Waning Motherhood - The Cursed Bliss in India

By Sheena Shafia

"Mothers Reflect God's loving presence on earth."

Motherhood is such a blessing in woman's life, that as a loving mother, she forgets her own self for the tender love of her dear ones and trains her children to virtue. The bond between a mother and her child is a powerful component in a child's life.

But mothers who die during childbirth or before the birth of a baby leave behind their never ending stories, their children and families and numerous reasons as to why their lives ended so early.

Every time a woman in the third world becomes pregnant, her risk of dying is 200 times higher than the risk run by a woman in the developed world. Approximately 30 million women in India experience pregnancy annually, and 27 million have live births. In India every one woman dies every 5 minutes from a pregnancy-related cause.

Maternal mortality is generally defined as the death of a woman during pregnancy or delivery, or within 42 days of the end of pregnancy from a pregnancy-related cause.

The maternal mortality ratio is nothing but the maternal death per 100,000 live births in one year. The maternal mortality ratio in India is somehow near about 267 (Urban estimation), rising to 619 in rural areas where as the developed countries in contrast have a maternal mortality ratio of around 20 per 100,000 live births.

Given the high maternal mortality rate in India, the women who lose their lives as a result of pregnancy and childbirth remain invisible in general. Therefore, reliable estimates of maternal mortality in India are not available. However, WHO estimates show that out of the 529,000 maternal deaths globally each year, 136,000(25.7%) are contributed by India, most of which can be prevented. This is the highest burden for any single country.

The indirect estimate done by Bhat (Maternal mortality in India: An update. Studies in Family planning, 2002) shows that MMR is higher in eastern and central regions and is lower in north-western and southern region. Similar picture is also shown by data collected under Sample registration system by Registrar General of India in 1997.

States with high maternal mortality include Rajasthan, Madhya Pradesh, Jharkhand, Orissa, Uttar Pradesh and Bihar.

The most common responsible causes of maternal deaths are hemorrhage (ante partum or post partum), eclampsia, pre-eclampsia, infection, obstructed and prolonged labour, complications of abortion, disorders related to high blood pressure and anaemia.
Causes of maternal death (%)

Haemorrhage 30
Anaemia 19
Sepsis 16
Obstructed labor 10
Abortion 8
Toxemia 8
Others 9

MAJOR CAUSE: Anaemia is one of the major causes of maternal mortality in India. It is noted painfully that after 61 years of independence India leads iron deficiency anaemia cases in the world and more than 90% of Indian women, adolescent girls and children are anaemic. Everyone is aware that anaemia results in physical weakness, mental shortcomings, low intelligence and increased vulnerability to a number of diseases and causes adverse pregnancy outcomes and even death of expectant mother. The anaemic mothers also bear anaemic children. The Ninth Plan envisaged universal screening for anaemia in pregnant women and appropriate use of IFA tablets is also indicated .But just like other plans and policies the programme had not been operationalised fully. In none of the states were services for anaemia included as a component of antenatal care. Data from Rapid Household Survey indicated that even iron folic acid consumption is still very Low. The target during the Tenth Plan was to make every effort to fully operationalise the Ninth Plan strategy for prevention and management of anaemia. But still now it has not faced much success. Only 22.3% of pregnant women consume Iron and Folic Acid supplementation for 90 days and the percentage is less than 10% among the non-educated women compared to 50% among the well-educated. Also the disparity between rural and urban areas is significant (18% and 34.5% respectively).

OTHER CAUSE: There are various other causes of maternal mortality. Eclampsia is one of them, which is a fallout of pregnancy-induced hypertension. This usually happens due to improper antenatal care. Hypertension during the course of pregnancy can ultimately culminate in convulsions. Eclampsia if not treated with care in time may lead to the death of the mother.

Another reason of maternal death is Haemorrhage. This may once again be caused by poor antenatal care, anaemia during pregnancies or during operative deliveries.

Obstructed or prolonged labour occurs when the foetus does not deliver in the anticipated time. This may be due to the wrong position of the foetus, if it is a too large a baby or if the pelvis of the mother is narrow. In urban India, obstructed labour is generally not among the primary causes of maternal deaths anymore but in rural India, due to lack of interest in institutional delivery it is still a cause of maternal deaths. Till now, in India only 43% of deliveries involve a skilled birth attendant compared to between 86% and 99% in Mexico, China, Sri Lanka, Brazil and Thailand.

Sepsis, another major cause of maternal deaths, may arise from infections, unsafe abortions, anaemia and improper care during pregnancy. Women who do not eat nutritious food during pregnancies are susceptible to infection. In rural, India this is one of the commonest causes of maternal deaths.

INTERMEDIATE CAUSE: They include the low social status of women, lack of awareness and knowledge at the household level, inadequate resources to seek care, and poor access to quality health care. Other causes are untimely diagnosis and treatment, poor skills and training of care providers, and prolonged waiting time at the facility due to lack of trained personnel, equipment and blood. The other prominent dark chapters of our society are the early age of marriage and child bearing, child spacing, family size and fertility patterns, literacy, socio-economic status and the and the customs and beliefs.

Under the Reproductive and child health (RCH)care programme efforts were made to improve the coverage, content and quality of antenatal care in order to achieve substantial reduction in maternal and perinatal morbidity and mortality.

In the ninth plan the antenatal and intra partum care contained features like,

* Early registration of pregnancy (12 - 16 weeks);
* Minimum three Ante-Natal Check-ups;
* Screening all pregnant women for major health, nutritional and obstetric problems;
* Identification of women with health problems/complications, providing prompt and effective treatment including referral wherever required;
* Universal coverage of all pregnant women with TT immunization;
* Screening for anaemia and providing IFA tablets to prevent anaemia;
* Advice on food, nutrition and rest;
* Promotion of institutional delivery / Safe deliveries by trained personnel etc.

But according to the Household Survey 1998-99 the actual scenario was something different. A ntenatal coverage in states with poor health indices such as UP, Bihar, MP was very low. Whereas in the southern states antenatal coverage was quite good.

The main problem areas of antenatal checkups lie herewith:

* Inadequate coverage; lack of trained health personnel in antenatal screening, risk identification and referral services;
* Over crowding in PHCs/hospitals
* Lack of Emergency Obstetric services etc
One of the major goals of Government of India's Department of Health and Family Welfare is to reduce maternal mortality and morbidity. The focus has shifted from individualized interventions to attention to the reproductive health care, which includes skilled attendance at birth, operationalising Referral Units and 24 hours delivery services at Primary Health Centres and initiation of Janani Suraksha Yojna (National Maternity Benefit Scheme).

Not only that, improving women's health require a strong and sustained government commitment, a favourable policy environment, and well-targeted resources. The government's strategy should include extended care to women whom government programs do not reach. The government of India has been making policy and programmatic statements time to time and setting goals of reducing maternal mortality.

Major policy and program goals in MM ( Maternal Mortality)

1983
Health policy statement by Govt of India
MMR reduction by 200-300 by 1990 and below 200 by the year 2000

2000
National population policy
MMR reduction to less than 100 by 2010

2002
National health policy
MMR reduction to less than 100 by 2010

2002-007
Tenth Five year plan
MMR reduction to less than 200 by 2007

The challenge for the government is to help direct and improve privately provided services through appropriate regulatory arrangements and by encouraging an expansion of their scope to include promotion and prevention, in addition to curative care.
The link between pregnancy-related care and maternal mortality is well established. National programmes and plans have already stressed on the need for universal screening of pregnant women and operationalising essential and emergency obstetric care. Focused antenatal care, birth preparedness and complication readiness, skilled attendance at birth, and access to emergency obstetric care are factors that can help reduce maternal mortality.

The mind boggling high maternal mortality rate in India can be reduced by following the strategies enumerated below:

* Effective initiative from the government is required in terms of proper allocation of resources to all the health institutions specially Primary Health Centers. Even more important is to ensure that the funds actually reach the users whenever it is needed.

* Early registration of antenatal cases and effective health education of couples to make them understand the importance of antenatal check ups, hospital deliveries and small family norms.

* Local dais / birth attendants and female health workers should be imparted periodic training to update themselves with improved techniques and be incorporated as an integral part of health care system. The importance of observing proper aseptic measures while conducting deliveries should be emphasized to them.

* Prevention and early treatment of infection, ante partum and postpartum hemorrhage.

* Wide spread availability / supply of Iron – Folic acid tablets and nutritious food to the poor and remotest corners of the country.

* Treatment of illnesses like diabetes, tuberculosis and malaria during pregnancy should be ensured.

* Construction of better roads and transport facilities is required especially in the rural areas and urban slums to make the health care facilities more available and accessible to people in need.

* Providing facilities for hospital deliveries for high risk cases like severe anaemia, hypertension, diabetes and heart disease.

