IIMB Management Review (2013) 25, 49e62

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ROUND TABLE

Ethical issues in health care sector in India

Chirantan Chatterjee, Vasanthi Srinivasan*

HR/OB, Indian Institute of Management, Bannerghatta Road, Bangalore, India

KEYWORDS Abstract The issue of ethics and economic efficiency in the provisioning and delivery of
Health care; services becomes complex in the Indian context where health indicators are poor. In an
Ethics; attempt to explore this issue, this round table article first provides an overview of the field
Efficiency; of ethics in health care, the health care sector in India and its facilities, the key institutional
Emerging economy; actors and finally, the key ethical issues concerning the different players in health care e the
India physician, the bio-pharmaceutical industry, and the chemist. In its second part, the article
reports on a discussion of the issues with a panel of experts across geographic and organisa-
tional settings.
ª 2012 Indian Institute of Management Bangalore. Production and hosting by Elsevier Ltd. All
rights reserved.

Academic perspective with the idea that some people should be denied access to
health care that might relieve their suffering or save their
Health care institutions across the world are facing chal- lives because they cannot pay for it (Enthoven, 1993). In the
lenges in the delivery and provisioning of services with Indian context, where health indicators of the country are
financial solvency. Patient care now competes with poor, the discourse on ethics assumes greater complexity
the financial solvency of the health care institutions and requires a more nuanced understanding and apprecia-
(Silverman, 2000), and the issue of ethics has become more tion of the contextual elements. This note attempts to
relevant than at any other point in time. Health care provide a brief overview of the field of ethics in health care,
services have a special moral quality. The purposes of health the status of the health care sector in India, the key insti-
care services include saving lives, preventing or relieving tutional actors and finally, the key ethical issues arising out
suffering, preventing and curing disease and disability, and of the interactions across the various actors.
ameliorating the consequences of disease when it cannot be
prevented or cured. Few people can be morally comfortable Ethics and health care

The field of medical ethics has long existed, arising from

* Corresponding author. Tel.: þ91 80 26993046.
E-mail address: vasanthi@iimb.ernet.in (V. Srinivasan). the Hippocrates oath, and tenets of the early religious
Peer-review under responsibility of Indian Institute of Management healing traditions of the West. Several Asian traditions have
Bangalore also had ethical tenets governing the physicianepatient
relationship (Tsai, 1999; Desai, 1988). In the field of
contemporary medical ethics, the doctors in the USA were
the first to develop a modern code of ethics. At the first
meeting of the American Medical Association (AMA) in 1846,
0970-3896 ª 2012 Indian Institute of Management Bangalore. Production and hosting by Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.iimb.2012.11.004
50 C. Chatterjee, V. Srinivasan

