By Philip Stevens and Nilanjan Banik
India, like many middle-income countries, is committed to providing Universal Health Coverage and has made significant progress through the Ayushman Bharat (AB) programme, targeting the bottom 40 per cent of the population. Under the AB programme, as of September 2019, the government has allocated Rs 6000 crore, generated 10 crore e-cards, and has empanelled 18,000 hospitals across India.
This commitment will receive further international backing at the UN General Assembly in New York on the 25th September, where a new political declaration on Universal Health Coverage will lend international legitimacy to the government’s reforms.
While progress is being made, there is still a long road before all Indians have access to quality care. According to a major study in UK medical journal the Lancet, India has made solid progress in reducing deaths from common non-communicable diseases such as cancer, heart and lung disease, but not enough to meet international targets such as the Sustainable Development Goals. India is also falling behind on measures relating to maternal and child mortality, numbers of doctors and hospital beds.
A key issue is availability of medicines. Although India is the third largest producer by volume of generic medicines, there are problems with accessibility of medicines. This is true for generic medicines that have long been off-patent and the medicines that have more recently come onto the market. Access to medicines stands at less than 35 per cent in many Indian states, with important medicines unavailable in both public and private pharmacies. Newer medicines that could make a real difference to Indian patients are frequently only available in India years after their first global launch, or not at all.
To speed things up, there are several low-cost steps the government could take immediately to improve and accelerate access medicines to reduce non-communicable disease mortality. These involve cutting red tape, taxes and barriers to trade that are standing in the way of access to medicines.
Even with the introduction of the AB, 70 per cent of healthcare expenses are out of pocket. Anything that needlessly adds to the end price of a medicine constitutes a major impediment to access, yet there exist a range of counterproductive taxes on medicines.
Most obviously, there is GST of 5 per cent on most medicines – an extra 5 per cent from the pockets of sick people. There is also a 12 per cent GST on a wide range of other important medical supplies, including bandages and sterile gauze, diabetic monitoring equipment, photographic plates used in x-rays and so on.
Even though India is a major manufacturer of medicines, it still relies on imports, particularly for more modern medicines required to tackle non-communicable diseases. Government actively drives up the price here as well with a 10 per cent tariff on all imported medicines.
In addition to tariffs, there are major obstacles to trade in medicines, particularly at the border and behind borders. These so-called Non-Tariff Measures (NTMs) include inefficient customs procedures, red-tape and hidden taxes. In India around 3,958 instances of NTMs were reported on medicines, mainly on account of labelling and packaging requirements. The time and effort involved in navigating these procedures adds to the costs of trade in medicines, costs which are ultimately passed onto patients in the form of higher medicine prices.
Then there is the process of bringing a new medicine to India, which brings further delays and costs. A patent has to be examined and granted before the process of registering and launching a drug can begin. Due to delays and backlogs at the Indian Patent Office it takes between five and seven years for a patent to be examined, meaning patients will not access new medicine until many years after its first global launch. To be fair to the government additional patent examiners have been hired, but more needs to be done to reduce these backlogs.
After a patent has been granted, patients face long waits for new treatments due to bottlenecks in in the drug regulator, from which all new medicines must first receive marketing approval before they can be sold to the public. In India, bureaucracy and red tape adds further delays of between 400 and 500 days, according to figures from the UK’s Centre for Innovation in Regulatory Science.
Some countries have taken steps to reduce drug registration backlogs by entering into cooperation agreements with other mature drug regulatory authorities, for example, Mexico and a number of Gulf states. India has been reluctant to push reform in this area, still not even accepting clinical trials data generated overseas.
These reforms are cheap, easy to implement and practical. They will supplement the government’s wider reforms of the healthcare system to bring access to all. (IPA Service)
Nilanjan Banik is Professor of Economics at Bennett University. Philip Stevens is Executive Director of Geneva Network, a UK research organisation focusing on international innovation policy.