In conclusion it can be said that, a maternal death is often not only a result of technical incompetence or negligence, but is also caused by ineffective health system and limited knowledge, social attitudes and poor health and midwife practices by the family and community itself. Since the health of mothers is directly related to a child's health and without due attention to the causes behind high maternal mortality ratios, we are simply ignoring an important determinant of the health of our nation. In doing so, maybe we are running the risk of damaging our chances for all-encompassing prosperity in future.

There's A Glaring Inequality Between Health Insurance Benefits Given To Men And Women

By NEWSCOP | INNLIVE

For the age group of 70 and above, for every claim paid to a woman, more than 11 were paid to men.

In the last five years, when there were major concerns over the country’s economic growth, the Indian health insurance industry was doing surprisingly well. In fact, it had been growing at more than double the rate of the overall economy, according to data from Insurance Regulatory and Development Authority.

Litmus Test For Chhattisgarh’s Public Health Care

Chhattisgarh is all set to allow private diagnostic centres at public health facilities within three months. Critics are appalled by the idea of business space for private players in public health facilities while supporters feel it will improve the pallid health care infrastructure in the State. 

The architect of the new model, J.P. Mishra, chief of the State Health Resource Centre — the State Health Department’s technical assistance body overseeing the project — is a strong proponent of public-private partnership. He spoke in an exclusive interview to INN defending private enterprise in public health.

Now that the bids are closed for private diagnostic centres vying to set up shop in Chhattisgarh’s government hospitals, can you give us a road map of how and when these centres are going to start operation?
A committee will be formed and bids will be opened by the committee in front of the bidders. By the end of the month we should be able to identify the laboratories [companies]. Then there will be an agreement between the companies and the government. The lab officials will visit the places [hospital and health facilities] and identify the spaces to be allotted to them. In terms and conditions, we have said that within a month of execution of agreement they should set up the labs. So by April-May first lot of labs should be operational, if everything goes right.

Why do you think this model of privatisation of public health infrastructure will improve health care?
This is public-private partnership [PPP], not privatisation of health care. Privatisation is selling of ownership. I am rather buying in, contracting in services. I am inviting the private sector to set up shop on my [premises].

Will this provide better health care?
Why not? Let me give you the example of Compfed, the Bihar milk cooperative. Throughout the 1990s they were making profit, unlike other PSUs of Bihar, because they perfected the art of outsourcing. They started giving incentive for good work and penalising [bad work]. Compfed gave incentives to truck operators for timely delivery of milk and penalised them for sloppy performance — the ‘bonus and penalty’ model. I tried that in health care

You have to understand the importance of outsourcing. If I can get something done cheaper, why should I be doing it myself? That is why the automobile industry outsources 70-80 per cent of production.

The automobile companies are driven by a motive of profit…
Profit is not the only motive, improving upon efficiency is. Yes, I would say my unit cost of providing the same services should become less. Today I have to employ a person or put up a machine regardless of how many people avail the services. Therefore, between a salaried person’s earnings and the work the person does, there is no built-in incentive for the person to be efficient.

Hence a ‘bonus and penalty’ model?
Let us take the example of PPP in diagnostics. The turnaround time [delivery of reports] has to be less than 24 hours for at least 95 per cent of the cases referred to the diagnostic centres by the hospitals.

If the labs manage to do that for a full year then they get an extension of one year. That is, now we are giving the diagnostic labs permission to operate for 10 years, it will be extended for one more year.

If they fail, the tenure will reduce to nine years or even less. That is a ‘bonus and penalty’ model.

How will you monitor this?
I had considered the idea of getting the NGOs involved.

One reason why PPP is getting questioned is because we have seen how the Bihar model of health care privatisation collapsed.

The Bihar model did not work because the qualifying criteria were very soft. Then they started with big players. The big players left because the government did not maintain its side of agreement. Payment was not regular. Even the existing players are thinking of going out. In Chhattisgarh, the payments for the patients referred by the hospitals are to be made by an autonomous body called Jeevandeep Samiti, located in the hospitals. One side of my job is to ensure that the laboratories work and on the other side I have to make sure that the payments are done on time.

In remote areas of Chhattisgarh you do not have adequate staff or equipment. So if the government could not manage to take health care to remote areas, why do you think the private parties will be able to do it?
I do not have a direct answer to that. All I can say [is] you will know after we open the bids, whether they are interested in setting shops in Bastar, Sarguja etc. I agree with you that for remote areas there is no alternative to government services. If you look at the focus, the vast majority [of labs] are to be set in difficult areas. [What] we are trying to do is to organise service delivery in such areas where there is no services. For that we can provide incentives to those who are willing to go to remote areas. And I might start only from Bastar and Sarguja. I am not here to make a profit for itself.

What about the diagnostic facilities already existing in the district hospitals? Are you going to shut those down?
It is not a question of shutting those down. It is not like everything is available everywhere and nothing is available in some places. Look at the package — X-Ray is excluded from [proposed private labs in] district hospitals and health facilities as it is available there.

What will happen to the laboratory staff in health facilities?
In some cases we have to redeploy the staff.

You cannot run a parallel lab if you have given it to a private player. So the lab technician has to be redeployed to a place where services are not given through PPP.

There are 500-odd PHCs where we do not have technicians.

That is, from district hospitals a person will go to remote areas?
I have not done that detailed an analysis. There could be a choice of a private player taking the person on deputation.

So in a way, these district hospitals are going to get affected?
To some extent. It has to be seen facility by facility. You cannot generalise.

What about the cost to public?
We will follow Central Government Health Services (CGHS) rates. And give a 10 per cent discount on that. CGHS rate are less than market rates and thus it compels the private players to reduce their rates. It has happened in Tamil Nadu. The money will come from Rashtriya Swasthya Bima Yojana (RSBY) and Mukhyamantri Swasthya Bima Yojana (MSBY) for in-patients. For outpatients, a part of it will come from Jeevandeep Samiti, paid for by the State government. And we have asked for a small amount from State budget for PPP services because we are asking the Jeevandeeps to pay for outpatient cases and they do not have a fund for that.

Three Overlooked Serious Reasons: Why India’s Healthcare Indicators Remain Abysmal?

The Union government wants to subsidise healthcare and at the same time cut health spending. Still, money is just part of the problem.

The Bharatiya Janata Party-led Central government announced in July that it would roll out a National Health Assurance Mission, whose aim would be to provide some free medical services to reduce “out of pocket spending on healthcare by the common man”.

Medical Industry Diagnosis: Triage for Health Care and New Vision for Life Sciences

By M H Ahssan

If inefficiency is the path to opportunity, the future for India's health care sector may be bright. Just how close that future is varies by market segment. In the case of life sciences, its arrival could coincide with industry participants' greater willingness to accept risk, while health insurance could seize its day amid rising treatment costs. As for health care delivery's chance to shine, that could be more in the distant future, stymied by a lack of infrastructure investment and trained professionals.

On the one hand, medical tourism is on the rise. On the other, tuberculosis seems unstoppable in certain states. "Paradox is one characterization," said Bhaven Sampat, professor of health care management at Columbia University. "But challenge is another. Like every rapidly developing country, India is faced with the challenge of how to manage growth with distribution, how to balance equity with efficiency, and how to ensure that as parts of the Indian health care sector enter the worldwide elite, the masses are not left behind."

An assessment of Indian health care reveals poor performance on the key dimensions of coverage, purchasing and delivery. "Despite India being the largest exporter of generics, most people have never seen a tablet," said Rajiv Gulati, director of India-China strategy at Eli Lilly. "Patients from the U.S. and the UK come to India for treatment, but approximately 70% of Indian patients have never seen a doctor."

'A Good and Sustainable Growth Rate'
But everything starts somewhere, and "despite the woefully inadequate infrastructure, the health care sector is growing at a compound annual growth rate of 15%, which is a good and sustainable growth rate due to the ever-widening gap between demand and supply," said Suneeta Reddy, finance director at Apollo Hospital Enterprises, a network of 41 hospitals with a combined 8,000 beds.

India has only 1.5 beds per thousand people, while China, Brazil, Thailand and Korea have an average of four beds per thousand people. Investments of $20 billion may be needed over the next five years to increase the availability of doctors and hospital beds. In the meantime, changing demographics and disease profiles, as well as rising treatment costs, may cause spending on health care delivery to double over the next 10 years. Reddy noted that one driver of this growth is "the move from chronic to lifestyle diseases. India is becoming the diabetic capital of the world and Indians have a predisposition to heart disease." Other drivers include a demand for tertiary care that had not existed before, medical tourism representing a $2.5 billion dollar opportunity, and the growth of preventive health care, she said.

In addition, consumers have become far more knowledgeable about what is available in the market and more demanding about quality and service. The typical Indian is looking at clinical outcomes, with a focus on success rates and infection control similar to those of their U.S. counterparts, Reddy said. Two-thirds of India's spending on health care is out-of-pocket, due in large part to an inefficient and inequitable coverage and prepayment system. Despite this, Reddy hopes that rapid growth in the insurance sector will "necessitate a credible provider network to grow simultaneously."