a committee was appointed to report on a code of ethics paid for through personal funds (Sengupta & Nandy, 2005).
for the organisation. Modern medical codes of ethics are According to the Central Bureau of Health Intelligence,
based on the works of Thomas Percival, a British Physician majority of Indians trust and visit private health care
credited with giving much thought to the future of the despite the fact that cost of treatment in private treatment
profession. The International Code of the World Medical is significantly higher than public facilities (Table 1).
Association, an organisation representing physicians foun- Private sector health care is highly fragmented with over
ded in 1947, ensures that physicians strive for the highest 90% of private health care being serviced by the unorgan-
possible standards of ethical behaviour and care at all times ised sector. Eighty percent of the private hospitals are small
(Backof & Martin, 1991). clinics and nursing homes (less than 30 beds). Six to seven
In the 1970s, traditional medical ethics changed into an percent are 100e200 bed size hospitals and only 2e3% of
interdisciplinary field involving theologians, lawyers, hospitals are 200- plus bed (Table 2). Most of the large
philosophers, social scientists, and historians, as well as hospitals are located in the urban areas.
physicians and other health professionals (Veatch, 2006). The sector however has attracted considerable private
The reason for this was the increasing impact of science and investments and it appears that the participation of the
technology, the growth of specialisation in the field of private sector in this field is likely to continue in the near
medicine, public expectations from new medicines and future. The conflict between the financial solvency of the
surgical techniques, changes in the financing and delivery of private sector players to the need for affordable quality
health care, and the transformation of medical schools into health care services in ways that enhance the health and
large medical centres in the West. The field of medical ethics well-being of citizens is an immediate and visible area of
which focused on the moral responsibility of a physician to ethical conflict in the sector.
a patient was not adequate to address the ethical aspects
emerging out of the changed context. With more stake- Disease burden and adequacy of facilities
holders, such as medical devices companies, pharmaceutical
companies, diagnostic clinics, insurance companies, clinical
In the course of development, countries undergo an
trial organisations, and other service providers entering the
“epidemiologic transition”. Initially the developing nations
field, there was a need to expand the scope of the definition
have high morbidity and mortality due to communicable
of ethics within the field of medicine. In recent years, the
diseases and maternal and child mortality. As economic
terms “bio-medical ethics”, “bio-pharmaceutical ethics”,
development occurs, these morbidities decline significantly
and “health care ethics” are gaining importance. The term
and there is an upsurge of diseases of the affluent class,
bio-medical ethics includes the issues related to reproduc-
that is, non-communicable diseases, injuries and geriatric
tive biology, such as stem cell research and human cloning
problems. India, however, faces a dual burden of high
and the ethical dimensions arising out of these changes. The
incidence of infectious diseases (Tables 3 and 4) and a rising
term bio-pharmaceutical ethics refers to the ethics associ-
epidemic of non-communicable diseases. The trend of dual
ated with the discovery and development of the products.
burden is consistent across urban and rural areas with
The term health care ethics is increasingly being used as an
a slightly higher proportion of non-communicable diseases
umbrella term to encompass ethical aspects previously
in urban areas (Table 5). With the changing trends in the
included in medical-, bio medical-, bio-pharmaceutical- and
communicable diseases, changing demographics, increasing
also organisational- and business ethics of different stake-
urbanisation, and increased lifespan, the burden of disease
holders involved in the provisioning and delivery of health
is likely to increase further, putting a burden on an already
care services. It is this broad definition of health care ethics
insufficient health care system.
that is being used in this note and the round table discussion
Given the cost of treatment, disease burden, and the poor
that follows the note.
public health care facilities, the moral and ethical discussion
on the “right to live” assumes a greater significance in India.
Indian health care sector
In the next section, we introduce the typical experiences of
an imaginary patient in the health care system in India.
The health indicators of India have consistently lagged
behind the economic development that has been witnessed
over the last decade and the need for increased investment An imaginary patient
in health care has been acknowledged. The public expen-
diture on health in India remained at about 1.1% of GDP in This section outlines the trajectory for an imaginary patient
2010 (Ministry of Health and Family Welfare, GOI). Public (Patient X) traversing through the value chain in Indian health
health care delivery is done through a network of over care. Patient X might be a poor farmer, an entrepreneur, or
146,036 health sub-centres, 23,458 Primary Health Centres
(PHCs) and 4276 Community Health Centres (CHCs). There is
Table 1 Average cost (in rupees) of a typical illness
a 150-bed civil hospital at the district level to provide
episode in public and private sector.
tertiary care. Only 23.5% of urban population and 30.6% of
the rural people choose government facilities, thus reflect- Public Private
ing the widespread lack of confidence in the public health facilities facilities
care system (Central Bureau of Health Intelligence, 2010). Cost of an out-patient episode 242 310
Studies have acknowledged that India ranks among the Cost of an in-patient episode 859 9352
top 20 countries in the world in its private health care
Source: Selvaraj & Karan, 2009
funding and that 82% of the total medical expense in India is
Ethical issues in health care sector in India 51

Table 2 Classification of hospitals in India.

Types of hospitals in India
Government Private
Nursing homes Mid tier Top tier
Health care centres, Primarily nursing Corporate hospitals Major corporate hospital
district hospitals homes and recovery with in house staff chains and specialty hospitals
and general hospitals rooms with adequate and consulting physicians
infrastructure
Variable: based on types <30 beds 30e100 beds >100 beds
Source: Ministry of Health and Family Welfare, 2010, http://mohfw.nic.in/index.php

