to produce PhD-level mathematicians and stem engineers.

The AI game is on. India is playing catch-up with China and the West in terms of technology, research prowess, investment, and most importantly, data, which is the lifeblood of AI.

How India grapples with issues such as water scarcity and poverty alleviation, while daring to believe that AI can change the world will be fascinating to watch. However, it’s important to remember that AI is just a tool, it is not an end.


“Challenge” – Pharma’s middle name

For the Indian pharmaceutical industry, ‘challenge’ has come to be its middle name. While for one part of the industry it is to create newer and better medicines for the diseases of tomorrow, for the rest of it; the challenge is simply to get to that tomorrow.

40 years after India aspired for self-sufficiency in medicines, the Indian pharma industry has emerged as a robust, globally-aligned industry that has witnessed substantial growth. Yet, challenges remain. We tend to think of these challenges as applicable to different sections of the industry i.e. MNCs and domestic companies. In my experience, they more often than not, apply to different parts of the same organization.

Domestic Giants:

  1. Abiding by the UCPMP code – the challenge is to continue growing at the same rate (13-15%) within a strictly ethical business framework. This is made worse by a total lack of co-ordination between the different lobbies representing the industry in India.
  1. Re-establishing credibility– Here the challenge plays out at multiple levels

(i) HCPs – resetting expectations within a new business model

(ii) MSMEs – gaining orders from govt tenders, Jan Aushadi and other public health initiatives.

(iii) Manufacturers looking to enter the lucrative US market after the slew of 483s issued by the FDA

(iv) General public – convincing them that the prices that they pay for medicines are the best possible ones

(v) Public health – convincing the govt and other activist groups that pharma cares enough about society to participate in neglected diseases (eg – Sun Pharma partnership with govt on malaria eradication)

  1. Non-evolving business models – This challenge is common to both domestic and MNC companies albeit in different contexts. For domestic giants, this would involve issues like inability to transcend a transactional model with all stakeholders (docs, pharmacies and patients). This involves incentives to HCPs and rebates to pharmacies and patients. While money is definitely a decision driver, it precludes the opportunity to create meaningful value which is often more appreciated by receivers.


Multi-National Corporations:

  1. Growth through fewer new product introductions – This challenge has recently become applicable to domestic giants as well after the govt action against fixed dose combination products. However, I do not consider this a rate limiting step for companies since they have the option of launching free-dose combinations or the single drugs on their own. Specifically for MNCs, a dry pipeline followed by uncertainty of monopoly in the Indian market (Sec 3(d)) and a threat of capped pricing is a far bigger needle mover in my opinion since MNC business models are copied from the western parent orgs and rarely if ever localized in the true sense. This brings me to the next challenge.
  1. Operating in a Gx market like an IP firm – Following western business models may add to novelty for a while but are rarely sustainable on scale. Dabbling in ‘new financing methods’ or other such may reflect the temporary genius of the MNC marketer but hardly does much for long standing issues of creating true access to innovative medicines or penetrating beyond Tier-3,4 markets. Again, opportunities to create meaningful legacy in a foreign land is all but lost.
  1. Non-evolving business models

(i) In the context of MNCs, this challenge comes from the fact that the parent organizations do not consider the 4Ps very seriously when marketing an innovative product and very few MNCs market generics globally. Therefore, their prescribed business model remains very HCP focused and ignores opportunities to partner with other stakeholders. This despite the fact that there is enough literature to prove the considerable and certain shift in decision making from HCPs to HMOs/insurance payers, pharmacies, patient groups and caregivers.

(ii) MNCs also struggle with making sense of the digital space (one does not see this too much from domestic giants) and make their models very rep-centric. This allows a single channel to be maximized while all but ignoring multiple other channels of direct contact with HCPs and other stakeholders.

(iii) Utilizing alternative (non-rep) channels can be a good way to harness the increasing power of the patients and their caregivers while reducing the appalling asymmetry of information that plagues this industry.

(iv) Unfortunately, with the power of making conversations comes the great responsibility of owning up to mistakes. Not having to do so is a singular pleasure offered by monologues.

Of course, challenges are aplenty and hardly limited to the ones listed above. As the country moves ahead, these challenges, coupled with fierce competitive pressure, could further escalate, if not attended to with crafty strategies by companies keep up with the evolving business environment.


India Pharma – Of Markets and Morals

Of late, the pharmaceutical industry has been in the news for all the wrong reasons. First, the government intervened to bring in large groups of medicines under the price cap to make them more affordable to the sick. Even before that happened, companies were caught overcharging for some medicines in violation of the prices set by the national price regulator.  Recently fixed dose combinations (FDCs or products containing two or more medicines in a single dosage form) were banned en masse by the government. All these decisions caused observers to declare that the free market in pharma had all but failed.

