My Thoughts and Expressions
Kiran Mazumdar Shaw

Saturday, 12 July 2014

Healthcare Needs a Higher Dose of Medicine from FM

Image Courtesy: Pixabay
An educated, healthy workforce is of crucial importance for any country that is aiming for sustained economic growth. In fact, empirical studies have shown that health improvements provide a significant boost to economic growth in developing countries.

It stands to reason then that health and education should top the agenda of the Modi government, which has promised to raise the pace of India’s economic growth to 7-8% in three to four years from less than 5% now.

In light of this fact, the lack of concrete measures for the healthcare sector in Finance Minister Arun Jaitely’s maiden budget speech was disappointing to say the least.

What disheartened me more was the fact that there was nothing in Mr. Jaitley’s speech that lived up to the BJP’s pre-election promise of introducing “radical reforms” in healthcare.

The BJP’s election manifesto had promised to address the ‘Right to Health’ through an ambitious universal healthcare program based on affordability and accessibility.

The free drugs and diagnostics program, which Mr. Jaitely said will be pursued on a "priority basis", was an initiative the previous UPA government had announced way back in 2012. 

If Mr. Jaitely had provided details on where the money for free drugs will come from and how the government will go about procuring the medicines, it would have signalled some progress on the long path to a universal healthcare system in the country.

The delivery of basic and quality healthcare to all its citizens is a responsibility that the Indian government can no longer shirk off. India is challenged with a rising disease burden as non-communicable diseases (NCDs) like diabetes, cancer, respiratory and cardiovascular diseases are on the rise. Today, 60% of deaths in India occur due to NCDs, according to the WHO. 

India’s rate of public spending on health, 1.4% of gross domestic product, according to the government’s own estimates, is one of the lowest in the world and woefully inadequate to tackle the mounting healthcare challenges.

The government needs to increase public spending on healthcare to at least 3% of GDP in order to expand the healthcare budget, invest in creating new medical infrastructure, ramp up existing public health infrastructure and promote local manufacturing and research.

Here too Mr. Jaitely’s Budget disappointed. The FY15 budgetary outlay for healthcare at Rs 39,237.82 crore was a mere 5% increase from the Rs 37,330 crore the UPA government had earmarked for FY14.
                                
The Finance Minister also made a financial commitment of Rs 500 crore to improve the healthcare system by setting up All India Institutes of Medical Sciences (AIIMS) in West Bengal, Andhra Pradesh, Uttar Pradesh and Maharashtra. Though well-intentioned in that it could help bridge the gap for qualified medical personnel in India, I feel the amount allocated is inadequate.

The minister also proposed to open 12 government medical colleges and 15 rural health research facilities, but failed to detail their cost or when they would be set up.

What was most baffling however was the move to withdraw an existing services tax exemption given to clinical research organisations that test drugs on human subjects. This is a cruel cut indeed for the clinical trials industry that is already reeling from the ongoing moratorium and regulatory uncertainty.

Going forward, I hope the Modi government will act quickly and decisively on the healthcare front because in the final analysis the wealth of nations depends on the health of its people. 

Wednesday, 4 June 2014

The Global Right to Healthcare

The Othmer Gold Medal was given to me by Carsten Reinhardt, President and CEO, CHF
 
My Speech at The Chemical Heritage Foundation (CHF) 


I am deeply grateful to the Chemical Heritage Foundation for awarding me the 2014 Othmer Gold Prize.  This is an honour akin to being invited to join an extraordinary league of scientists, engineers, entrepreneurs, thought leaders and philanthropists, an emotion that is both proud and humbling at the same time.


As a citizen of the developing world, I am only too aware of the power of science and technology in innovating and enabling the alleviation of poverty and building social inclusion in economic development.  As an entrepreneur who is driven by a sense of purpose to make a difference to global healthcare, I would like to use this platform to share with you my thoughts on the global inequity that exists in accessing basic healthcare needs.



Nearly 2 billion people — or a third of the world's population — lack access to essential medicines. We need to ask ourselves: what use is our scientific endeavour and innovation when they do not come to the aid of people who need it the most? Should a drug be described a “blockbuster” by a billion-dollar label or a billion-patients label?



