Healthcare sector in India

Published: 07th May 2009
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Sampling Research Pvt. Ltd. had conducted a research study on healthcare in India and the perspectives on Intellectual Property Rights in the Pharmaceutical sector. This study was done by conducting in depth interviews of highly placed people (ministers/ directors/ beneficiaries/ NGOs) across all strata of the healthcare system.


Not surprisingly most of the respondents rated healthcare in India at an average of a dismal 4 points on a scale of 1-10 (where 1 is lowest and 10 is highest). Many factors contribute to this sorry state of affairs. Those include:





Providing satisfactory healthcare needs of 1.2 billion people is not an easy task for any administration. There is a major divide between the rich and the poor in the country. Of late because of the many private hospitals that are equipped with the best infrastructure the urban rich get proper treatment and facilities. But unfortunately India is mostly rural than urban. Even the rural rich have to travel miles to avail these facilities. Medical professionals are concentrated in urban areas with no government policies to encourage doctors to go to rural areas. Some efforts are on by some state governments to force doctors to work in rural areas. In these areas there is a greater need for healthcare needs.





Lack of education gives rise to sanitation and hygiene problems. No reliable source of water supply and lack of infrastructure make people very prone to water borne diseases. Good government hospitals are overburdened by the high population densities in cities and cannot always provide quality healthcare required. AIIMS in Delhi is one such hospital. In addition there is a poor drug delivery system because of which medicines even when available do not reach the masses. In addition to that pharmaceutical companies are not spending enough in R&D to get the second and third generation drugs. One of the programmes by the government





that failed is the Family Planning program due to cultural and social issues thus making the huge population a major challenge for the administration.





On a positive note over the years things have improved. Infant mortality has decreased, medical tourism has become more common and medicines have become more accessible. In case of medical tourism patients not only come to India from Asian countries but also from countries like UK where the





waiting period for any surgery sometimes is several months. Successful healthcare programmes include the Polio drops/ DOT/ Immunization, the effects of which have to be measured.














The other issue studied was that of patenting of drugs





There was mixed response here. Most of the respondents felt that the government should understand the clauses first and should not patent anything and everything as that would restrict the availability of drugs in the market. Hence there should be enough clauses to help both the parties (the consumer and the manufacturer). Some respondents also





were of the opinion that there was no harm in abusing patents to safeguard the people's health. Inflow of FDI and innovation is not directly related to strong patenting at least there is no such evidence to back this. It was felt by many respondents that economic development will not be affected if government breaks patents for the benefit of the masses, many cited China's example. Hence the middle path was most preferred with enough clauses so that monopolistic markets do not arise with the patent regime.








The drugs and pharmaceuticals sector has emerged as one of the top five sectors accounting for maximum foreign direct investment (FDI) inflow. India is increasingly becoming the darling of pharma MNCs, who are vying with each other to set up operations here. One of the main triggers for this growth is the change in the country's patent laws. Japan's fourth largest pharmaceutical company has big plans for India. The company has just set up its operations in India and has already rolled out two products into the domestic market, Aricept and Parit (being marketed by GlaxoSmithKline) - and both are doing "very well" according to newspaper reports. The advent of the product patent era and a positive outlook for the pharmaceutical sector as a manufacturing hub has resulted in a significant increase in foreign investment in the drugs and pharmaceuticals sector.





The sector has seen the maximum foreign direct investment (FDI) inflow amounting to $340m (Rs 1571.1 crore) in '04. Over the last 25 years, the Indian pharma companies have gained a firm footing in the market, their share of the domestic market having risen from barely 10 per cent in the early 1970s to over 80 per cent now. India has also emerged as a major supplier of drugs to the international markets, particularly over the past decade. A major factor that contributed to the rapid growth of the pharma industry is that through skilful innovations in production processes, the Indian companies could make cheap copies of patented drugs and sell them at very low prices compared to anywhere else in the world. However, this favourable business environment will now undergo a change to favour drug MNCs because of their size and heavy R&D budgets. Even so, given the maturity and growth achieved by the pharma industry over the past decade and the successes of leading firms such as Runback, Dr Reddy's Laboratories, Cipla, Nicholas Piramal, Glenmark, Wockhardt and many others globally, the Indian industry today is not unduly worried by the challenges of the new regime.





Medicines Sans Frontiers (MSF), the Nobel Prize winning humanitarian organisation, says that Indian manufacturers of combination drugs for treating HIV/AIDS victims have been instrumental in bringing down the cost per patient from $10,500 per month to just $350 per year. They have, thus, revolutionised the treatment and care of AIDS patients across the world.




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