For now, though, the health care paradox is entrenched. In a nation of 250 million cell phone users, there are no statistics on immunization control, noted Prakash Khubchandani, founder and managing director of KrimsonHealth, a developer of healthcare infrastructure based in Mumbai. He linked this to the nation's acute shortage of medical professionals and stated that "if we can increase education levels to what we are gearing up for over the next decade, India can be the next health care superpower." However, education is not the only hindrance. Primary health care and immunization programs fall on the government, whose infrastructure is inadequate. Forty percent of primary health centers are understaffed. Asked whether this was a technical issue or a matter of priorities, Khubchandani pointed to a "lack of private-public partnerships, policy regulations and proper regulatory authorities."

Reversal of the Brain Drain
Yet whereas the lack of opportunity often takes people overseas to find their careers, "the brain drain process is being reversed at a very rapid pace," Khubchandani said. "In the past, India lacked the education and paying capacity and people often went abroad to make the right kind of money." He noted the experience of a 750-bed hospital being built in Mumbai. Owing to the shortage of domestic professionals, foreign doctors are eligible to apply. To make the move to India more attractive, foreign doctors are offered amenities, including apartments, and are guaranteed five-year contracts.

"The lack of professionals directly correlates to the number of colleges, which are extremely few and difficult to set up," Reddy said. "Health is a state subject and therefore government permission is required for the setup of any medical or nursing facilities. This is a dichotomy that needs to be addressed in order to meet India's health care aspirations." That said, India offers an attractive value proposition for doctors based abroad. Its private-sector infrastructure and clinical outcomes match those of developed nations. Patient volumes are large, living standards are comparable and, most important, doctors don't need to set aside large amounts of their salary for legal insurance.

To stimulate a more universal growth and radically improve the quality of health care, the panelists added, the government needs to encourage private investment, define and enforce minimum standards for health care facilities, facilitate the supply of quality manpower, support the growth of insurance, and reform the government's role as payor and provider.

For many years, health insurers were reluctant to enter the business because of a one billion rupee capital requirement and unattractive market conditions. However, recognizing that the government would be unable to cover a population of 1.2 billion people, a bill was passed encouraging investment in the private health insurance sector and relaxing capital requirements. "But it's a complex industry that is fraught with issues," Reddy noted. "In the U.S., providers deal with corporate hospitals such as HCA and Tenet, while in India they have to deal with nursing homes that don't follow any standardized reporting procedures." This is changing as new hospitals that enter the sector look to protect their brand.

An Untapped Population
Tapping a population that has never been insured before in a market with a 35% compound annual growth rate opens the door for opportunity, Reddy said. "With this growth, there has to be a credible risk management framework. Institutions are publishing clinical protocols and insurance companies are looking at this data. Earlier, there was no actuarial data for people to price their products, but with the data now available, private insurance will offer many more products and we will see a growth in this sector."

Khubchandani was not as optimistic. He focused his argument on the inefficient coverage of the middle class and those in rural India. Over the last few years, the government has introduced several programs to subsidize villagers but "this will only increase the problem because the trickle down to the grassroots level of money is so bureaucratically dodged that the end consumer doesn't receive much," he said. "That is going to be the tremendous challenge; I don't see how foreign insurance companies are going to deal with this level of corruption."

Additionally, many Indians have shied away from medical insurance policies because of lengthy and costly claims processing. Reddy, however, believes that, in the future, "patients will not have access to hospital care without insurance claims as treatment costs continue to rise." Health insurance, she added, "was subsidized for a long time and the loss ratio was 200%. Currently the loss ratio on corporate health care is 100% while retail is only 60%. People are realizing that they need to be honest and hospitals are recognizing that they need to be transparent if they wish to get their money back to make this system work."

On the provider side, panelists said, more efficient delivery can be achieved by giving greater autonomy to government hospitals, forming public-private partnerships and focusing government effort on public health and rural primary care. There has been a distinct shift from public to private health care over the last decade; patients turn to private providers for most of their needs because doctors and medicines are more easily available and the quality of care is better.

Khubchandani said his group has been exploring partnerships with public hospitals, which often are mismanaged and lack adequate infrastructure, manpower or equipment to sustain patient volumes. "The red tape is so colossal that it is incredibly difficult to do these kinds of partnerships without government policies in place. There has to be an effective way to get around this roadblock." Reddy said the private sector will spur the necessary changes. "There are clear inefficiencies in the public sector, such as technology absorption, lack of adequate reward for doctors, lower quality of clinical outcomes, and absence of right to second opinion," she noted. "The private sector addresses these issues. You can't blame patients for wanting to access better levels of care."

A Need to Embrace Risk in Life Sciences
If the future of health care delivery in India remains a still-distant promise, little more than a change of mind-set stands in the way of the life sciences sector. Cost and competitive pressures on Big Pharma and India's strengths as a low-cost location combine to present huge opportunities, according to panelists at the Harvard Business School India Conference. They advised India's life sciences entrepreneurs to shed their "service" mind-set and embrace risk, while tapping into the emerging "innovation ecosystem."

Rashmi Barbhaiya, CEO of Advinus Therapeutics, a research-based pharmaceutical company in Bangalore and Pune, noted that Indian life sciences entrepreneurs "generally like to follow rather than do something different and take risks." While Indian pharmaceutical companies have demonstrated their success with generic drugs, he said, they have to make the transition from being a service provider to being an innovator. He added that he's often asked about the challenges Indian companies face from their Chinese counterparts. "When India makes the transition from service to innovation, U.S., Japanese or European companies will come to India, and [India] will not have to worry about China."

Shiladitya Sengupta, a professor at Harvard Medical School, said he doesn't like seeing "90% of research dollars go to 10% of the population." From his point of view, technology is the key to providing affordable health care to the five billion people "at the bottom of the pyramid." Sengupta encountered skeptics when he helped found Tempo Pharmaceuticals, which uses proprietary nanocell technology to create medicines at a fraction of the price of branded products. Tempo, which licenses its nanocell technology from the labs of cofounder Ram Sasisekharan, a Massachusetts Institute of Technology professor, has an asthma drug that will go into trials next year, and the company has raised $22 million in venture capital.

Tempo's asthma drug uses off-patent ingredients to lower production costs to about a tenth of that for Advair, a $4 billion GlaxoSmithKline brand that is the market leader, Sengupta said. Tempo is currently developing nanobiology-based drugs for oncology, rheumatoid arthritis, atherosclerosis, inflammatory bowel disease and other diseases.

From Bench to Bedside to Market
Health care solutions for underserved markets like those in India should not just be affordable and accessible, but also "translatable and scalable from bench to bedside and to market," Sengupta noted. In another venture, he is working on developing low-cost diagnostic kits for markets such as India. "A glucose meter costs about $350 in the U.S.; a hemoglobin injection kit costs $50 to $100. You have to actually price it at 20 cents. Those are business opportunities."

A survey of India's research and academic infrastructure conducted by Sengupta to support the development of new drugs and medical devices yielded a list of 300 universities and "a similar number of national institutes of excellence," but without any connectivity. Subsequently, he brought together heads of universities and government officials to create a strategy for collaboration and new institutions.

Within two years of launching this effort, Sengupta won Indian government approval to set up two organizations -- the Translational Institute for Health Science and Technology and the UNESCO University of Biotechnology, which received funding from the United Nations agency. Among the institutions in the pipeline over the next five years are a stem cell institute, four national institutes of pharmaceutical sciences, a national institute of medical genetics, an animal biotechnology institute, a marine biotechnology institute, three molecular medicine centers and an agri-food biotechnology center, he said.

According to Sengupta, India currently needs 5,000 PhDs annually but produces only 1,500, "most of whom are of questionable quality." He said he and his colleagues have identified areas of need in teaching, R&D, testing and validation, manufacturing, regulation and marketing. The talent needs include biologists, medicinal chemists, molecular biologists and organic chemists, he noted.

From Generics and Low Costs to Development
Rakesh Bamzai, president of marketing at Biocon, a biotechnology company in Bangalore, said new doors opened for the Indian life sciences industry three years ago after the Trade Related Intellectual Property Rights agreement brought India's patent laws closer to those of the United States and Europe. "Over the years, India has focused a lot on generics, big volumes and low-cost manufacturing," he said. "But after 2005, people are looking at more and more development. Research is still a big dream for companies in India, but development is a reality."

Bamzai said India is also emerging as a big market for clinical development. Biotech and pharmaceutical companies, he added, are extending product life cycles by looking at the development of other indications of existing products.

