Inclusive Growth in Healthcare Sector - Can Government?

Nowhere is the idea of innovation for inclusive growth more important than in Healthcare.Budget 2011 has let down the healthcare sector,which has not seen anything concrete beyond the increase in allocation and the extension of health insurance to NREGA workers.Instead of taking important measures such as extending health insurance to all and augmenting the healthcare infrastructure and expanding an integrated healthcare system to ensure affordable and accessible healthcare,the government opts to bring services in air-conditioned hospitals into the tax net.While the proposal has been rolled back owing to protests,the step indicates a disturbing mindset.It appears to suggest that the common Indian must be excluded from any improvement in her life.The government must bear in mind that air-conditioning in hospitals is a necessity and not a luxury: it is required for a functioning operation theatre,it is needed for quality diagnostics.By its decision,the government seems to be condemning the Mango People to go to a hospital with substandard infrastructure.Instead,the government can focus on creating a health insurance policy that can help the Mango people afford a good quality private hospital one that is air-conditioned.

To make the promise of inclusive growth a reality,Government,in Partenrship with Industry,must adopt a metrics-driven approach,Aggressive Reforms Incetivise R&D in healthcare sector and not be deterred by any compulsion,political or otherwise.The solution lies in political will and robust leadership at all levels of the Industry and government.

Where is the Pharmaceutical Industry Heading?

When is the last time we heard about a new drug discovery in the Indian pharma industry? Being the world's second-largest market by volume [13%], the Indian Pharmaceutical Industry is likely to lead the manufacturing sector of India in a few years' time. With the introduction of the Patents Act in 1970 by which the composition patents from food and drugs were removed, the multinational companies streamed out of the market due to lack of patent protection and the Indian firms flourished from then on. However, there are certain grave concerns that pull back the growth momentum of the industry.
Despite the fact that a huge proportion of the world's active pharmaceutical ingredients (API) come from India, the Indian pharmaceutical industry has been haunted by a culture of compliance problems, fraud and endangering patient's lives. Professionalism and ethics have taken a backseat in the growing industry of late. Inadequate regulation and large quantities of spurious drugs have been a problem for the industry since ages.

One of the main inadequacy of the Indian pharma industry is the lack of Research and Development support. An underdeveloped new molecule discovery program has been noted as its primary weakness. Even the market leaders such as Ranbaxy and Dr. Reddy's Laboratories spent only 5-10 percent of their revenues on R&D whereas the western pharmaceuticals like Pfizer sets a research budget greater than the combined revenues of the entire Indian pharmaceutical industry.

The country also lacks way behind in qualified molecular biologists when compared to the western industry. Due to the disconnect between curriculum and industry, pharmas in India also lack the academic collaboration that is crucial to drug development in the West.

Biotech plays a big role and acts as pharma's little sister in India. The Indian biotech market is dominated by biopharmaceuticals; 75 percent of 2004-5 revenues came from biopharmaceuticals, which saw 30% growth last year. Inadequate funding for the biotech sector poses a major challenge for the startups in India. The major sources of funds are the government grants and venture capital for the industry. While government grants are difficult to secure, the venture capitalists hesitate to invest due to the expensive and uncertain character of the industry in India.

As in many other industries, the Indian pharmaceutical industry too is witnessing a reverse brain drain of late, and the industry should move forward with the knowledge and experience of these foreign-trained scientists and with the abundance young talents within the country.