1. Delivering healthcare in India: How to overcome barriers to innovation

Delivering healthcare in India: How to overcome barriers to innovation

With the declaration of the National Health Policy (NHP) 2017 and its intent to make universal health coverage (UHC) a reality, millions of people will flood into a healthcare system already strained by rising costs and a short supply of physicians, nurses and other resources.

By: | Published: June 29, 2017 5:22 AM
healthcare, healthcare industry, healthcare industry in india, Delivering healthcare in India, healthcare barriers, universal health coverage, drug price control, Pharmaceutical, AMR, diagnostic, medical device Research for new drugs & new diseases won’t happen if we don’t recognise R&D costs and value outcomes they deliver. (Image: PTI)

Finding innovative ways to deliver healthcare in India has never been more important than it is today. With the declaration of the National Health Policy (NHP) 2017 and its intent to make universal health coverage (UHC) a reality, millions of people will flood into a healthcare system already strained by rising costs and a short supply of physicians, nurses and other resources. Reining in healthcare costs is crucial if the government is to deal with a long-term budget deficit that is spiralling out of control and help patients manage catastrophic health events that drive families into the poverty cycle due to healthcare expenses that must be paid out of pocket. How will an increasing number of people get quality care at a cost that the nation can afford? The answer is innovation. Unlike many other industries, healthcare has remained highly fragmented, with little health insurance coverage, a mostly out-of-pocket payment system and little regard for quality of care. The NHP 2017 looks at creative ways to make UHC a reality and proposes bringing together the government, the private sector and other stakeholders.

Also critical are respect for intellectual property (IP) and increased investment for research. We need the government to incentivise research for new medicines and promote a robust IP environment that recognises the significant investment in research needed to bring new products from the lab to the patient. One primary method the government chooses to manage rising healthcare costs has been drug price control. However, a 2015 IMS study showed that price control on drugs does not increase access for those in need and actually has adverse effects on drug availability. Pharmaceutical firms may exit a therapeutic category due to low profits, and low profits may also act as an entry barrier for new firms.

Another report by IIM Ahmedabad, on whether drug price control increases access, concludes that there was a significant decrease in sales volume post price control, indicating decreased access. Research for new drugs, for existing and new diseases, will not happen if we don’t recognise research and development costs for new drugs and value the outcomes they deliver. We urgently need new drugs to address emerging threats like anti-microbial resistance (AMR), as patients fail to respond to the usual antibiotic treatments. Efforts in the development of new antibiotics have essentially been stalled due to economic, regulatory and scientific obstacles. Of the 18 largest pharmaceutical companies, 15 have abandoned the antibiotic field.

For healthcare to be of better quality and more affordable, innovation is required on various fronts. This includes changing how patients and consumers buy and use healthcare, using technology to develop new products and treatments, and generating new business models that involve the horizontal or vertical integration of separate healthcare organisations. Innovation can result in more convenient, more effective and less expensive treatments for today’s time-strapped and empowered patients. It can reduce travel time and waiting time, and make communication better, stronger and more relevant. Technology can be a huge enabler for new drugs, diagnostic methods, drug delivery systems and medical devices, offering the hope of better treatment and care that is less costly, disruptive and painful.

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Our healthcare system has several barriers to innovation. These obstacles can be overcome by managing the various factors that have an impact on healthcare innovation. Physicians working in small practices, hospitals and nursing homes are standalone, and the diagnostic, medical device and biotechnology sectors are made up of thousands of small firms. Therefore, innovative business models that integrate healthcare activities can increase efficiency, improve care and save time.

Innovation in healthcare presents two kinds of financial challenges: funding the innovation itself and then figuring out who will pay how much for the product or service it yields. A major problem is the long investment time needed for new drugs or therapies. The meagre investment from the government adds to the magnitude of the problem. Government regulation of healthcare can sometimes aid innovation (HIV drugs) and at other times hinder it—difficulties in registering new drugs and a weak IP environment.

A single-payer system (through public healthcare) hinders patient-focused innovation and seriously constrains technology-based innovation. The government’s need to strictly control costs translates into less money for the care of the truly sick, who are the biggest beneficiaries of most technology-based innovations.

For innovation to thrive, the NHP 2017 needs to be inclusive and provide a level-playing field for all stakeholders, including the patients. It has to focus on an enabling environment and increase investments, not only for the provision of care, but also for research, including drug discovery, behavioural and economic influencers, and disruptive low-cost models that function outside the public delivery system.

Author is CEO, DakshamA Health & Education.

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