Already, India has emerged as a dominant player in many pharmaceutical segments. According to Bamzai, Biocon is the world's fourth-largest producer of human insulin; Biocon and Wockhardt, another Indian pharmaceutical company, make India the third-largest producer of human insulin. India is also the "leading maker of anti-diabetes drugs; we have a 20% market share in anti-retrovirals and a 40% share in hypercholesterol drugs," he added.

India's R&D labs are also cranking up 30% of the abbreviated new drug application filings in the United States, he said. And they file half the "drug master files" -- submissions to the U.S. Food and Drug Administration with information about facilities, processes or articles used in the manufacture and storage of drugs.

Indian companies also have 40 to 50 new chemical entities under development, said panelist Anuradha Acharya,CEO of Ocimum Biosolutions, which has offices in Indianapolis and Hyderabad. She described her firm as a "global genomics outsourcing partner for discovery, development and diagnostics" for pharmaceutical companies. She said more than three-fourths of the top 50 pharmaceutical companies are doing clinical development in India.

Besides supplying the developed world, Indian pharmaceutical companies are successfully tapping markets in Syria, Iraq, Iran, Azerbaijan and Algeria, Bamzai said. "If you see the [profit-and-loss statements] of companies that are doing well in India, it is because they are doing better in these countries. The values are higher and entry barriers are low in these markets."

Spotting Opportunities in Big Pharma's Challenges
Acharya, who returned to India from the United States to found Ocimum in 2000, has already made three international acquisitions --Gene Logic Genomics in the United States, Isogen Life Science in the Netherlands and the genomic diagnosis business of MWG Biotech in Germany. Previously financed by the International Finance Corp., the World Bank's private equity arm, Ocimum recently raised $17 million in venture capital.

"It's the big firms that are feeling the pressure and that pressure is becoming opportunity for companies like us," Acharya said, adding that the Indian cost arbitrage opportunity "is still a big attraction." Preclinical trial costs in India are about a tenth of what they are in developed countries, while clinical trials could be done for half the cost, she noted, citing research by Rabo Finance of the Dutch Rabobank Group.

According to Acharya, the top drivers for Indian life sciences companies are drugs going off patent, workforce reductions at Big Pharma companies, and the advance of "personalized," genomics-based medicine. Also creating opportunities are such trends as a shift in focus from "treating sickness to preventing sickness," pharmaceutical companies' preference for being "virtually integrated" rather than fully integrated, and a change in mind-set from being "U.S. centric to global centric."

As for seizing such opportunities, Barbhaiya of Advinus Therapeutics said that rather than adopting a "Just Do It" philosophy, it would be better to be able to say, "Just Done It." He reminded the students in the audience that, "If a non-MBA like me can do it, I am sure you all can do it as well."

Medical Industry Diagnosis: Triage for Health Care and New Vision for Life Sciences

By M H Ahssan

If inefficiency is the path to opportunity, the future for India's health care sector may be bright. Just how close that future is varies by market segment. In the case of life sciences, its arrival could coincide with industry participants' greater willingness to accept risk, while health insurance could seize its day amid rising treatment costs. As for health care delivery's chance to shine, that could be more in the distant future, stymied by a lack of infrastructure investment and trained professionals.

On the one hand, medical tourism is on the rise. On the other, tuberculosis seems unstoppable in certain states. "Paradox is one characterization," said Bhaven Sampat, professor of health care management at Columbia University and panel moderator. "But challenge is another. Like every rapidly developing country, India is faced with the challenge of how to manage growth with distribution, how to balance equity with efficiency, and how to ensure that as parts of the Indian health care sector enter the worldwide elite, the masses are not left behind."

An assessment of Indian health care reveals poor performance on the key dimensions of coverage, purchasing and delivery. "Despite India being the largest exporter of generics, most people have never seen a tablet," said Rajiv Gulati, director of India-China strategy at Eli Lilly. "Patients from the U.S. and the UK come to India for treatment, but approximately 70% of Indian patients have never seen a doctor."

'A Good and Sustainable Growth Rate'
But everything starts somewhere, and "despite the woefully inadequate infrastructure, the health care sector is growing at a compound annual growth rate of 15%, which is a good and sustainable growth rate due to the ever-widening gap between demand and supply," said Suneeta Reddy, finance director at Apollo Hospital Enterprises, a network of 41 hospitals with a combined 8,000 beds.

India has only 1.5 beds per thousand people, while China, Brazil, Thailand and Korea have an average of four beds per thousand people. Investments of $20 billion may be needed over the next five years to increase the availability of doctors and hospital beds. In the meantime, changing demographics and disease profiles, as well as rising treatment costs, may cause spending on health care delivery to double over the next 10 years. Reddy noted that one driver of this growth is "the move from chronic to lifestyle diseases. India is becoming the diabetic capital of the world and Indians have a predisposition to heart disease." Other drivers include a demand for tertiary care that had not existed before, medical tourism representing a $2.5 billion dollar opportunity, and the growth of preventive health care, she said.

In addition, consumers have become far more knowledgeable about what is available in the market and more demanding about quality and service. The typical Indian is looking at clinical outcomes, with a focus on success rates and infection control similar to those of their U.S. counterparts, Reddy said. Two-thirds of India's spending on health care is out-of-pocket, due in large part to an inefficient and inequitable coverage and prepayment system. Despite this, Reddy hopes that rapid growth in the insurance sector will "necessitate a credible provider network to grow simultaneously."

For now, though, the health care paradox is entrenched. In a nation of 250 million cell phone users, there are no statistics on immunization control, noted Prakash Khubchandani, founder and managing director of KrimsonHealth, a developer of healthcare infrastructure based in Mumbai. He linked this to the nation's acute shortage of medical professionals and stated that "if we can increase education levels to what we are gearing up for over the next decade, India can be the next health care superpower." However, education is not the only hindrance. Primary health care and immunization programs fall on the government, whose infrastructure is inadequate. Forty percent of primary health centers are understaffed. Asked whether this was a technical issue or a matter of priorities, Khubchandani pointed to a "lack of private-public partnerships, policy regulations and proper regulatory authorities."

Reversal of the Brain Drain
Yet whereas the lack of opportunity often takes people overseas to find their careers, "the brain drain process is being reversed at a very rapid pace," Khubchandani said. "In the past, India lacked the education and paying capacity and people often went abroad to make the right kind of money." He noted the experience of a 750-bed hospital being built in Mumbai. Owing to the shortage of domestic professionals, foreign doctors are eligible to apply. To make the move to India more attractive, foreign doctors are offered amenities, including apartments, and are guaranteed five-year contracts.

"The lack of professionals directly correlates to the number of colleges, which are extremely few and difficult to set up," Reddy said. "Health is a state subject and therefore government permission is required for the setup of any medical or nursing facilities. This is a dichotomy that needs to be addressed in order to meet India's health care aspirations." That said, India offers an attractive value proposition for doctors based abroad. Its private-sector infrastructure and clinical outcomes match those of developed nations. Patient volumes are large, living standards are comparable and, most important, doctors don't need to set aside large amounts of their salary for legal insurance.

To stimulate a more universal growth and radically improve the quality of health care, the panelists added, the government needs to encourage private investment, define and enforce minimum standards for health care facilities, facilitate the supply of quality manpower, support the growth of insurance, and reform the government's role as payor and provider.

For many years, health insurers were reluctant to enter the business because of a one billion rupee capital requirement and unattractive market conditions. However, recognizing that the government would be unable to cover a population of 1.2 billion people, a bill was passed encouraging investment in the private health insurance sector and relaxing capital requirements. "But it's a complex industry that is fraught with issues," Reddy noted. "In the U.S., providers deal with corporate hospitals such as HCA and Tenet, while in India they have to deal with nursing homes that don't follow any standardized reporting procedures." This is changing as new hospitals that enter the sector look to protect their brand.

An Untapped Population
Tapping a population that has never been insured before in a market with a 35% compound annual growth rate opens the door for opportunity, Reddy said. "With this growth, there has to be a credible risk management framework. Institutions are publishing clinical protocols and insurance companies are looking at this data. Earlier, there was no actuarial data for people to price their products, but with the data now available, private insurance will offer many more products and we will see a growth in this sector."

Khubchandani was not as optimistic. He focused his argument on the inefficient coverage of the middle class and those in rural India. Over the last few years, the government has introduced several programs to subsidize villagers but "this will only increase the problem because the trickle down to the grassroots level of money is so bureaucratically dodged that the end consumer doesn't receive much," he said. "That is going to be the tremendous challenge; I don't see how foreign insurance companies are going to deal with this level of corruption."

Additionally, many Indians have shied away from medical insurance policies because of lengthy and costly claims processing. Reddy, however, believes that, in the future, "patients will not have access to hospital care without insurance claims as treatment costs continue to rise." Health insurance, she added, "was subsidized for a long time and the loss ratio was 200%. Currently the loss ratio on corporate health care is 100% while retail is only 60%. People are realizing that they need to be honest and hospitals are recognizing that they need to be transparent if they wish to get their money back to make this system work."