Fixed Dose Combinations (FDCs) – convenient but deadly

Recently, an expert committee found about a 1000 of these products to be irrational in nature which means that they could potentially harm patients who consumed them. Commentators pegged FDCs to constitute nearly 50% of the $15 billion domestic Indian pharma market. It is impossible to believe that such a large market exists without consumer demand to match.

These medicines have been available for years – in some cases, over 30 years. To be sure, this doesn’t make it legitimate. If FDCs have been deemed to be unsafe for patients by experts, then we must accept the verdict. What is wrong is wrong and one should not defend it.

What one should definitely do though, is debate how to make things better. Why were irrational combinations approved? What systemic shortcomings should be plugged to ensure that this doesn’t happen again? What kind of punitive action should be forthcoming?

Rather than engage in such conversation, the discussion in the public domain has been completely a moralistic one. Pharmaceutical companies have been labeled greedy and corrupt. They have been accused of caring nothing for human lives and focusing only on making profits instead.

This is not to absolve companies at all, but what seems to irk some commentators more than anything else is that no laws were broken and so it is difficult to lay the blame squarely on one party. To confound matters, the courts immediately granted stay orders on the ban. This prompted commentators to wonder if companies bent the rules. Why else have state regulators – who approved most of these products – not stood up to defend their case, they ask?

Instead of such conjecture, would it not be more fruitful to understand why this was allowed to go on for so many decades?

Governance and Free Markets

If FDCs were irrational, why were they authorized in the first place? If the rules stipulated that licenses obtained from state regulators be validated by the central regulator, why were there no checks in the system to make sure that was done?

Obviously, there isn’t an appropriate approval system that seeks proper documentation. There is no proper adverse event reporting (AER) system in place that helps gather real-world evidence of the harm caused by such medicines. Absent all these systemic check-points, the government action seems ham-handed and open to moralistic judgment.

This is probably why an informal survey carried out by a leading business daily found that 40% of doctors disagreed with the ban on products they had routinely used in thousands of their patients over many years.

It is common knowledge that the governance system is severely underdeveloped in India. Yet, when a PIL was filed in the Supreme Court of India, the judges threw the case out saying something to the effect that they had bigger priorities to work on! An indifferent judiciary kills free markets.

In this backdrop, does a ban seem like the best solution to the problem? It seems more like a reaction by a hapless regulator to fill the void created by an inefficient judicial system. Yet, there is not a single voice appealing to reform this system. That would have been more logical than moralistic jingoism.

Aside from the lack of science to support the products, the ban is based on the fact that these FDCs aren’t approved by the US-FDA. This is simply because the single medicines used in creating the combinations are often under patent protection and belonged to different companies. It would take extraordinary effort for these companies to forge deals to create such combination products. India does not recognize these patents and therefore Indian companies can easily formulate combination products.

Voice of the patient

Sadly, what began as an exercise to help patients reduce pill burden and increase compliance to therapy ended up in an overambitious industry effort to create products, not all of which were supported by science.

But, has anyone bothered to ask what the patient wants? It would be interesting to examine if patients complained about problems with these products. What happens to people for who a particular combination that worked to relieve cold and fever for years is suddenly pulled off the market? Shouldn’t consumers have a way of lending their voice too?

Despite being morally correct to do so, no commentators called for the formalization of patient bodies that can have a place at the table during such decisions. No one asked if it was right for government to decide what’s right for people. No one asked about personal choice.

On one hand, it is common knowledge that goods with great demand that are banned by governments, find their way to consumers through a parallel marketplace that we commonly call the ‘black market’. The government knows this through its strict regulation on alcohol, narcotics, gold and other such goods. Sadly, it learns nothing. Is it morally right to allow patients to buy low grade medicines off the black market? If the government cannot tell people about legitimate medicines, can we expect them to “protect” citizens from spurious and counterfeit ones?

Corporatization of Free Markets

On the other hand, it goes without saying that exploiting loopholes in the law is definitely not a smart business decision. History has taught us that such seemingly short-term benefits can turn out to be disasters in the medium to long term. Companies considered market leaders and ‘too-big-to-fail’ have disappeared after doing so in the past. Why do executives not learn from history then? Are they evil, scheming Scrooges as they are made out to be?

Perhaps, corporate incentives are completely misaligned. They are too skewed towards profit. While this in itself is not bad, it can encourage risk, recklessness and avarice especially in a system with a grossly underdeveloped governance structure.

What about internal ethics and governance policies of companies? Even if local laws are not stringent about submitting scientific evidence to back up the therapeutic benefit of these products, shouldn’t drug-makers have gathered evidence anyway? It is no excuse at all as observers claim,  and rightly so.