Today, we have an all-oral treatment for Hepatitis C, a bionic eye that restores sight to patients of retinitis pigmentosa, 3-D printing that helps build personalized joints for replacement, precision treatment and targeted therapies that bust cancers etc.etc. Science has indeed propelled us a long way forward in our quest to guarantee our health.



However, to a vast majority of the global population, these and other such medical advances are not the wonders of science but of science fiction. For, these developments are far removed from the reality of millions across the world. Forget access to state-of-the-art treatment, these people do not even have access to basic healthcare. And when healthcare does exist, it is unaffordable



So if we view these medical advances through the prism of social equity, we will see dispersed amidst rays of hope and progress, diffracted rays of poverty, helplessness and inequity. If drugs are developed for only those who can afford them but not for those who need them – isn’t it immoral, and, well… unconscionable? In 2014, shouldn’t the right to healthcare be a given for every citizen of the world?



Not according to some: The CEO of a large pharma company recently said, “We did not develop this medicine for Indians. We developed it for western patients who can afford it."



Is the pharma industry so heartless? There was a time when pharma companies addressed humanitarian concerns. George Merck said in 1929: “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.””



When the twentieth century dawned, we had one widely available modern medicine: aspirin. Today, we have a range of medicines to manage or cure a variety of illnesses. But more often than not, the cost of these medicines is so high that they are pushed out of the reach of most patients, especially those in low and middle income countries where common regimens cost several months’ wages and the cost of treatment for chronic diseases is simply unaffordable. In most developing economies, drugs account for 20-60% of healthcare costs, and 50-90% of these costs are paid out-of-pocket. An illness in the family is the surest route to indebtedness and bankruptcy.



I believe with all my heart that the healthcare industry has a special responsibility to society. Our products are not apparel or automobiles. We sell essential life-enhancing and life-saving medicines and provide life-giving care. And we cannot tolerate this deplorable reality where people with money get medicine, and the rest of the world must manage without it.



The cost of many new drugs is unsustainable for even the wealthiest countries in the world and the burden of disease lies heavy on the coffers of developed nations too.  It is estimated that an astonishing $1 trillion will be spent globally on medicines in 2014.



In 2012, USFDA approved 39 drugs. Of the 12 for cancer, 11 cost $100,000 a year and most recently, a breakthrough Hepatitis C pill won approval with a $1,000-a-day price tag. Yes, drug innovation is expensive and an inordinately long drawn out process which must be compensated through market mechanisms that allow pharma companies to recoup such investments. But the question is how much should this return on investment be?  By putting a price on a drug, we are putting a price on life. And what we see in the price of many drugs is that life, and, by extension, health is therefore unaffordable to most people in the world.



It is imperative to divorce affluence from healthcare and marry affordability and healthcare to enable access. This more than anything will help us make a global right to healthcare a reality. And it is possible to do this even while continuing to innovate in drug discovery and development.



India is a vital producer of affordable medicines and the world’s largest producer of generic drugs. The Indian pharma industry accounts for 20% of the world's pharma industry in value terms and constitutes a significant 80% in volume terms which is how it should be if we are to claim our rightful place as the “Pharmacy of the World”.



Generic producers in India have brought down the prices of life saving drugs used to treat diseases such as HIV, TB and cancer by as much as 90%. In the 1990s, HIV/AIDS drugs cost $12,000 per patient a year which saved patients in the US but not in Africa. The world seemed to accept the unacceptable until in 2001, an Indian pharma company produced a three-in-one HIV/AIDS treatment for one dollar a day.



Today, most of the antiretroviral medicines purchased by the United States’ global AIDS programme come from India, and more than 80% of the HIV drugs that  Medecines Sans Frontieres uses in 21 countries are generics from India.



Indian generics account for a 30% share of the US market and are critical to President Obama’s affordable healthcare programme. Data from the 2013 Generic Drug Savings in the US report shows that generic pharmaceuticals saved the US health system and patients $217 billion in 2012 and a staggering $1.3 trillion dollars in the most recent decade.



India’s contribution to affordable healthcare goes much beyond being a pharmacy to the world. It extends to affordable innovation which goes to the core of ensuring a global right to healthcare. In this, we seem to be drawing lessons from Donald Othmer’s practical and low-cost approach to innovation.