On the provider side, panelists said, more efficient delivery can be achieved by giving greater autonomy to government hospitals, forming public-private partnerships and focusing government effort on public health and rural primary care. There has been a distinct shift from public to private health care over the last decade; patients turn to private providers for most of their needs because doctors and medicines are more easily available and the quality of care is better.

Khubchandani said his group has been exploring partnerships with public hospitals, which often are mismanaged and lack adequate infrastructure, manpower or equipment to sustain patient volumes. "The red tape is so colossal that it is incredibly difficult to do these kinds of partnerships without government policies in place. There has to be an effective way to get around this roadblock." Reddy said the private sector will spur the necessary changes. "There are clear inefficiencies in the public sector, such as technology absorption, lack of adequate reward for doctors, lower quality of clinical outcomes, and absence of right to second opinion," she noted. "The private sector addresses these issues. You can't blame patients for wanting to access better levels of care."

A Need to Embrace Risk in Life Sciences
If the future of health care delivery in India remains a still-distant promise, little more than a change of mind-set stands in the way of the life sciences sector. Cost and competitive pressures on Big Pharma and India's strengths as a low-cost location combine to present huge opportunities, according to panelists at the Harvard Business School India Conference. They advised India's life sciences entrepreneurs to shed their "service" mind-set and embrace risk, while tapping into the emerging "innovation ecosystem."

Rashmi Barbhaiya, CEO of Advinus Therapeutics, a research-based pharmaceutical company in Bangalore and Pune, noted that Indian life sciences entrepreneurs "generally like to follow rather than do something different and take risks." While Indian pharmaceutical companies have demonstrated their success with generic drugs, he said, they have to make the transition from being a service provider to being an innovator. He added that he's often asked about the challenges Indian companies face from their Chinese counterparts. "When India makes the transition from service to innovation, U.S., Japanese or European companies will come to India, and [India] will not have to worry about China."

Shiladitya Sengupta, a professor at Harvard Medical School, said he doesn't like seeing "90% of research dollars go to 10% of the population." From his point of view, technology is the key to providing affordable health care to the five billion people "at the bottom of the pyramid." Sengupta encountered skeptics when he helped found Tempo Pharmaceuticals, which uses proprietary nanocell technology to create medicines at a fraction of the price of branded products. Tempo, which licenses its nanocell technology from the labs of cofounder Ram Sasisekharan, a Massachusetts Institute of Technology professor, has an asthma drug that will go into trials next year, and the company has raised $22 million in venture capital.

Tempo's asthma drug uses off-patent ingredients to lower production costs to about a tenth of that for Advair, a $4 billion GlaxoSmithKline brand that is the market leader, Sengupta said. Tempo is currently developing nanobiology-based drugs for oncology, rheumatoid arthritis, atherosclerosis, inflammatory bowel disease and other diseases.

From Bench to Bedside to Market
Health care solutions for underserved markets like those in India should not just be affordable and accessible, but also "translatable and scalable from bench to bedside and to market," Sengupta noted. In another venture, he is working on developing low-cost diagnostic kits for markets such as India. "A glucose meter costs about $350 in the U.S.; a hemoglobin injection kit costs $50 to $100. You have to actually price it at 20 cents. Those are business opportunities."

A survey of India's research and academic infrastructure conducted by Sengupta to support the development of new drugs and medical devices yielded a list of 300 universities and "a similar number of national institutes of excellence," but without any connectivity. Subsequently, he brought together heads of universities and government officials to create a strategy for collaboration and new institutions.

Within two years of launching this effort, Sengupta won Indian government approval to set up two organizations -- the Translational Institute for Health Science and Technology and the UNESCO University of Biotechnology, which received funding from the United Nations agency. Among the institutions in the pipeline over the next five years are a stem cell institute, four national institutes of pharmaceutical sciences, a national institute of medical genetics, an animal biotechnology institute, a marine biotechnology institute, three molecular medicine centers and an agri-food biotechnology center, he said.

According to Sengupta, India currently needs 5,000 PhDs annually but produces only 1,500, "most of whom are of questionable quality." He said he and his colleagues have identified areas of need in teaching, R&D, testing and validation, manufacturing, regulation and marketing. The talent needs include biologists, medicinal chemists, molecular biologists and organic chemists, he noted.

From Generics and Low Costs to Development
Rakesh Bamzai, president of marketing at Biocon, a biotechnology company in Bangalore, said new doors opened for the Indian life sciences industry three years ago after the Trade Related Intellectual Property Rights agreement brought India's patent laws closer to those of the United States and Europe. "Over the years, India has focused a lot on generics, big volumes and low-cost manufacturing," he said. "But after 2005, people are looking at more and more development. Research is still a big dream for companies in India, but development is a reality."

Bamzai said India is also emerging as a big market for clinical development. Biotech and pharmaceutical companies, he added, are extending product life cycles by looking at the development of other indications of existing products.

Already, India has emerged as a dominant player in many pharmaceutical segments. According to Bamzai, Biocon is the world's fourth-largest producer of human insulin; Biocon and Wockhardt, another Indian pharmaceutical company, make India the third-largest producer of human insulin. India is also the "leading maker of anti-diabetes drugs; we have a 20% market share in anti-retrovirals and a 40% share in hypercholesterol drugs," he added.

India's R&D labs are also cranking up 30% of the abbreviated new drug application filings in the United States, he said. And they file half the "drug master files" -- submissions to the U.S. Food and Drug Administration with information about facilities, processes or articles used in the manufacture and storage of drugs.

Indian companies also have 40 to 50 new chemical entities under development, said panelist Anuradha Acharya,CEO of Ocimum Biosolutions, which has offices in Indianapolis and Hyderabad. She described her firm as a "global genomics outsourcing partner for discovery, development and diagnostics" for pharmaceutical companies. She said more than three-fourths of the top 50 pharmaceutical companies are doing clinical development in India.

Besides supplying the developed world, Indian pharmaceutical companies are successfully tapping markets in Syria, Iraq, Iran, Azerbaijan and Algeria, Bamzai said. "If you see the [profit-and-loss statements] of companies that are doing well in India, it is because they are doing better in these countries. The values are higher and entry barriers are low in these markets."

Spotting Opportunities in Big Pharma's Challenges
Acharya, who returned to India from the United States to found Ocimum in 2000, has already made three international acquisitions --Gene Logic Genomics in the United States, Isogen Life Science in the Netherlands and the genomic diagnosis business of MWG Biotech in Germany. Previously financed by the International Finance Corp., the World Bank's private equity arm, Ocimum recently raised $17 million in venture capital.

"It's the big firms that are feeling the pressure and that pressure is becoming opportunity for companies like us," Acharya said, adding that the Indian cost arbitrage opportunity "is still a big attraction." Preclinical trial costs in India are about a tenth of what they are in developed countries, while clinical trials could be done for half the cost, she noted, citing research by Rabo Finance of the Dutch Rabobank Group.

According to Acharya, the top drivers for Indian life sciences companies are drugs going off patent, workforce reductions at Big Pharma companies, and the advance of "personalized," genomics-based medicine. Also creating opportunities are such trends as a shift in focus from "treating sickness to preventing sickness," pharmaceutical companies' preference for being "virtually integrated" rather than fully integrated, and a change in mind-set from being "U.S. centric to global centric."

As for seizing such opportunities, Barbhaiya of Advinus Therapeutics said that rather than adopting a "Just Do It" philosophy, it would be better to be able to say, "Just Done It." He reminded the students in the audience that, "If a non-MBA like me can do it, I am sure you all can do it as well."

Medical Industry Diagnosis: Triage for Health Care and New Vision for Life Sciences

By M H Ahssan

If inefficiency is the path to opportunity, the future for India's health care sector may be bright. Just how close that future is varies by market segment. In the case of life sciences, its arrival could coincide with industry participants' greater willingness to accept risk, while health insurance could seize its day amid rising treatment costs. As for health care delivery's chance to shine, that could be more in the distant future, stymied by a lack of infrastructure investment and trained professionals.

On the one hand, medical tourism is on the rise. On the other, tuberculosis seems unstoppable in certain states. "Paradox is one characterization," said Bhaven Sampat, professor of health care management at Columbia University and panel moderator. "But challenge is another. Like every rapidly developing country, India is faced with the challenge of how to manage growth with distribution, how to balance equity with efficiency, and how to ensure that as parts of the Indian health care sector enter the worldwide elite, the masses are not left behind."

An assessment of Indian health care reveals poor performance on the key dimensions of coverage, purchasing and delivery. "Despite India being the largest exporter of generics, most people have never seen a tablet," said Rajiv Gulati, director of India-China strategy at Eli Lilly. "Patients from the U.S. and the UK come to India for treatment, but approximately 70% of Indian patients have never seen a doctor."