Morals and Markets

At the end of the day, whether for moral reasons or economic ones, companies should know that irresponsible behavior undermines the very nature of the free markets that they advocate for. Popular moralistic sentiment mistakes corporate behavior as the epitome of the evils of privatization and the subsequent failure of free markets. The irony is that bans, punitive government action and continued interference prove time and time again that markets are NOT free at all.

Much reform in the space is required to set markets free in the true sense. To argue against free markets by pointing out recent failures is to not understand what free markets truly mean.

Not much can be said if the government is forced to intervene because of reckless corporate behavior. The key question is who will stand up and take the responsibility of breaking this vicious cycle?

Until then, we will misguidedly worry about markets becoming detached from morals instead of using the opportunity to push for reforms that will truly benefit patients. And that is through a free and fair market.

Health and the freedom of choice

People talk a lot about “freedom” these days.  Be it freedom from colonial rule or the freedom of expression, the freedom of the Internet, the freedom to watch porn, to have consensual sex in beach-side resorts or the freedom to marry irrespective of faith. At the root of each of these passionate beliefs is the resentment of the State intervening in the freedom of personal choice. Why then, does this resentment dissolve when we think of health and health care?

Health and health care is as much a subject of personal choice as is the right to choose what you want to watch on the internet or do in your free time. Would you like it if the State told you to consult this doctor and not that one? Or if they told you which hospital you could be treated in or to what cost your treatment should be limited to? And yet, that is exactly what a pharmaceutical industry lobby in India, demanded that the government should do!

At a recent event, the Organization of Pharmaceutical Producers of India (OPPI) asked the government to increase public spending in the health sector. This would include subsidizing health insurance and providing universal health care. This sounds perfectly reasonable, doesn’t it? After all, shouldn’t everyone be able to access free healthcare?  It isn’t really very reasonable, if you think about how it would actually be done.

The first thing the government would look for is the money to fund this mammoth task. And that money would obviously come from the taxes that we pay!  Just as the industry should choose to resist a move by the government to fund universal health care through an increase in corporate taxes, ordinary citizens should also have the choice to pay lower taxes from hard-earned salaries.

As if in preemption, the National Health Policy recommended a ‘sin-tax’ – a tax on fast food, tobacco, alcohol, aerated drinks and other such – to fund healthcare. Do you think companies who sell these products will pay that money – or will you? And do you think the money collected through an indirect tax is enough to fund free healthcare for 1.25 billion people and more? The next step is prioritization. Should money be spent to build new medical colleges, or hospitals, or primary health centers? Isn’t it more important to give away free medicines? Maybe health insurance for everyone is an urgent need too. See the confusion? There are just too many things to do, and the money is too little. Even the NITI Aayog – that advises the government on policy matters – doesn’t think this to be a good option.

I believe the OPPI – as a powerful industry body – should focus on getting the government to simplify if not simply to do away with healthcare laws in their present form. For example, if the laws that require licenses to set up hospitals and medical colleges are simplified, they could attract many more players to the health sector. The result will be more colleges and better trained doctors and paramedics.

Today, despite the attractiveness, even the biggest home bred industrialists running multi-sector conglomerates, fear to tread into this space because of over-regulation.  Yet, CEOs of pharma companies have rarely – if ever – called for a simplification of or doing away with the law.

Simple economics tells us that markets immediately respond to increasing demand. The healthcare space in India is bursting at its seams with demand. Why then is supply still regulated by the government? Open it up! Allow anyone who wants to enter the space to come in and set up shop. This will reduce an enormous amount of workload on the government and pressure on the health budget as private capital is infused into the sector. The increased competition will also drop prices, improve quality and allow consumers the freedom to choose instead of being told what to do.

To be sure, a lesser regulated sector will definitely attract the greedy.  This is why I do not advocate for public-private partnerships (PPP). PPPs are as full of cronies as any crony organization is, and is as full of opportunists as the government is. PPPs often have a low probability of working efficiently since the government controls private capital and promote “profiteering” over “profit”. Distinguishing “profit” from “profiteering” is an important task the OPPI must undertake. To ensure that players understand the differentiation and stay fair, we need a less-burdened government to run an efficient justice system.

As a representative of the industry, the OPPI must remind the government of what it’s Chief Executive promised India’s people – minimum government, maximum governance. If the government focuses only on governance, we might have a more efficient justice system in India and with it, more providers of service.  In such a situation, power moves to the consumer and he is free to reject cronies and cartels and opt for those who serve him well. That is the power of choice.

In a country driven by electoral politics and vote-banks, the most dangerous part of large-scale welfare is that it cannot be rolled back. Look at the newspapers to see how many countries with welfare went belly-up. To continue funding such welfare, the government slowly but surely will begin to control everything else.  Is there any part of the state-controlled apparatus that you like? Why should you expect healthcare to be any different then?

State provided insurance will probably be worse. The sums for which you are insured are ridiculously low and rarely keep up with evolving prices. Look up the fines that convicted criminals have to pay! If we still follow a penal code made in 1860, what are the chances of the health policy keeping pace with escalating health costs in the future?