Helped by a significantly lower cost base that supports a large talent pool of scientists and engineers, India’s research engine is now driving a new model of innovation that adds the condition of affordability.  With returns on investment plummeting to unsustainable levels in the West, companies are now rapidly leveraging India’s ‘affordable innovation’ platform through outsourcing, risk-sharing, and co-development partnerships.  GE’s Research Centre in India  has developed a number of low cost bio-medical equipments from scanners to ultrasounds as has Bristol Myers Squibb developed a number of promising  novel drugs at its partnered research center in Bangalore.  My own company Biocon has delivered two affordable novel Biologics for the benefit of Cancer and Psoriasis patients in India.  India is therefore now a laboratory for the world that can deliver affordable innovation and a .growing number of collaborative efforts are succeeding in delivering products and services that can go a long way in ensuring that the right to healthcare becomes truly universal.



Today technology and globalization are creating a world that is a boundary less bazar of equitable opportunities interconnected and supported on a shared platform of knowledge. I truly believe that the world will surely belong to those who learn how to share knowledge and wealth in an inclusive and equitable way and thereby provide the global right to healthcare.



Thank you. 

This is Dr. Kiran Mazumdar-Shaw's acceptance speech for 2014 Othmer Gold Medal, presented by The Chemical Heritage Foundation. She delivered this speech in Philadelphia, PA at The CHF on the 15th of May, 2014.   

Tuesday, 3 June 2014

Reaping The Winds of Change

Image Courtesy: http://bit.ly/ChangeIndia 


The decisive mandate handed to the Narendra Modi-led BJP reflects India’s overwhelming desire for strong leadership that will drive change. Expectations are high from the new government, which will have to deliver on its promise of a better life for every single Indian.

The lacunae in our governance and economic models have thwarted the aspirations of a billion Indians. Runaway inflation has eaten into the savings of the common man, lack of meaningful economic reforms have hurt business and industry and a slowing economy has led to job losses. Basic needs like health, education and a clean environment have remained unmet.

The Indian economy needs a complete overhaul and the No. 1 priority of the new government will be to navigate India towards a path of sustainable economic growth. It will have to embrace the aspirations of the common man and work on narrowing the gap between the privileged and the underprivileged.

To accomplish these goals the new government will have to come up with new and innovative solutions to tackle the current challenges and create an enabling ecosystem that supports the development agenda for the country.

Smarter Regulation for Ease of Doing Business

To begin with, the government will have to focus on regulatory reforms that will improve the ease of doing business, reduce transaction costs and expedite approval timelines. 

We thus need to move away from over-regulation to a system of self-regulation. The regulatory process should be re-engineered to replace the current inordinately lengthy tiered approval system with time-bound ‘deemed approvals’ and ‘automatic approvals.’ There is also a need to make regulations unambiguous and transparent so that their interpretation is uniform across the land.
 
FDI requires an environment of fast-track project clearance and unambiguous tax and compliance regulations.  These measures alone can attract and augment FDI that can contribute to GDP growth.

Leverage IT to Push E-Governance

It is time for a paradigm shift in administrative governance in India through increased application of smart IT platforms for e-procurement, e-tendering, e-documentation etc.

Several schemes to address India’s myriad challenges have failed in the past because of one fundamental shortcoming: the governance mechanism to deliver these schemes is mired in inefficiency and unaccountability. This needs to be rectified urgently.

A good example is Tamil Nadu’s  IT-enabled Drugs procurement model that  has ensured its citizens access to a reliable supply of affordably priced, generic essential drugs. Such a model should be replicated throughout India.

Similarly, there is a need for a wider application of the Aadhar unique ID program.  Aadhar has the potential to provide a strong platform for e-governance and e-healthcare.  The next government has the opportunity to build on the 600 million Aadhar cards and create a unique e-delivery model across a plethora of services. 

Focus on Science & Technology, Incentivize Innovation

Science & Technology is of strategic importance to India’s future leadership.  

Innovation is key to value accretive growth and India needs to step up its investment in research and translational innovation. 

We must identify key areas in which to build world class scientific and technological excellence, e.g., genomics, nanoscience, analytics, synthetic biology, information technology, space technology etc. 