'A Good and Sustainable Growth Rate'
But everything starts somewhere, and "despite the woefully inadequate infrastructure, the health care sector is growing at a compound annual growth rate of 15%, which is a good and sustainable growth rate due to the ever-widening gap between demand and supply," said Suneeta Reddy, finance director at Apollo Hospital Enterprises, a network of 41 hospitals with a combined 8,000 beds.

India has only 1.5 beds per thousand people, while China, Brazil, Thailand and Korea have an average of four beds per thousand people. Investments of $20 billion may be needed over the next five years to increase the availability of doctors and hospital beds. In the meantime, changing demographics and disease profiles, as well as rising treatment costs, may cause spending on health care delivery to double over the next 10 years. Reddy noted that one driver of this growth is "the move from chronic to lifestyle diseases. India is becoming the diabetic capital of the world and Indians have a predisposition to heart disease." Other drivers include a demand for tertiary care that had not existed before, medical tourism representing a $2.5 billion dollar opportunity, and the growth of preventive health care, she said.

In addition, consumers have become far more knowledgeable about what is available in the market and more demanding about quality and service. The typical Indian is looking at clinical outcomes, with a focus on success rates and infection control similar to those of their U.S. counterparts, Reddy said. Two-thirds of India's spending on health care is out-of-pocket, due in large part to an inefficient and inequitable coverage and prepayment system. Despite this, Reddy hopes that rapid growth in the insurance sector will "necessitate a credible provider network to grow simultaneously."

For now, though, the health care paradox is entrenched. In a nation of 250 million cell phone users, there are no statistics on immunization control, noted Prakash Khubchandani, founder and managing director of KrimsonHealth, a developer of healthcare infrastructure based in Mumbai. He linked this to the nation's acute shortage of medical professionals and stated that "if we can increase education levels to what we are gearing up for over the next decade, India can be the next health care superpower." However, education is not the only hindrance. Primary health care and immunization programs fall on the government, whose infrastructure is inadequate. Forty percent of primary health centers are understaffed. Asked whether this was a technical issue or a matter of priorities, Khubchandani pointed to a "lack of private-public partnerships, policy regulations and proper regulatory authorities."

Reversal of the Brain Drain
Yet whereas the lack of opportunity often takes people overseas to find their careers, "the brain drain process is being reversed at a very rapid pace," Khubchandani said. "In the past, India lacked the education and paying capacity and people often went abroad to make the right kind of money." He noted the experience of a 750-bed hospital being built in Mumbai. Owing to the shortage of domestic professionals, foreign doctors are eligible to apply. To make the move to India more attractive, foreign doctors are offered amenities, including apartments, and are guaranteed five-year contracts.

"The lack of professionals directly correlates to the number of colleges, which are extremely few and difficult to set up," Reddy said. "Health is a state subject and therefore government permission is required for the setup of any medical or nursing facilities. This is a dichotomy that needs to be addressed in order to meet India's health care aspirations." That said, India offers an attractive value proposition for doctors based abroad. Its private-sector infrastructure and clinical outcomes match those of developed nations. Patient volumes are large, living standards are comparable and, most important, doctors don't need to set aside large amounts of their salary for legal insurance.

To stimulate a more universal growth and radically improve the quality of health care, the panelists added, the government needs to encourage private investment, define and enforce minimum standards for health care facilities, facilitate the supply of quality manpower, support the growth of insurance, and reform the government's role as payor and provider.

For many years, health insurers were reluctant to enter the business because of a one billion rupee capital requirement and unattractive market conditions. However, recognizing that the government would be unable to cover a population of 1.2 billion people, a bill was passed encouraging investment in the private health insurance sector and relaxing capital requirements. "But it's a complex industry that is fraught with issues," Reddy noted. "In the U.S., providers deal with corporate hospitals such as HCA and Tenet, while in India they have to deal with nursing homes that don't follow any standardized reporting procedures." This is changing as new hospitals that enter the sector look to protect their brand.

An Untapped Population
Tapping a population that has never been insured before in a market with a 35% compound annual growth rate opens the door for opportunity, Reddy said. "With this growth, there has to be a credible risk management framework. Institutions are publishing clinical protocols and insurance companies are looking at this data. Earlier, there was no actuarial data for people to price their products, but with the data now available, private insurance will offer many more products and we will see a growth in this sector."

Khubchandani was not as optimistic. He focused his argument on the inefficient coverage of the middle class and those in rural India. Over the last few years, the government has introduced several programs to subsidize villagers but "this will only increase the problem because the trickle down to the grassroots level of money is so bureaucratically dodged that the end consumer doesn't receive much," he said. "That is going to be the tremendous challenge; I don't see how foreign insurance companies are going to deal with this level of corruption."

Additionally, many Indians have shied away from medical insurance policies because of lengthy and costly claims processing. Reddy, however, believes that, in the future, "patients will not have access to hospital care without insurance claims as treatment costs continue to rise." Health insurance, she added, "was subsidized for a long time and the loss ratio was 200%. Currently the loss ratio on corporate health care is 100% while retail is only 60%. People are realizing that they need to be honest and hospitals are recognizing that they need to be transparent if they wish to get their money back to make this system work."

On the provider side, panelists said, more efficient delivery can be achieved by giving greater autonomy to government hospitals, forming public-private partnerships and focusing government effort on public health and rural primary care. There has been a distinct shift from public to private health care over the last decade; patients turn to private providers for most of their needs because doctors and medicines are more easily available and the quality of care is better.

Khubchandani said his group has been exploring partnerships with public hospitals, which often are mismanaged and lack adequate infrastructure, manpower or equipment to sustain patient volumes. "The red tape is so colossal that it is incredibly difficult to do these kinds of partnerships without government policies in place. There has to be an effective way to get around this roadblock." Reddy said the private sector will spur the necessary changes. "There are clear inefficiencies in the public sector, such as technology absorption, lack of adequate reward for doctors, lower quality of clinical outcomes, and absence of right to second opinion," she noted. "The private sector addresses these issues. You can't blame patients for wanting to access better levels of care."

A Need to Embrace Risk in Life Sciences
If the future of health care delivery in India remains a still-distant promise, little more than a change of mind-set stands in the way of the life sciences sector. Cost and competitive pressures on Big Pharma and India's strengths as a low-cost location combine to present huge opportunities, according to panelists at the Harvard Business School India Conference. They advised India's life sciences entrepreneurs to shed their "service" mind-set and embrace risk, while tapping into the emerging "innovation ecosystem."

Rashmi Barbhaiya, CEO of Advinus Therapeutics, a research-based pharmaceutical company in Bangalore and Pune, noted that Indian life sciences entrepreneurs "generally like to follow rather than do something different and take risks." While Indian pharmaceutical companies have demonstrated their success with generic drugs, he said, they have to make the transition from being a service provider to being an innovator. He added that he's often asked about the challenges Indian companies face from their Chinese counterparts. "When India makes the transition from service to innovation, U.S., Japanese or European companies will come to India, and [India] will not have to worry about China."

Shiladitya Sengupta, a professor at Harvard Medical School, said he doesn't like seeing "90% of research dollars go to 10% of the population." From his point of view, technology is the key to providing affordable health care to the five billion people "at the bottom of the pyramid." Sengupta encountered skeptics when he helped found Tempo Pharmaceuticals, which uses proprietary nanocell technology to create medicines at a fraction of the price of branded products. Tempo, which licenses its nanocell technology from the labs of cofounder Ram Sasisekharan, a Massachusetts Institute of Technology professor, has an asthma drug that will go into trials next year, and the company has raised $22 million in venture capital.

Tempo's asthma drug uses off-patent ingredients to lower production costs to about a tenth of that for Advair, a $4 billion GlaxoSmithKline brand that is the market leader, Sengupta said. Tempo is currently developing nanobiology-based drugs for oncology, rheumatoid arthritis, atherosclerosis, inflammatory bowel disease and other diseases.

From Bench to Bedside to Market
Health care solutions for underserved markets like those in India should not just be affordable and accessible, but also "translatable and scalable from bench to bedside and to market," Sengupta noted. In another venture, he is working on developing low-cost diagnostic kits for markets such as India. "A glucose meter costs about $350 in the U.S.; a hemoglobin injection kit costs $50 to $100. You have to actually price it at 20 cents. Those are business opportunities."

A survey of India's research and academic infrastructure conducted by Sengupta to support the development of new drugs and medical devices yielded a list of 300 universities and "a similar number of national institutes of excellence," but without any connectivity. Subsequently, he brought together heads of universities and government officials to create a strategy for collaboration and new institutions.

Within two years of launching this effort, Sengupta won Indian government approval to set up two organizations -- the Translational Institute for Health Science and Technology and the UNESCO University of Biotechnology, which received funding from the United Nations agency. Among the institutions in the pipeline over the next five years are a stem cell institute, four national institutes of pharmaceutical sciences, a national institute of medical genetics, an animal biotechnology institute, a marine biotechnology institute, three molecular medicine centers and an agri-food biotechnology center, he said.