When the insurance sector opens up to competition, the few players who have formed powerful cartels will be forced to break them, resulting in cheaper and better insurance schemes. Also with lesser taxes and benefits to pay, you have more money in your pocket to decide how to use it. Think of it as a 50% increment every year!

With efficient courts, cronyism and cartels will reduce. Pricing mechanisms that are “set-up” or “rigged” will be set free to respond to market realities. More hospitals, more doctors, paramedics and lower medicine prices; health insurance that does not ditch you when you need it the most – isn’t this the stuff patients’ dreams are made of? Why does the OPPI not think of this approach to improve access to healthcare?

The OPPI’s appeal probably reflects a point of view that it is the role of the government to provide healthcare. Not so! It should be the role of anyone capable, to provide it. Instead of asking for access to free healthcare, the OPPI should instead ask for free access to healthcare. The government’s presence hinders that. I would resent having to entrust my healthcare to it, if I had the freedom of choice.

Published in the September 2015 edition of MedicinMan

The Right to Health or the Right to stay Unhealthy?

After the Right to Work, the Right to Food and the Right to Education were introduced by the earlier govt, they were duly criticized by a section of the polity as encouraging govt spending at a time of a burgeoning fiscal deficit. The new government – which consists of many of those critics – now thinks that the time has come for a Right to Health. The argument is that given the poor state of public healthcare infrastructure in this country, what are the poor and the disenfranchised to do?

 Some people argue that the government should deliver healthcare directly to the poor. Others favor cash transfers. Just to be sure this piece assumes that the role of the government is primarily limited to financing healthcare which is not envisaged in the govt’s policy document. It is difficult to say which approach seems the most favorable in an area with this magnitude of social impact.

Published literature suggests that contrary to popular sentiment, conditional cash transfers are necessary but not sufficient for improving health. Instead, good government-funded health care is essential, as are schemes which address social determinants of health.

India’s move to adopt cash transfer through schemes such as the Janini Swasthya Yojana (JSY) attracted polarised debate despite the scheme reportedly having shown success by reducing infant and maternal mortality rates.

A study published in The Lancet, found that the opposition is on two counts. First is that cash transfer requires precise identification of the needy. As with anything that has cash and govt together in it, the percent of women receiving payments ranged from as low as 7% to as high as 42%. This may leave a substantial number of poor out of the benefits.

Second, the inability of some Indian states to fully participate in JSY may be due to disparities in public health infrastructure between regions in India. Where will people invest the cash they receive if there are no facilities? The fungibility of money and low health awareness in the masses adds to the complexity.

Although in 2005 India implemented the National Rural Health Mission (NRHM) with the goal of increasing public spending on health from under 1% to 3% of GDP, Indian healthcare is still largely private.  An increase in public spending to finance healthcare is – to quote Arun Shourie – more said than done.

Therefore, should govt even attempt to throw more good money after bad? Is tax payer money best spent improving the supply of public healthcare itself? Is that even something we can expect? Or are markets better placed to provide health care and services?

If the Prime Minister is held to his pre-electoral promise of ‘minimum govt, maximum governance’, it would mean that the govt takes radical steps to deregulate medical education, produce medicines and insure people. This can only happen through large-scale privatization of the industry as the govt changes track from providing healthcare to only governing its provision.

It must also mean eliminating all subsidies to the sick or unhealthy as subsidies act as incentives to its beneficiaries and therefore creates more of whatever is being subsidized. If subsidies to the sick promote carelessness, indigence, and dependency, can its elimination strengthen the will to live healthy lives and to work for a living?

As a recent paper on the economics of healthcare states, if people are determined to live unhealthy lives, then there is no system that can fix the underlying problem. At the end of the day, health is largely a matter of personal responsibility.

The health sector is characterized by information asymmetry where doctors know more than patients, and the industry knows more than regulator. Asymmetry creates an imbalance of power and therefore compromises on honesty and morality. If the market decides not to be honest, no govt intervention can prevent, or even deter it. Focusing the State’s energy, power and resources to plug this loop can probably be the most impactful intervention to improve India’s pathetic health sector.

Subsidies to the poor through another Rights bill could only incentivize unhealthy behavior in a section of society that doesn’t need it and hardly impact the section that desperately needs it. The Rights to Work, Food and Education have shown it to be true in the past but in true Indian style, no lesson seems to have been learned.

What can the pharmaceutical industry expect from the new government?

India’s economy is performing poorly, at least compared to its relative dynamism just a few years ago. With a general election to be concluded by the end of May 2014, many are looking to the country’s next government to break India out of its economic doldrums. Pre-poll surveys (whether you like them or not) have predicted a strong wave of support for the Bharatiya Janata Party (BJP), led by its prime ministerial candidate Narendra Modi. It is expected that a business friendly environment and policies that support the health care sector may well be on the cards if this was indeed to happen.

