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Business News/ Opinion / Hard questions about Indian healthcare

Hard questions about Indian healthcare

It is heartening that healthcare issues are receiving political attentionbut current policy measures are lacking

Price caps have encouraged the grey market for regulated products. Photo: Indranil Bhoumik/MintPremium
Price caps have encouraged the grey market for regulated products. Photo: Indranil Bhoumik/Mint

India’s top politicians rarely make influential public statements on the state of the country’s healthcare. In commenting about it recently in a Surat speech, Prime Minister Narendra Modi brought in a refreshing change to this status quo. He mentioned the National Health Policy (NHP) 2017, exhorted the wealthy to contribute and lamented that demand for healthcare far outstrips supply. Hinting also at the mandatory prescription of generic medicines by regulation, Modi expectedly championed affordable healthcare. In a land where healthcare matters hardly ever take centre stage in electoral discourse, this is heartening. But does this ensure the correct direction for healthcare policymaking in India? One cannot be sure.

For example, making generics mandatory also comes with downsides. First, existing research documents irrational prescribing in India as well as prescription switching at the pharmacist level, driven by business rather than clinical reasons. In a 2017 Social Science & Medicine article, Ajay Bhaskarabhatla and I show that in cardiovascular medicines, 129 million scripts (8.1% of the total) in the 2008-2011 period were irrational. The authors also demonstrate the pervasive role of medical practitioners without an MBBS degree across India. In advocating mandatory prescription of generics, might one be catching the wrong bull by its horns? Especially when the real issues—structural ones like irrational prescribing, lack of a national prescription protocol and preponderance of quasi-doctors—continue unabated.

With trust between doctors and patients eroding fast in states like Maharashtra and West Bengal, it is unclear if this is an area that can be addressed with simplistic approaches like generic prescriptions. Thought leadership in this space has to move beyond the swift action that the Medical Council of India has displayed in following up on Modi’s speech with a circular mandating and reminding doctors about going for generics.

It’s also time to reconsider price caps, be they for coronary stents or cancer drugs. While this might result in rational stenting behaviour with checks and balances placed on rent-seeking unscrupulous hospitals, it has also prompted the exit of drug-eluting stents from the market, with no incentives left for manufacturers. This has ended up encouraging the grey market for price-regulated products. The question of what will happen to the health outcomes of patients, poor and rich, being treated with different types of stents before and after the price-capping remains an open one.

Earlier, regulation of prices of cancer molecules resulted in a similar exit of firms supplying important drugs like MannitolTM, leaving providers struggling to provide care. Indian policymakers need to recognize that capping prices can have unintended, perverse welfare consequences. A non-partisan research unit like a National Health Economics Institute, borrowing from similar organizations in China, could provide the scientific evidence required to evaluate such policy changes and then recommend updates to policy post implementation.

Let’s also consider NHP 2017, which seems light on health technology-based assessment and downplays the role of quality in healthcare. Prices are a function of costs and quality measures have an impact on costs, thus they should influence prices. Is the government okay with healthcare in the country at low costs, low prices and low quality or is the first order of concern high quality, reasonable prices and reasonable costs? The former approach is already yielding poor results, with Indian pharmaceutical manufacturers now on the radar of international drug regulatory agencies for substandard medicines. While we have to give credit to recent governmental measures as a response (mandating bio-equivalence studies for all medicines), a substantive and non-reactionary approach enforcing quality medicines and healthcare from India, not just for its export but also domestic markets, may be the better way forward.

Finally, Modi exhorted the rich to address the demand-supply gap via philanthropy. Some enterprises like Manipal Health Enterprises are trying hybridization, mixing philanthropy with profit-making. But if the government depends on such exhortations and on imposing price controls rather than adequately fulfilling its own responsibility of competing not just on prices but also on quality of care (with its own public healthcare machinery), one wonders how private entrepreneurs will engage in sustainable philanthropy. Are they not more likely to come to the conclusion that there is no reason to subsidize the government’s failures? Will it then require a health tax to raise funds for overhauling Indian public healthcare infrastructure? For that matter, what is the outlook for an effective and rational universal healthcare coverage scheme nationwide that doesn’t get hamstrung by the imperative to earn political brownie points? These are some hard questions with trade-offs that arise going forward.

Modi’s Surat proclamations, while very noble in their intentions, thus leave a great many issues up in the air. Will healthcare ever acquire centrality in India’s political dialogue? Is it counterproductive that health in India is a state subject? How can one address this staying within the ambit of the country’s Constitution? The answers to these—if we have any—will determine if we end up with a healthy population in the future or not.

Chirantan Chatterjee and B.S. Ajaikumar are, respectively, economics and public policy faculty at the Indian School of Business, and chairman of HealthCare Global Enterprises Ltd.

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Updated: 26 Apr 2017, 03:17 AM IST
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