On Express Pharma’s 20th Anniversary, Ranjana Smetacek, Director General, Organisation of Pharmaceutical Producers of India (OPPI) rewinds to the milestones of the past two decades, but concludes that even though much has been accomplished, more remains to be done
20 years are not a long time in the history of a nation, but the events of the last two decades have shown that much can be accomplished by way of dismantling some of the debilitating features of an old order and replacing them with revitalising new ones. It would be instructive to rewind to the early 1990s: the introduction of the Patents Act in 1970 mandated process patents for drugs and saw a boom in the domestic generic drugs industry which thrived on “reverse engineering” and the tweaking of production processes. The government’s policy focus was on promoting import substitution and domestic production with a view to enhancing the affordability of drugs. On the down side, there was an exodus of research-based pharmaceutical companies and huge damage was caused to India’s potential as a base for R&D.
The opening up of the economy in 1991 had a salubrious effect on the pharma industry as well as the broader healthcare sector. In the last 20 years, a number of significant changes have taken place that cumulatively have the potential to deliver greater economic growth and superior healthcare by promoting and protecting innovation. Liberalisation meant that India began to fall in line with international best practices and global trading norms. The adoption of a system of product patents and legal protection, through Trade-Related Intellectual Property Rights (TRIPS), provided greater encouragement to the innovation driven industry. Since 2005 the patent regime in India has allowed the patenting of drugs by virtue of being signatory to TRIPS. These moves helped see the return of international investors to the Indian market.
However, even though much has been accomplished, much remains to be done before India can be considered welcoming of innovation that can contribute meaningfully to transforming the healthcare sector and help our pharma industry fully realise its enormous potential. The government is committed to making India one of the world’s leading destinations for end-to-end drug discovery and innovation by the year 2020. Although India has achieved the distinction of being the world’s number one supplier of low-cost generic medicines, a combination of misguided government policy and shortsighted business practices has crippled our efforts to become a drug discovery and innovation powerhouse, while jeopardising our access to export markets due to serious issues relating to quality.
Five years ago, the then President declared this to be India’s “decade of innovation”. However, we have since lost sight of a critical fact: protecting innovation means protecting our innovators and creators, attracting world-class R&D, and creating and sustaining high quality jobs through robust protection of intellectual property (IP) rights. Today, we excel at developing copies of off-patent drugs, but we lag far behind comparable member nations of the World Trade Organisation (WTO) in new drug development. India has some of the finest minds available for research. It has a well-developed pharma industry that can ably support R&D. But for many complex reasons, we have not realised our potential to lead in R&D. Sometimes, IP protection is seen as a barrier to healthcare access, but the truth about healthcare access and affordability is more complex.
Critical dimensions of healthcare access
A recent study by the IMS Institute for Healthcare Informatics – Understanding Healthcare Access in India: What is the Current State? – defines four critical, interrelated dimensions of healthcare access. These components are: physical accessibility and the location of healthcare facilities; availability and capacity of needed resources; quality and functionality of service required for patient treatment; and affordability of treatment relative to a patient’s income.
The study calls for an integrated approach to healthcare infrastructure in the country that would ensure delivery of the actual therapy in a cost-effective manner to all stakeholders. Such an approach, it said, could result in a 40-45 per cent reduction in out-of-pocket expenditures for both outpatient and inpatient treatments.
Any efforts to improve healthcare in India must take note of the fact that urban residents, who make up 28 per cent of India’s population, have access to 75 per cent of the health infrastructure in India. They have access to 66 per cent of the country’s available hospital beds, while the remaining 72 per cent who live in rural areas have access to just one-third of the beds. The distribution of healthcare workers, including doctors, nurses and pharmacists, is highly concentrated in urban areas and the private sector.
The 72 per cent patients in rural areas face a major challenge just in terms of the physical reach of any healthcare facility. They must travel more than five kilometers to access an inpatient facility, 63 per cent of the time. Difficulty in accessing transportation options and the loss of earnings, as a result of travel time, lead to treatment being deferred, or facilities selected that may be closer but are not cost-effective or best-suited to patient needs. This is particularly true for patients suffering from chronic ailments.
Then there is the high absenteeism of doctors at rural centres in many states in India and major gaps in the quality and availability of even basic medical care, apart from what is essential for serious illness. Finally, there is the question of the cost of medicines. Across public and private facilities, and for chronic and acute diseases, medicines account for more than 60 per cent of patients’ total out-of-pocket expenses for outpatient treatments, and 43 per cent for inpatient treatments. Interestingly, this share of expenditure for medicines has not increased since 2004 for inpatient treatments, and has decreased for outpatient treatments. Low insurance penetration – and current insurance plans do not cover drug costs – has not helped.
Need equitable access for optimal care
Overall, the statistics highlight the conundrum India faces. The healthcare system needs to ensure equitable access in rural and urban areas for optimal preventive and curative care. On the one hand, there is a lack of access to healthcare, while on the other there is a greatly expressed concern about affordable healthcare. The key to healthcare access is proximity to healthcare facilities, a robust health infrastructure, easy access to medicines, adequate and efficient resources in government facilities, competent medical personnel and a well-developed distribution network.
This requires higher investments in health infrastructure development, focusing on universally available primary healthcare facilities for individuals and families at grass-root levels in the community. This is where the government must step up, in terms of developing the health infrastructure in India, across all the identified dimensions.
Make UCPMP a statutory code
Finally, we must insist on ethical marketing, to ensure that patients are prescribed only those medicines they truly need. The government issued the Revised Draft Uniform Code of Pharmaceutical Marketing Practicies (UCPMP) in 2012, as a voluntary code for the Indian pharma industry with the intent to review it down the road and make it a statutory code if needed.
The OPPI has urged the Department of Pharmaceuticals to make the UCPMP a statutory code, in the best interests of both patients and the industry. This will inspire confidence among patients and demonstrate India’s commitment to a high level of ethics and compliance. A statutory code would work as a ready reference and guide in pharma marketing. Of course, its success would depend on the cooperation of the Medical Council of India and the Indian Medical Association. OPPI members follow a stringent Code of Pharmaceutical Practices, which is based on the code of the International Federation of Pharmaceutical Manufacturers and Associations.
India is widely recognised as a regional superpower and must say goodbye to the adage that most Indian families are just one illness away from poverty. We in the pharma industry are ready to partner with the government and join forces to help make that historic transition to guaranteed health security for all. OPPI remains committed to supporting the nation’s healthcare objectives, collaborating with the Indian Government and other stakeholders to find sustainable solutions; solutions that balance the need for innovation with the necessity for more accessible medicines, within a robust IP environment. A holistic approach is needed to expand healthcare in India and OPPI believes the pharma industry can form part of the solution.
We support the Indian government’s quest for more accessible and affordable medicines and welcome a more comprehensive dialogue between private and government stakeholders. Inclusive healthcare is critical to our nation’s future. Through concerted efforts – whether through CSR, research and development (R&D), Public Private Partnerships or other initiatives – the healthcare system in India can be improved to equal that of other countries in East and South-East Asia.