Incentivizing innovation and IP creation is important for India’s future growth prospects. Enabling entrepreneurs to propel ideas into sustainable businesses will add value to our economy in the long run.

The government should give R&D a boost by providing a 10-year tax holiday on products developed indigenously, provide tax breaks for venture funding, and allow zero duty on R&D equipment.

Promote Green Technologies, Prudently Manage Natural Resources

The new government needs to leverage the power of biotechnology in promoting green technologies.

Energy independence must become a driving mantra to reduce our precarious balance of payments which is so vulnerable to the vagaries of fossil fuel resources.  If Brazil could achieve this through sugarcane based Biofuels, we can also aim to do so through newer forms of renewable energy that encompass solar, wind and biofuels that can light up the lives of energy-starved rural India.

Sanitation is another big challenge for India where only half the population have access to toilets.   We need rapid and large scale solutions based on bio-toilets that can eliminate the need for sewers, sanitation treatment plants and water. Innovative bioconversion systems can convert solid waste into renewable energy and fertilizers, eliminating landfills.

Water scarcity continues to threaten drought like conditions across the country posing grave challenges to our agrarian economy.  It is well known that India has a large perennial source of fresh water from the Himalayas, most of which remains unharnessed and wasted. The next Government must set up a  high-powered ministry that plans for the optimal management of water resources on a war footing to address the looming danger of widespread water scarcity. 

Make Healthcare a Priority

The new government will have to address the ‘Right to Health’ through a Universal healthcare program which hinges on affordability and access.

In attempting to fulfil the needs of ‘Affordability’, ‘Availability’ and ‘Access’ for its citizens, the new government has an opportunity for creating a system of universal healthcare that can set a global benchmark.

Additionally, other healthcare-related issues need to be urgently addressed as part of this agenda:

> FDI in Pharma: The FDI policy on pharma needs to revert to the previous UPA1 regime that allowed automatic infusion of foreign equity of up to 100% in both greenfield and brownfield projects, so that it is not left to the government’s discretion to introduce riders for clearing investment proposals.

> IPR: India must clearly enunciate the rules governing patentability for pharmaceutical products. Our stand on IP laws that discourage ever-greening of patents is gaining acceptance. We have also adopted a thoughtful pre-grant patent opposition which should serve to protect us from frivolous patents.  However, we must ensure that we demonstrate our commitment to legitimate patent protection. 

> Pricing policy: The unilateral demand on the Indian pharma industry to bear the full burden of making medicines affordable is untenable.  The imposition of price control on a large number of essential drugs has seen the replacement of a number of Indian bulk drugs with Chinese imports.  This policy needs urgent amendment if we are to restore our supremacy in drug manufacturing.   It is imperative that the Government increases public spending on healthcare to at least 3% of GDP in order to fund schemes that can offer basic healthcare to all.

> Clinical trials:  If India is to pursue drug research and drug innovation, the present moratorium on clinical trials must be removed post haste.  Additionally, the proposed regulations and strictures around conducting clinical trials need to be revisited.  Most of the regulatory recommendations are impractical and will severely disadvantage Indian drug research. 

> Incentives to spur R&D: To spur investment in research and development in life sciences,  the government should extend the current benefit of 200% weighted tax deduction on all in-house R&D spends including those attributable to  international patenting and overseas clinical development as well as any licensed technology that is required for drug innovation.

> Incentives to indigenous manufacturers:  The Indian Government has done little to advantage indigenous industry over foreign competition in Government tenders. It is well known that MNCs have always adopted predatory pricing in developing markets through cross subsidizing the higher prices they enjoy  in protected western markets. The Indian Government must therefore provide   preference and advantage to indigenously manufactured pharma products and in fact, mandate local manufacturing as an eligibility criterion as is the norm in many countries Eg. Mexico, Brazil, Russia etc. It is important to note that the Indian Government practises this in the case of vaccines but needs to extend this to drugs.

We Need Development-oriented Politics

The fundamentals of the Indian economy are strong.  However, our economic engines of growth have been throttled by wrong policies and regulations in the past.

The new government needs to exhibit strong political will to implement bold economic reforms, create world-class infrastructure, usher in overdue tax, labour, land and regulatory reforms, address the power deficit and roll back unfriendly business regulations.