According to Sengupta, India currently needs 5,000 PhDs annually but produces only 1,500, "most of whom are of questionable quality." He said he and his colleagues have identified areas of need in teaching, R&D, testing and validation, manufacturing, regulation and marketing. The talent needs include biologists, medicinal chemists, molecular biologists and organic chemists, he noted.

From Generics and Low Costs to Development
Rakesh Bamzai, president of marketing at Biocon, a biotechnology company in Bangalore, said new doors opened for the Indian life sciences industry three years ago after the Trade Related Intellectual Property Rights agreement brought India's patent laws closer to those of the United States and Europe. "Over the years, India has focused a lot on generics, big volumes and low-cost manufacturing," he said. "But after 2005, people are looking at more and more development. Research is still a big dream for companies in India, but development is a reality."

Bamzai said India is also emerging as a big market for clinical development. Biotech and pharmaceutical companies, he added, are extending product life cycles by looking at the development of other indications of existing products.

Already, India has emerged as a dominant player in many pharmaceutical segments. According to Bamzai, Biocon is the world's fourth-largest producer of human insulin; Biocon and Wockhardt, another Indian pharmaceutical company, make India the third-largest producer of human insulin. India is also the "leading maker of anti-diabetes drugs; we have a 20% market share in anti-retrovirals and a 40% share in hypercholesterol drugs," he added.

India's R&D labs are also cranking up 30% of the abbreviated new drug application filings in the United States, he said. And they file half the "drug master files" -- submissions to the U.S. Food and Drug Administration with information about facilities, processes or articles used in the manufacture and storage of drugs.

Indian companies also have 40 to 50 new chemical entities under development, said panelist Anuradha Acharya,CEO of Ocimum Biosolutions, which has offices in Indianapolis and Hyderabad. She described her firm as a "global genomics outsourcing partner for discovery, development and diagnostics" for pharmaceutical companies. She said more than three-fourths of the top 50 pharmaceutical companies are doing clinical development in India.

Besides supplying the developed world, Indian pharmaceutical companies are successfully tapping markets in Syria, Iraq, Iran, Azerbaijan and Algeria, Bamzai said. "If you see the [profit-and-loss statements] of companies that are doing well in India, it is because they are doing better in these countries. The values are higher and entry barriers are low in these markets."

Spotting Opportunities in Big Pharma's Challenges
Acharya, who returned to India from the United States to found Ocimum in 2000, has already made three international acquisitions --Gene Logic Genomics in the United States, Isogen Life Science in the Netherlands and the genomic diagnosis business of MWG Biotech in Germany. Previously financed by the International Finance Corp., the World Bank's private equity arm, Ocimum recently raised $17 million in venture capital.

"It's the big firms that are feeling the pressure and that pressure is becoming opportunity for companies like us," Acharya said, adding that the Indian cost arbitrage opportunity "is still a big attraction." Preclinical trial costs in India are about a tenth of what they are in developed countries, while clinical trials could be done for half the cost, she noted, citing research by Rabo Finance of the Dutch Rabobank Group.

According to Acharya, the top drivers for Indian life sciences companies are drugs going off patent, workforce reductions at Big Pharma companies, and the advance of "personalized," genomics-based medicine. Also creating opportunities are such trends as a shift in focus from "treating sickness to preventing sickness," pharmaceutical companies' preference for being "virtually integrated" rather than fully integrated, and a change in mind-set from being "U.S. centric to global centric."

As for seizing such opportunities, Barbhaiya of Advinus Therapeutics said that rather than adopting a "Just Do It" philosophy, it would be better to be able to say, "Just Done It." He reminded the students in the audience that, "If a non-MBA like me can do it, I am sure you all can do it as well."

Medical Industry Diagnosis: Triage for Health Care and New Vision for Life Sciences

By M H Ahssan

If inefficiency is the path to opportunity, the future for India's health care sector may be bright. Just how close that future is varies by market segment. In the case of life sciences, its arrival could coincide with industry participants' greater willingness to accept risk, while health insurance could seize its day amid rising treatment costs. As for health care delivery's chance to shine, that could be more in the distant future, stymied by a lack of infrastructure investment and trained professionals.

On the one hand, medical tourism is on the rise. On the other, tuberculosis seems unstoppable in certain states. "Paradox is one characterization," said Bhaven Sampat, professor of health care management at Columbia University and panel moderator. "But challenge is another. Like every rapidly developing country, India is faced with the challenge of how to manage growth with distribution, how to balance equity with efficiency, and how to ensure that as parts of the Indian health care sector enter the worldwide elite, the masses are not left behind."

An assessment of Indian health care reveals poor performance on the key dimensions of coverage, purchasing and delivery. "Despite India being the largest exporter of generics, most people have never seen a tablet," said Rajiv Gulati, director of India-China strategy at Eli Lilly. "Patients from the U.S. and the UK come to India for treatment, but approximately 70% of Indian patients have never seen a doctor."

'A Good and Sustainable Growth Rate'
But everything starts somewhere, and "despite the woefully inadequate infrastructure, the health care sector is growing at a compound annual growth rate of 15%, which is a good and sustainable growth rate due to the ever-widening gap between demand and supply," said Suneeta Reddy, finance director at Apollo Hospital Enterprises, a network of 41 hospitals with a combined 8,000 beds.

India has only 1.5 beds per thousand people, while China, Brazil, Thailand and Korea have an average of four beds per thousand people. Investments of $20 billion may be needed over the next five years to increase the availability of doctors and hospital beds. In the meantime, changing demographics and disease profiles, as well as rising treatment costs, may cause spending on health care delivery to double over the next 10 years. Reddy noted that one driver of this growth is "the move from chronic to lifestyle diseases. India is becoming the diabetic capital of the world and Indians have a predisposition to heart disease." Other drivers include a demand for tertiary care that had not existed before, medical tourism representing a $2.5 billion dollar opportunity, and the growth of preventive health care, she said.

In addition, consumers have become far more knowledgeable about what is available in the market and more demanding about quality and service. The typical Indian is looking at clinical outcomes, with a focus on success rates and infection control similar to those of their U.S. counterparts, Reddy said. Two-thirds of India's spending on health care is out-of-pocket, due in large part to an inefficient and inequitable coverage and prepayment system. Despite this, Reddy hopes that rapid growth in the insurance sector will "necessitate a credible provider network to grow simultaneously."

For now, though, the health care paradox is entrenched. In a nation of 250 million cell phone users, there are no statistics on immunization control, noted Prakash Khubchandani, founder and managing director of KrimsonHealth, a developer of healthcare infrastructure based in Mumbai. He linked this to the nation's acute shortage of medical professionals and stated that "if we can increase education levels to what we are gearing up for over the next decade, India can be the next health care superpower." However, education is not the only hindrance. Primary health care and immunization programs fall on the government, whose infrastructure is inadequate. Forty percent of primary health centers are understaffed. Asked whether this was a technical issue or a matter of priorities, Khubchandani pointed to a "lack of private-public partnerships, policy regulations and proper regulatory authorities."

Reversal of the Brain Drain
Yet whereas the lack of opportunity often takes people overseas to find their careers, "the brain drain process is being reversed at a very rapid pace," Khubchandani said. "In the past, India lacked the education and paying capacity and people often went abroad to make the right kind of money." He noted the experience of a 750-bed hospital being built in Mumbai. Owing to the shortage of domestic professionals, foreign doctors are eligible to apply. To make the move to India more attractive, foreign doctors are offered amenities, including apartments, and are guaranteed five-year contracts.

"The lack of professionals directly correlates to the number of colleges, which are extremely few and difficult to set up," Reddy said. "Health is a state subject and therefore government permission is required for the setup of any medical or nursing facilities. This is a dichotomy that needs to be addressed in order to meet India's health care aspirations." That said, India offers an attractive value proposition for doctors based abroad. Its private-sector infrastructure and clinical outcomes match those of developed nations. Patient volumes are large, living standards are comparable and, most important, doctors don't need to set aside large amounts of their salary for legal insurance.

To stimulate a more universal growth and radically improve the quality of health care, the panelists added, the government needs to encourage private investment, define and enforce minimum standards for health care facilities, facilitate the supply of quality manpower, support the growth of insurance, and reform the government's role as payor and provider.

For many years, health insurers were reluctant to enter the business because of a one billion rupee capital requirement and unattractive market conditions. However, recognizing that the government would be unable to cover a population of 1.2 billion people, a bill was passed encouraging investment in the private health insurance sector and relaxing capital requirements. "But it's a complex industry that is fraught with issues," Reddy noted. "In the U.S., providers deal with corporate hospitals such as HCA and Tenet, while in India they have to deal with nursing homes that don't follow any standardized reporting procedures." This is changing as new hospitals that enter the sector look to protect their brand.