 I am certainly hopeful that a BJP led govt comes to power at the Centre with a majority mandate. This will ensure that the government has a free hand to set the economic agenda of the country. This is, of course, assuming that the agenda will favor right leaning economic policies all the way which may not be likely. 

 Are changes to India’s health policy likely?

 At the moment, it is speculative to say what the changes in policy are likely to be since the BJP has not spelt out its agenda or made its “Vision 2025” document publicly available. That said, the only thing one can be fairly certain about is that market sentiment will be buoyed only if the political environment remains stable. It will be a shame if a fractured mandate forces any party to align with parties of opposed ideologies – or God forbid – an Alternate Front comes to power.

 On the health policy, I can be fairly certain that a new govt will have two important things to address: 1) reduce the current account deficit (to control inflation and prices) and 2) bring in revenues to a depleted treasury. To work towards these two objectives, it can be fairly assumed that industry friendly policies will be adopted since welfare schemes are populist in nature and cannot be withdrawn in India.

 While the FDI policy is clear (uncapped), the same is not true of areas such as clinical trials and IPR. The BJP manifesto promises to support industry that transfers technology into India. If this happens, we may see FDI flow into greenfield projects which has been quite slow so far. However, this will require complexities such as the Land Acquisition Bill, Labour laws etc. to be simplified. At the moment it is assumed that a Modi govt will be more inclined to push Economic Reforms 2.0 than the UPA was. This means that we may see a fillip to the industry overall.

 If the govt pursues industry friendly policies we are unlikely to see capped pricing on patented drugs but a more nuanced approach to balance prices of medicines and access. There maybe an inclination to strengthen insurance coverage through RSBY and the private sector, state-purchase and distribution of medicines through the Jan Aushadi 2.0 scheme, more hospitals through PPPs etc.

 What will be very interesting is to see how the IPR issue is tackled. I believe this is more a diplomatic failure and grandiose posturing rather than a real issue. There have been more cases of CLs being rejected than issued. Validity of patents have been upheld fairly, so I feel it is unfair to term India’s IPR regime as “fluid”. India has the responsibility of protecting the health interests of its citizens and it should continue to do so. The issue can easily be laid to rest through some deft diplomacy which a govt strengthened by stability can achieve. 

 Another development that hasn’t captured public imagination and debate in India is the US sponsored TPP agreement. Indian generic players can be strongly impacted if the TPP comes into effect and the US de-prioritizes India as a result of the agreement.

 Will the new government pursue Universal Health Care?

 UHC is something that has been on the cards of all political parties for a long time. However, there seems to be no clear direction on how to progress. With the BJP proposing to support federalism and strengthening the state govts, it remains to be seen if they will put their money where their collective mouths are and first, increase spending on healthcare as a % of GDP to at least 3% (the WHO mandates 6%) and second, transfer a bulk of that money to state govts.

 This is the tricky part. Opinion polls have shown that the BJP will rule at best in 15 out of 29 states. Assuming 100% of BJP states comply with UHC, ~50% of India’s population would be deemed to be covered. This is in line with the UPA govts plan of increasing health coverage to about 52% of the population, up from the currently covered 35%.

 This alone would be a significant step to achieve in 5 years since UHC would involve a paradigm shift in health policies and programs in favor of vulnerable population groups, restructuring of public health cadres, reorientation of undergraduate medical education, more emphasis on public health research, and extensive education campaigns

What should the new government’s focus be?

 The one big issue would be to ensure quality and affordable health for all its citizens. It is criminal that after almost seven decades, Free India still cannot save mothers and babies from dying, ensuring that the sick get treated without either going bankrupt or being turned away from hospitals for not being able to pay and that productivity of its citizens is so sub-optimal. No Right to Education can make a malnourished child learn. No Right to Food can save lives of children who do not know it is important to wash their hands before eating. No Right to Information can empower the sick and the disabled. No aspiring superpower can afford to miss so badly on MDGs.

 Only when its populace is healthy can India think of educating its young, employing its youth and caring for its elderly. Health can have a multiplier effect on the GDP of India. And it must be available freely and equitably to every citizen of this country.

 Will the change be for the better?

 Apart from progressing on UHC, the present government could have done a lot to ensure that the health care sector was seen as a attractive destination to investors. While there are statistics to show that the sector still is attractive, it has been badly dogged by several flip-flops from the government, be it on clinical trials, on FDI, on drug pricing, on IPR, or on frowning on acquisitions. With the global economic crisis and govts across the world cutting back on health care costs, India had a golden opportunity to position itself as a world class health provider. Formidable terms such as “largest number of FDA approved plants outside the US”, “pharmacy to the world”, “medical value travel destination of the world” were all lost to other nations who grabbed the opportunities with open hands.