The mandate for change must translate into a more enlightened and development-oriented political discourse in India that rises above partisan politics and instead focuses on putting the nation on the path to robust, inclusive and equitable growth.

This article first appeared as a feature in Forbes India on May 28th, 2014

Sunday, 18 May 2014

Reviving the Indian Growth Story

Image Courtesy: http://bit.ly/1oCEsYf

The decisive mandate in favour of Narendra Modi led BJP Govt reflects people’s overwhelming vote for change. Change in the way the country is administered; change in the way India does business; change in the way food is distributed; change in the way healthcare is delivered; and change in the way the government addresses the aspirations of a billion Indians. 

If the new government is serious about delivering on its promise of a better life for every single Indian, its No. 1 priority should be to navigate the country towards a path of sustainable and inclusive economic growth.

The new government will be starting off with economic “tailwinds”: inflation is showing signs of cooling; CAD has eased significantly; the rupee has stabilized; and GDP growth is expected to pick up pace in FY15 after two consecutive years of sub-5% growth.

However, there is no scope for complacency as significant challenges face the country.  Projects worth over $100 billion were shelved or abandoned in FY14, the highest in the past 18 years, due to policy uncertainty and pending regulatory clearances, according to CMIE. Capital goods production has contracted in nine of the past 12 months, according to latest government data.

The new government that comes to power will have to move quickly to de-bottleneck projects and revive investment sentiment in the country. India desperately needs to be seen taking corrective actions to regain its lost glory by creating an enabling ecosystem that paves the way for a double digit growth.

The prospect of a positive change by the new Government has already started reflecting in market sentiments. The Sensex has hit record highs as overseas investors are aggressively buying into Indian equities in the hope that a BJP-led coalition will take the steps necessary to boost consumer and investment demand that in turn will give a leg-up to economic growth. The Indian rupee is near a 10-month high. Concrete actions by the new government will help capitalize on this mood.

> Need for decisive action

In order to restore investor confidence the new government needs to introduce enabling policies as well as build the necessary infrastructure that supports the development agenda for the country across sectors.

Some critical steps the government needs to take to revive in the Indian economy are as follows:

> Smarter regulation for ease of doing business
 
The need of the hour is not more regulation but smarter regulation. The government needs to focus on a number of regulatory reforms that will address the ease of doing business, reduce transaction costs and expedite approval timelines.Currently, businesses need to secure a plethora of approvals and licenses from multiple agencies. We need to move away from over-regulation to a system of self-regulation. To make the system transparent and stakeholders accountable, we have to ensure that E-Governance becomes the backbone of regulation.  Moreover, the regulatory process should be re-engineered to replace the current system with ‘deemed approvals’ and ‘automatic approvals.’  A time-bound approvals system can help fast-track projects, businesses and start-ups, thus improving the business climate in the country. 

These measures alone can add a percent or two to GDP growth through increased FDI and project implementation.

> An efficient taxation system

The long-pending GST needs to implemented as an uniform tax on all goods and services across India is a key indirect tax reform that needs to see the light of day. There is also a need to exempt SEZs from MAT. 

> Remove bottlenecks to boost flow of foreign capital

A lack of clarity over laws regulating FDI in key sectors like multi-brand retail is preventing much-needed foreign money from coming in to bolster India’s infrastructure setup.  MNCs can help bring in technological knowhow and share best manufacturing practices with local companies, thus helping them upgrade their systems and processes.

> Build the necessary Infrastructure that supports industrial growth

All infrastructure projects which have been held up for long need to be cleared. The SEZ policy needs better implementation if it has to boost manufacturing and exports.

The government also needs to allow a longer tax free status for SEZs for the real benefits to kick in.  Broad banding in a pragmatic way should be allowed to unlock the full potential of this far reaching scheme.

Establishing industrial corridors through high-end road and rail connectivity that links metros to interior towns can spread economic growth and create job opportunities more uniformly across the country.

> Generate high-skilled jobs

There is an urgent need to create high-skilled jobs that add long-term value. Employment generation initiatives should focus on creating a large market for skilled jobs through building scale in high-end manufacturing. For this, the government needs to provide adequate incentives to the manufacturing sector. Incentives should also be given to encourage start-ups as they can contribute to the goal of employment generation. 