An Untapped Population
Tapping a population that has never been insured before in a market with a 35% compound annual growth rate opens the door for opportunity, Reddy said. "With this growth, there has to be a credible risk management framework. Institutions are publishing clinical protocols and insurance companies are looking at this data. Earlier, there was no actuarial data for people to price their products, but with the data now available, private insurance will offer many more products and we will see a growth in this sector."

Khubchandani was not as optimistic. He focused his argument on the inefficient coverage of the middle class and those in rural India. Over the last few years, the government has introduced several programs to subsidize villagers but "this will only increase the problem because the trickle down to the grassroots level of money is so bureaucratically dodged that the end consumer doesn't receive much," he said. "That is going to be the tremendous challenge; I don't see how foreign insurance companies are going to deal with this level of corruption."

Additionally, many Indians have shied away from medical insurance policies because of lengthy and costly claims processing. Reddy, however, believes that, in the future, "patients will not have access to hospital care without insurance claims as treatment costs continue to rise." Health insurance, she added, "was subsidized for a long time and the loss ratio was 200%. Currently the loss ratio on corporate health care is 100% while retail is only 60%. People are realizing that they need to be honest and hospitals are recognizing that they need to be transparent if they wish to get their money back to make this system work."

On the provider side, panelists said, more efficient delivery can be achieved by giving greater autonomy to government hospitals, forming public-private partnerships and focusing government effort on public health and rural primary care. There has been a distinct shift from public to private health care over the last decade; patients turn to private providers for most of their needs because doctors and medicines are more easily available and the quality of care is better.

Khubchandani said his group has been exploring partnerships with public hospitals, which often are mismanaged and lack adequate infrastructure, manpower or equipment to sustain patient volumes. "The red tape is so colossal that it is incredibly difficult to do these kinds of partnerships without government policies in place. There has to be an effective way to get around this roadblock." Reddy said the private sector will spur the necessary changes. "There are clear inefficiencies in the public sector, such as technology absorption, lack of adequate reward for doctors, lower quality of clinical outcomes, and absence of right to second opinion," she noted. "The private sector addresses these issues. You can't blame patients for wanting to access better levels of care."

A Need to Embrace Risk in Life Sciences
If the future of health care delivery in India remains a still-distant promise, little more than a change of mind-set stands in the way of the life sciences sector. Cost and competitive pressures on Big Pharma and India's strengths as a low-cost location combine to present huge opportunities, according to panelists at the Harvard Business School India Conference. They advised India's life sciences entrepreneurs to shed their "service" mind-set and embrace risk, while tapping into the emerging "innovation ecosystem."

Rashmi Barbhaiya, CEO of Advinus Therapeutics, a research-based pharmaceutical company in Bangalore and Pune, noted that Indian life sciences entrepreneurs "generally like to follow rather than do something different and take risks." While Indian pharmaceutical companies have demonstrated their success with generic drugs, he said, they have to make the transition from being a service provider to being an innovator. He added that he's often asked about the challenges Indian companies face from their Chinese counterparts. "When India makes the transition from service to innovation, U.S., Japanese or European companies will come to India, and [India] will not have to worry about China."

Shiladitya Sengupta, a professor at Harvard Medical School, said he doesn't like seeing "90% of research dollars go to 10% of the population." From his point of view, technology is the key to providing affordable health care to the five billion people "at the bottom of the pyramid." Sengupta encountered skeptics when he helped found Tempo Pharmaceuticals, which uses proprietary nanocell technology to create medicines at a fraction of the price of branded products. Tempo, which licenses its nanocell technology from the labs of cofounder Ram Sasisekharan, a Massachusetts Institute of Technology professor, has an asthma drug that will go into trials next year, and the company has raised $22 million in venture capital.

Tempo's asthma drug uses off-patent ingredients to lower production costs to about a tenth of that for Advair, a $4 billion GlaxoSmithKline brand that is the market leader, Sengupta said. Tempo is currently developing nanobiology-based drugs for oncology, rheumatoid arthritis, atherosclerosis, inflammatory bowel disease and other diseases.

From Bench to Bedside to Market
Health care solutions for underserved markets like those in India should not just be affordable and accessible, but also "translatable and scalable from bench to bedside and to market," Sengupta noted. In another venture, he is working on developing low-cost diagnostic kits for markets such as India. "A glucose meter costs about $350 in the U.S.; a hemoglobin injection kit costs $50 to $100. You have to actually price it at 20 cents. Those are business opportunities."

A survey of India's research and academic infrastructure conducted by Sengupta to support the development of new drugs and medical devices yielded a list of 300 universities and "a similar number of national institutes of excellence," but without any connectivity. Subsequently, he brought together heads of universities and government officials to create a strategy for collaboration and new institutions.

Within two years of launching this effort, Sengupta won Indian government approval to set up two organizations -- the Translational Institute for Health Science and Technology and the UNESCO University of Biotechnology, which received funding from the United Nations agency. Among the institutions in the pipeline over the next five years are a stem cell institute, four national institutes of pharmaceutical sciences, a national institute of medical genetics, an animal biotechnology institute, a marine biotechnology institute, three molecular medicine centers and an agri-food biotechnology center, he said.

According to Sengupta, India currently needs 5,000 PhDs annually but produces only 1,500, "most of whom are of questionable quality." He said he and his colleagues have identified areas of need in teaching, R&D, testing and validation, manufacturing, regulation and marketing. The talent needs include biologists, medicinal chemists, molecular biologists and organic chemists, he noted.

From Generics and Low Costs to Development
Rakesh Bamzai, president of marketing at Biocon, a biotechnology company in Bangalore, said new doors opened for the Indian life sciences industry three years ago after the Trade Related Intellectual Property Rights agreement brought India's patent laws closer to those of the United States and Europe. "Over the years, India has focused a lot on generics, big volumes and low-cost manufacturing," he said. "But after 2005, people are looking at more and more development. Research is still a big dream for companies in India, but development is a reality."

Bamzai said India is also emerging as a big market for clinical development. Biotech and pharmaceutical companies, he added, are extending product life cycles by looking at the development of other indications of existing products.

Already, India has emerged as a dominant player in many pharmaceutical segments. According to Bamzai, Biocon is the world's fourth-largest producer of human insulin; Biocon and Wockhardt, another Indian pharmaceutical company, make India the third-largest producer of human insulin. India is also the "leading maker of anti-diabetes drugs; we have a 20% market share in anti-retrovirals and a 40% share in hypercholesterol drugs," he added.

India's R&D labs are also cranking up 30% of the abbreviated new drug application filings in the United States, he said. And they file half the "drug master files" -- submissions to the U.S. Food and Drug Administration with information about facilities, processes or articles used in the manufacture and storage of drugs.

Indian companies also have 40 to 50 new chemical entities under development, said panelist Anuradha Acharya,CEO of Ocimum Biosolutions, which has offices in Indianapolis and Hyderabad. She described her firm as a "global genomics outsourcing partner for discovery, development and diagnostics" for pharmaceutical companies. She said more than three-fourths of the top 50 pharmaceutical companies are doing clinical development in India.

Besides supplying the developed world, Indian pharmaceutical companies are successfully tapping markets in Syria, Iraq, Iran, Azerbaijan and Algeria, Bamzai said. "If you see the [profit-and-loss statements] of companies that are doing well in India, it is because they are doing better in these countries. The values are higher and entry barriers are low in these markets."

Spotting Opportunities in Big Pharma's Challenges
Acharya, who returned to India from the United States to found Ocimum in 2000, has already made three international acquisitions --Gene Logic Genomics in the United States, Isogen Life Science in the Netherlands and the genomic diagnosis business of MWG Biotech in Germany. Previously financed by the International Finance Corp., the World Bank's private equity arm, Ocimum recently raised $17 million in venture capital.

"It's the big firms that are feeling the pressure and that pressure is becoming opportunity for companies like us," Acharya said, adding that the Indian cost arbitrage opportunity "is still a big attraction." Preclinical trial costs in India are about a tenth of what they are in developed countries, while clinical trials could be done for half the cost, she noted, citing research by Rabo Finance of the Dutch Rabobank Group.

According to Acharya, the top drivers for Indian life sciences companies are drugs going off patent, workforce reductions at Big Pharma companies, and the advance of "personalized," genomics-based medicine. Also creating opportunities are such trends as a shift in focus from "treating sickness to preventing sickness," pharmaceutical companies' preference for being "virtually integrated" rather than fully integrated, and a change in mind-set from being "U.S. centric to global centric."

As for seizing such opportunities, Barbhaiya of Advinus Therapeutics said that rather than adopting a "Just Do It" philosophy, it would be better to be able to say, "Just Done It." He reminded the students in the audience that, "If a non-MBA like me can do it, I am sure you all can do it as well."