Over the last decade, India was a tragic case of epithets becoming epitaphs. There are no silver bullets here. Tackling these issues is a very big project. But the present system needs to change. Many countries have successfully transformed similar systems after seeing them lead to a rise outlays but a drop in outcomes. The next government must do what it can to help push India toward similar progress. 

Clinical Trials and Judgmental Errors

A few days ago, the Union Health Ministry accepted the Prof. Ranjit Roy Chaudhury Expert Committee report on approval of new medicines, clinical trials & banning of medicines. One of the points in the Action Taken Report was that the Ministry decided to admit data from Phase I and Phase II trials done overseas for medicines that are being developed in India. This, they say, will reduce the time for new medicines to be launched in India.

Phase I trials study the effect of newly discovered medicine – which is either a chemical or a biological compound (new chemical/molecular entities or NCE/NMEs) – on the body of healthy volunteers. These studies determine the way the medicine behaves in the human body. The data is important to identify the dose at which the medicine has the best desired effect.

Once the dose is identified, Phase II studies are conducted to assess the efficacy and the safety of those medicines at the identified doses. Both these phases are essential first steps in the journey of drug discovery and provide confidence to both researchers and government regulators that the medicines are safe for mass commercialization. Phase III trials study the safety and efficacy of new medicines closer to availability in the market and Phase IV study them after the medicines are available on the market.

Before the Roy Choudhury Committee recommendation, the law did not allow the Central Drugs Standard Control Organization (CDSCO) – of which the Drugs Controller General of India (DCGI) is a part – to accept Phase I and II data of NCEs/NMEs that were conducted abroad. What confounded this rule was the fact that India does not have enough capacity in the first place, to deal with the requirements of Phase I and Phase II trials. This often delayed the process.

 It is another story that these delays were inconsequential because very few NCE/NMEs are actually developed – and therefore need to be tested – in India. Almost all new medicines launched in India are discovered abroad and none of those innovator companies conduct Phase I or II studies here.  This is because Phase I trials are completed in 4-8 weeks in the US and Europe while it takes at least 16 weeks to complete the first phase in India.

If the idea is to encourage drug discovery in India, it is an inconsequential one. As a study in 2012 by the Institute of Bioinformatics and Applied Biotechnology, found that the prospects for original drug discovery in India are poor. Improving drug discovery in India will need reforms at a much broader structural level. Merely allowing trials to be done abroad is hardly an incentive for companies to begin to invest in drug discovery – a process that involves hundreds of millions of dollars. So how does this development actually help the Indian patient?

To be fair, this maybe an attempt to reverse the damage created by the knee-jerk reactions plaguing the clinical trials industry in India. The rules currently allow parallel Phase II and Phase III Clinical trials in India for NCEs/NMEs undergoing clinical trials anywhere. This is an important step if the government is serious about making new drugs available faster to the Indian patient, since it is willing to approve medicines which have been studied in a sizeable sample of Indian subjects during Phase III. However, by clamping down on approvals of clinical trials, MNCs will continue to remain unclear on whether those parallel trials will ever take off in India.

Companies will also be forced to reconsider bringing to India even those medicines that have completed all trials (Phase I-IV) overseas. This could mean a delay of many years. To worsen this situation, the government wants to amend a rule that allowed the waiver of clinical trials in Indian subjects if the medicines had approval abroad. The government now intends to make it possible to waiver trials in Indian subjects only if there is a national emergency or an epidemic. This means a few more years of delay to the availability of new medicines in India. Add to this the ambiguity around India’s stand on IP laws and pricing of new medicines.

So will the changes make new medicines available in India faster than before? Are these changes going to be accepted independent of the other interlinking factors which often seem contradictory? At the moment, the hullabaloo around India’s health policy continues. Viewed macroscopically, it seems to be a misguided case of almost comical trials and judgmental errors.

Free Medicines or Better Health?



A few days ago, the Vice President of the Indian National Congress party, Mr. Rahul Gandhi tweeted that his party would implement the free medicines scheme for the poor across India. Since the tweet coincided with Mr. Gandhi’s visit to Rajasthan, it can only be assumed that he was touting a relatively successful scheme that his party’s government runs in the state.

Sometime last year, India announced a $5.4 billion policy to provide free medicine to its people. This was the outcome of the report of the High Level Expert Group appointed by the Planning Commission in 2011 to look into the broader issue of Universal Health Coverage (UHC), a key requirement to improve social indices in India.

While the availability of free generics can be a decision that could change the lives of hundreds of millions of Indians, the proposal runs the risk of being overly simplistic and potentially dangerous. The underlying assumption here is that merely providing medicines free would help improve the health and the productivity of the nation. In isolation that is simply not true.

