A chance to rejuvenate India’s healthcare sector

India’s response to the COVID-19 pandemic has been characterised as being amongst the most stringent, according to the Oxford COVID-19 Government Response Tracker. The country has been under lockdown since March 24, and given India’s inadequate health infrastructure, a stringent response had to be undertaken to contain the virus.

Several economists have suggested ways of managing the significant economic fallout that individuals and businesses have faced as a result of the extended lockdown. On May 12, Prime Minister Narendra Modi announced a Rs 20 Lakh crore economic package: While the package has targeted liquidity issues for MSMEs, due attention should also be given to the healthcare system, and the increasing strain it will face once the lockdown is lifted.

With the spotlight currently on India’s indigenous innovative capabilities in the fight against COVID-19, the time has come to boost India’s healthcare infrastructure and push for greater technology deepening in the healthcare sector.

Consider this: According to a Brookings study by Prachi Singh, Shamika Ravi and Sikim Chakraborty published in March 2020 and used data from the National Health Profile-2019, the total number of hospital beds in the country was 7,13,986 — which translates to 0.55 beds per 1,000 population. Furthermore, the study also highlighted that twelve states that account for 70 per cent of India’s 1.3 billion population were found to have hospital beds per 1,000 population below the national average of 0.55 beds. In terms of access and quality of health services, India was ranked 145 out of 195 countries in a Lancet study published in 2018, below countries like China (48), Sri Lanka (71) Bhutan (134) and Bangladesh (132).

India’s general government expenditure on healthcare as a percentage of GDP was just 1.0 per cent in 2017 according to WHO data, placing it at number 165 out of 186 countries in terms of government expenditure on healthcare.

Compounding this problem of poor health infrastructure and low spending, especially in the current environment that has caused significant disruptions to the global supply chains, is India’s dependence on medical devices imports.

According to the Association of Indian Medical Device Industry (AiMeD), India’s medical devices imports were around Rs 39,000 crore in FY2019, having seen a growth of 24 per cent from the previous year. These imports were said to account for around 80 per cent of India’s medical devices requirements, with the bulk of the devices coming from the US, China, Germany and Singapore.

Much of the data presented above highlights the fact that fighting any major health emergency let alone an outbreak of this magnitude was always going to be a tough task for India. It is important to note that India’s expenditure on R&D as a per cent of GDP has continued to remain stagnant at 0.7 per cent of GDP for three decades, with the public sector accounting for 51.8 per cent of the national R&D expenditure. Furthermore, while India’s public R&D expenditure on healthcare as a share of central government spending on R&D has increased to 5.5 per cent, a figure that is now comparable to that in Germany, it remains low compared to over 25 per cent in the US and around 9 per cent in Korea.

The structure of India’s healthcare industry means that India now needs to build on its competitive position in the pharmaceutical and biotechnology sector, where it has established a name for itself in delivering low-cost drugs and vaccines. The industry has been at the forefront globally in the fight against COVID-19, with medical supplies having been provided to over 120 countries. Given the massive industrial base and demand for healthcare in India, ramping up the spending on health infrastructure and healthcare R&D — with a focus on healthcare equipment and services — would surely aid in India’s economic recovery, by not only protecting the well-being of its citizens but also providing access to high quality and affordable healthcare equipment globally.

To build a robust health system for the future, focusing on India’s infrastructure and technology needs would require emphasising the triple helix model of innovation, that is, bringing together the government, academia and industry, now more than ever. To this end, the government of India has established a “COVID-19 Taskforce” with the objective of mapping together various technological advancements related to COVID-19 in public R&D labs, academia, start-ups, and industries. The task force has already identified over 500 entities in the fields of medicines, ventilators, protective gear, among others.

Several public-private partnerships and collaborations are already underway. The Defence Research and Development Organisation (DRDO) which has developed ventilators is collaborating with the industry to scale up production to 10,000 units per month. Nocca Robotics, a start-up incubated at the Indian Institute of Technology Kanpur, has entered into an agreement with Bharat Dynamics Ltd. (BDL), a public sector undertaking where the latter will be involved in the large-scale development of ventilators. Start-ups like Marut Dronetech are partnering with various state governments to employ drones to monitor adherence to social distancing norms.

The Pune-based startup, MyLab Discovery Solutions, has developed a cost-effective indigenous testing kit, Pathodetect, and has not only received approval from ICMR and CDSCO but has also been selected to receive financial assistance from the Technology Development Board to ramp up the manufacturing of these kits.

The Pathodetect test kit costs almost a quarter of the cost of kits from its international competitors and also provides the results in less than three hours compared to alternative testing kits that take up to seven-eight hours to provide results.

Better coordination of the various technological developments through greater synergy between the government, academia and industry concerning research and manufacturing, could help minimise the duplication of efforts. It could hence result in more effective use of resources at this time of crisis. As we move towards an eventual lockdown exit, several initiatives — such as those being undertaken by public R&D labs on plasma therapy and genome sequencing of SARS-CoV-2 by startups from IITs — need to be closely evaluated and provided necessary regulatory and funding support.

The new economic package that has been announced by the government should include a package for the healthcare industry of around Rs 2.1 lakh crore. The government should allocate around Rs 2 lakh crore towards boosting the country’s health infrastructure and around Rs 10,000 crore towards developing healthcare technologies that India would need to combat the spread of the virus once the lockdown is lifted.

The current funding landscape for collaborative research includes grants that vary from Rs 50 lakh to Rs 1 crore, depending on whether it is an early-stage proposal or a more advanced workable solution. The National Research Development Corporation (NRDC) offers financial support up to Rs 10 lakh for necessary infrastructure for researchers and innovators involved in the development of eco-friendly sanitisers, rapid test kits, PPEs, ventilators, medicines, and vaccines.

The Department of Science and Technology (DST) also set up a rapid response centre CAWACH – Centre for Augmenting WAR with COVID-19 Health Crisis – to provide support to 50 innovations and startups addressing various challenges posed by the pandemic. The scale of funding required however is significantly larger than what is currently available.

An important consideration here is, while increasing the amount of funding, there should also be the promotion of open innovation models. The open innovation model allows for the integration of an external knowledge talent pool with the in-built capabilities of a firm, thereby bringing together a network of collaborators involved in biomedical research and drug discovery.

This is a health crisis that is expected to stay with us for some time to come. The response to the pandemic offers an opportunity to bring about structural changes in India’s health policy, see greater technology deepening in the healthcare sector with a focus on healthcare equipment, reduce India’s dependence on imports of medical devices, and aid in India’s economic recovery.

Nabar and Singhania are with the Centre for Technology, Innovation and Economic Research (CTIER), Pune. Reddy and Sasidharan are with the Indian Institute of Technology Madras. Views are personal.

By Janak Nabar, Ketan Reddy, Dipti Singhania and Subash Sasidharan. – The Indian Express

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