> Introduce a universal healthcare program

The ‘Right to Health’ should be addressed through a universal healthcare program which hinges on affordability and access. An IT enabled healthcare delivery model like that of Tamil Nadu has the potential to revolutionize various aspects of the industry. The implementation of an e-healthcare system at a national level can ensure fair and transparent delivery of affordably priced, good quality medicines to patients across the financially challenged socio-economic strata of India.

> Focus on Science & Technology, Incentivize Innovation

Science & Technology is of strategic importance to India’s future leadership. Innovation is key to value accretive growth and India needs to step up its investment in research and translational innovation.  We must identify key areas in which to build world class scientific and technological excellence, e.g., genomics, nanoscience, analytics, synthetic biology, information technology, space technology etc.  Incentivizing innovation and IP creation is important for India’s future growth prospects. Enabling entrepreneurs to propel ideas into sustainable businesses will add value to our economy in the long run.

In the final analysis, the new government needs to exhibit strong political will to implement bold economic reforms, create world-class infrastructure, usher in overdue tax, labour, land and regulatory reforms, address power woes and roll back unfriendly business regulations to return the India economy to a path of high growth in 2014.

Saturday, 17 May 2014

Congratulations to Narendra Modi: Let's Work Towards Prosperity

Image Courtesy: http://bit.ly/1mD4vMt
The landslide mandate handed to the Narendra Modi and BJP reflects India’s overwhelming desire for strong leadershIp that will drive change. Change in the way the country is administered; change in the way policies are framed; change in the way India does business; change in the way it engages with the world; and change in the way the government addresses the aspirations of a billion Indians.  These are tall expectations and the new government will need to take immediate steps to revive the economy to signal change. This will call for swift action to implement bold economic reforms that create jobs through massive infrastructure projects, roll back unfriendly business regulations and instead focus on speed and ease of doing business that attract large domestic and foreign investments. Above all, there is a compelling need to provide transparency and accountability through e-governance.

The new government has been provided a historic opportunity to bring positive and far-reaching change, it must do so with responsible objectivity that lifts the spirit of a billion Indians.

Friday, 16 May 2014

Agenda for The New Government

Image Courtesy: http://bit.ly/QPCEMz

The decisive mandate handed to the Narendra Modi-led BJP reflects India’s overwhelming desire for strong leadershIp that will drive change. Expectations are high from the new government, which will have to deliver on its promise of a better life for every single Indian. And the only way it can do so is by reviving the economy and putting Indian on a path of sustainable and equitable growth.

The Indian economy has stalled because of a sharp decline in investments. Policy uncertainty and pending regulatory clearances have put over $100 billion worth of projects in jeopardy. Capital goods production has contracted in nine of the past 12 months. Therefore, swift action is needed from the new government to de-bottleneck projects and revive investment sentiment in the country.

To begin with, the government will have to focus on regulatory reforms that will improve the ease of doing business, reduce transaction costs and expedite approval timelines.  There is thus an urgent need for a system of ‘deemed approvals’ and ‘automatic approvals.’ To attract FDI, the government will have to ensure fast-track project clearance and articulate unambiguous tax and compliance regulations.

Information technology needs to be leveraged optimally to make administrative governance in India transparent and stakeholders accountable. E-Governance should become the backbone of regulation. 

Science & Technology is of strategic importance to India’s future leadership and the new government will need to step up its investment in research and translational innovation. 

The government will also need to tackle India’s energy and water crises on a "war footing."

Increased investments in healthcare and education and greater involvement of the private sector can ensure effective and transparent delivery of the ‘Right to Health’ and ’Right to Education.’

The fundamentals of the Indian economy are strong.  However, our economic engines of growth have been throttled by wrong policies and regulations in the past.

The new government needs to exhibit strong political will to implement bold economic reforms, create world-class infrastructure, usher in overdue tax, labour, land and regulatory reforms, address the power deficit and roll back unfriendly business regulations.

The new government has been provided a historic opportunity to bring positive and far-reaching change, it cannot afford to belie the hopes of a billion Indians.