Health is a concept that far exceeds doctors, hospitals and medicines. You need these only when you have to treat a condition. The concept of keeping good health is to prevent anything from affecting you mentally, physically or spiritually. When the government decides that the first step towards UHC is free medicines, it is a step forward gone horribly wrong. It means that the government will do little to keep you in good health and will come up with hare-brained schemes even after you fall ill, leaving you to largely fend for yourself.

This is not to say that receiving free medicines is not a great idea. To the sick and the infirm, it will provide succor to millions who have to otherwise pay for it from their pockets. The problem is in its implementation. That Rajasthan did well with the scheme – as did a few other states – is well studied. However the fact that its nation-wide scale up was shelved demonstrates the government’s sheer lack of confidence. Here’s why.


Currently, less than 35% of India’s population has access to health care. This means approximately 2 out of 3 residents in India do not have a medical facility (clinic or primary health centre) to go to or a doctor to consult, much less be able to get a prescription and buy medicines. Even the 1 out of 3 residents, who have access to a medical facility, barely get to see a trained medical professional. This is because of an acute shortage of trained staff and chronic absenteeism – doctors get their salaries from the government anyway and prefer to spend more time at their private clinics where they can charge for their services. And if the patient is lucky to see a doctor and get a prescription, chances are that the medical stores will be out of stock. The medicines are either not purchased and delivered to the stores or sold into the private market for a hefty profit.

If this is the state of affairs when only 420 million people are anywhere close to accessing health care, imagine the sheer grit, determination and resources needed to scale this up to 1.2 billion Indian citizens and a few million other residents[1]. Is it any wonder then that today 80% of doctors, 26% of nurses, 49% of beds, 78% of ambulatory services and 60% of in-patient care are provided by the private sector?[2]

Providing free medicines is indeed a laudable idea but one that is fraught with impracticality. Mr. Gandhi must outline the measures he would put into place to prevent corruption in the tenders floated for the purchase of high quality medicines, create adequate storage facilities, tackle absenteeism of medical professionals in public hospitals and ensure constant supplies. These are just a few issues. And going by the way the Public Distribution System has shaped up over the last few decades, there is enough room for skepticism.

So, what is the alternative? Given that India vies for the title of “Pharmacy to the World”, it is safe to assume that there is no domestic shortage of production of medicines. The difficult part is to ensure that the medicines are of good quality. If the FDA can tighten the noose on Indian suppliers of generic medicines to the USA, there is no reason why the Indian regulatory agency cannot do it for its own residents. By ensuring the quality of medicines, the government can rely on the open market mechanism that influences the consumption of health care. The naysayers will do well to merely check on the systematic rot and neglect that public sector pharmaceutical companies have been put through by the government to understand why manufacturing has to be private-sector dependent.

The delivery system would also be efficient since it has to be competitive and competent. The huge saving thus accruing to the Government could be utilised to step up public investments in rural and urban health infrastructure and services, thereby generating employment and income opportunities — both directly and indirectly. For the genuinely needy, `medicine vouchers/stamps’ could be supplied through the Panchayat Raj or local government machinery that could be strengthened and empowered for the purpose. But all this services the sick and is a drain on the economy. Countries with the most efficient health care systems are those that prevent illness through early detection combined with community-based primary care to limit more costly upstream interventions.

India faces enormous challenges such as high disease prevalence, unregulated and fragmented health-care delivery system, non-availability of adequate skilled human resource and inadequate finances to name a few. To address these challenges there has to be a paradigm shift in health policies. While the planners of his government have realized that the central government is not ready to set up a scheme of this scale in the face of such challenges, it seems Mr. Gandhi is more optimistic about it.

[1] Report of the Steering Committee on Health for the 12th Five Year Plan, Health Division, Planning Commission, Sec 2.3, Page 24.

 [2] Report of the Steering Committee on Health for the 12th Five Year Plan, Health Division, Planning Commission, Sec 1.6.8, Page 15.

Images courtesy: Rahul Gandhi from here and the Adilabad PHC from here.

Edited version published earlier at Mera Bharosa.


Health care policy in most developing countries has emphasized the development of government-owned health services, largely financed by tax revenues. Following the recommendations of the World Health Organization (WHO), many countries established systems consisting of peripheral clinics and health workers, integrated community health centers and a tiered system of public hospitals. As such systems became established, there was increasing attention given to how to obtain greater health impact from this service capacity.

Not in India. Here since Independence, the private health care sector has grown significantly. That its growth has profound implications for the general public is well understood but highly under-debated. Significantly, despite the problems resulting from the growth of the private sector, there has been little meaningful effort to establish market or regulatory mechanisms to ensure its appropriate growth. Instead of greater commitment to public spending towards health care, we see knee-jerk reactions like controlling prices of medicines that are already the cheapest in the world.

To be fair, since Independence, life expectancy at birth has doubled to 65 years. Yet, India is likely to fall short of deadline on most other Millennium Development Goals (MDGs) set by the WHO. It still accounts for 21% of the global disease burden and loses 6% to 12.5% of its GDP annually due to sickness.

It is therefore surprising that even in desperate times such as now; a glaring public need like universal and equitable health care fails to make it to the agenda of electoral politics. If good governance and its ensuing benefits are the main plank of the BJP, why then did its party President, Rajnath Singh simply talk of providing medical insurance to “even those living in villages and huts” and not pledge to deliver on the promise of Universal Health Care (UHC), a platform that the incumbent UPA fell woefully short on?

The popular adage ‘health is wealth’ has been turned on its head by successive governments that ruled India for the last 66 years. To the Indian citizen no wealth means no health. It is therefore, fervently hoped that an innocuous mention by the BJP will materialize into a strong electoral platform to provide much needed succor to the average Indian citizen.

The Uncertainty of Drug Regulation in India

That the Indian health policy is full of flip-flops and uncertainties is a given.  The sector falls under the purview of two different ministries (the Ministry of Chemicals and Fertilizers and the Ministry of Health and Family Welfare) and this leads to confusion on who regulates what.  This lack of a common agenda for the sector catalyzes the perception of the free-fall in policy making.

The glaring gap was contrasted recently when the Drug Regulator (under the purview of the Ministry of Health and Family Welfare) “blinked” on two issues – the stringent compensation norms to patients in clinical trials and the reconsideration of a ban on the sales of three drugs. Both these issues had galvanized different sections of the broader health care sector to action.

Stringent norms for Clinical trials

To begin with the Regulator let loose completely creating a glut of approvals.  In 2008 the DCGI granted 65 approvals for trials, in 2009 approvals rose sharply to 391 and a whopping  500 global trials were allowed in 2010 and 325 in 2011 followed by 262 approvals in 2012. Analysts estimated that the clinical trial market would cross $ 1 billion by 2016. But as reports of mishandling of the trials caused the death of a shameful 2,868 during 2005-2012, the lackadaisical attitude of the Regulator allowed self-styled activist groups and NGOs to fill the vacuum of governance.

It is obvious that the concerns raised by the human rights activist and NGO groups are genuine, but the knee-jerk response to the furore is disappointing. The Regulator’s rejecting or delaying the approval to the applications for conducting clinical trials is in no way a solution to the problem. The industry responded by taking trials to other countries. In 2013 there were only 70 applications and 12 approvals until April. America’s National Institute of Health called off over 40 clinical trials in India.

Under intense pressure for drafting untenable norms for clinical trials, India’s health ministry blinked and amended guidelines for compensation of participants in trials on the advice of the Drug Technical Advisory Board (DTAB).

Ban of widely used drugs

Late last month, the government banned the use of three popular drugs – Deanxit (used to treat anxiety), Analgin (a painkiller) and Pioglitazone (a relatively affordable medicine to treat diabetes). While the ministry unnecessarily dilly-dallied on withdrawing Analgin and Deanxit for years despite pressure from a parliamentary panel, the decision on the diabetes drug pioglitazone took the industry completely by surprise. To be fair, France had already banned it, while in the US it is sold with a boxed warning on potential side effects.

It is widely believed that a letter from prominent diabetologist and Padma Shri awardee Dr. V. Mohan reporting 8 cases of bladder cancer, influenced the government’s decision to ban pioglitzone! One letter! Instead of simply ordering a larger investigation (as was done by the US in the case of rosiglitzone), the government took the extreme step.

In the face of criticism and pressure from patient activist groups, industry bodies and doctor associations, the suspension is likely to be revoked. This decision is also influenced by the DTAB. It met July 19, 2013 and recommended that pioglitazone be put back on the market in India, albeit with a boxed warning about bladder cancer.

Why does the Indian drug regulator make such an ass of itself time and again? Does it pursue a hidden agenda as has been insinuated? Was the ban on pioglitzone a move to appease the US government after it criticized the fluidity in the Indian patent system?

It seems that the Drug Regulator’s Office is simply uncertain about how to manage a complex environment. When people died, it went into a spasm and dried up the approvals for new clinical trials. When an individual objected, it banned a drug that was used by millions of diabetics. When foreign regulatory agencies pulled up domestic companies for manufacturing and quality defects, it was quick to abdicate responsibility by putting the onus of reporting such incidents on the companies.

The agenda of India’s Drug Regulator seems to set by others – the media, individual opinion leaders and the actions of foreign regulatory agencies.

It is no wonder then that when the US Congress recently questioned India’s regulatory capabilities, our Ambassador to America had to convince them that laws were “rigorously enforced.” India’s Drug Regulator, whose job is exactly to ensure that, unfortunately could not.