a settled professional. Patient X visits a general physician, Health care is a key aspect of any developing nation and
who advises diagnostic tests, and cautionary medicines and the need for quality, accessible and affordable health care
could also refer X to a specialist. Patient X has bills to pay and is a necessity. A particularly central role in health care
the following options of payment: if Patient X has been delivery in modern societies is that of the physician. Francis
treated at a public hospital she may have the option of not Moore the respected American physician noted, that “the
paying any of the bills; Patient X could approach her insurance surgical investigator must be a bridge tender, channelling
provider if she is employed in a big company and has knowledge from biological science to the patient’s bedside
employer-provided insurance; Patient X could approach her and back again”, adding also that the surgical investigator
insurance provider from the state if she comes from below- was open to the charge of not being a very good scientist
the-poverty-line and has state provided insurance. Despite from one end of the bridge and of not spending enough time
the options, it is an arduous journey, and one hopes, without in the operating room, from the other (Murray & Moore,
serious implications. 2002). In contexts like India, the role of the physician is
The above anecdote is educative of how as a patient or more nuanced and tricky, especially since physicians have
a consumer, one is dependant on so many stakeholders been historically revered in the society and their decision-
across the value chain in the Indian health care industry. making powers are further enhanced. But such a role also
There are the doctors e the generalists and the specialists, brings along with it responsibility. It is arguable if the two
the medicine-makers, local firms and multinational corpo- key nodal organisations of physicians in the country, the
rations (MNCs), and the diagnostic device producers e Medical Council of India (MCI) and the Indian Medical
domestic and multinational e supplying their equipment to Association (IMA) have been able to live up to that
the hospitals who can afford them. Finally there is the responsibility in recent times.
concerned insurance provider to turn to for settling the
bills, provided one is among the privileged few in society to Institutional structures and ethics
have insurance support.
A brief overview of the key stakeholders in the value The IMA, organised in 1928, was the result of efforts in Cal-
chain is provided in Fig. 1. It must be noted that several cutta to form an association of doctors in pre-independence
private and public actors are present in different parts of India. It currently has over 178,000 members with about 1700
the value chain. Therefore, the inter-relationships across local branches. With antecedents that can be traced to the
the actors are complex and raise several issues pertaining Bengal Medical Association, IMA has historically seen
to conflicts of interest. respected doctors as its president. A key name in this regard is
Dr. B C Roy in 1929e1930 who later on became the Chief
Minister of West Bengal. (However, in recent times, the
reputation of the presiding doctors has been in question.) It is
Table 3 Pattern of communicable diseases. also important to note that the IMA has played a global role
Trends of communicable diseases in India
Diseases showing Diseases showing
increasing trends decreasing trends Table 4 Burden of communicable diseases.
Communicable Magnitude of the burden
Dengue, chikungunya Poliomyelitis
diseases
HIV-TB co-infection Tuberculosis
Cholera O139 Neonatal tetanus TB 283 cases per lakh population
Japanese encephalitis Measles in 2007
Leptospirosis HIV/AIDS HIV 2.27 million HIV-positive
Novel H1N1 infections persons in 2008
Eradicated: smallpox, guinea worm Malaria 2 million deaths per year
Eliminated: yaws, leprosy Leprosy 130,000 affected people
Source: Ministry of Health and Family Welfare, 2010, (http:// Source: Ministry of Health and Family Welfare, 2010, (http://
mohfw.nic.in/index.php) mohfw.nic.in/index.php)
52 C. Chatterjee, V. Srinivasan

On 25th June 2012, the nation witnessed an unprece-

Table 5 The causes of death.
dented one-day strike by the IMA1which contested the
Causes of death Overall Rural proposed promulgation of the Clinical Establishments Act and
areas the formation of the National Council for Human Resources in
Communicable 38% 41% Health (NCHRH) by the Government of India. Physicians
diseases, maternal, across the country affiliated to IMA could foresee through
peri-natal and these developments, a diminishing role of IMA in Indian
nutritional society. This event followed Bollywood actor Aamir Khan’s
Non-communicable 42% 40% show on national television channels highlighting the
diseases controversial roles of doctors around the country.2 These
Injuries 10% 10% events were not in isolation e coming after the arrest of the
Ill-defined causes 10% 9% MCI president Dr. Ketan Desai by the Central Bureau of
Investigation for allegedly accepting a bribe to permit
Source: Ministry of Health and Family Welfare, 2010, (http://
mohfw.nic.in/index.php) Patiala-based Gyan Sagar Medical College to recruit a fresh
batch of students without having adequate infrastructure.3
Subsequent to this, MCI was superseded by the President of
too; some of its members were earlier members of the British India and its functions entrusted to a Board of Governors. The
Medical Association and IMA members were also influential in present Board of Governors was notified on 13 May 2011.
the setting up of the World Medical Association in 1962. At It is clear that while doctors have a bridging role to play
around the time of IMA’s formation, the Medical Council of as alluded to by Francis Moore e their position is particu-
India (MCI) was established in 1934 under the Indian Medical larly under the radar today in India. A recent article
Council Act, 1933. The Council was later reconstituted under effectively points to this, highlighting the role of “doctors
the Indian Medical Council Act, 1956 that replaced the earlier in entrepreneurial gowns”, and pointing to how various
Act. The main functions of the MCI are the following: estab- private-sector physicians are also holding a conflicting
lishment and maintenance of uniform standards for under- position with the IMA and are breeding industries such as in
graduate medical education; regulation of postgraduate the “treatment of obesity” (Nagral, 2012).
medical education in medical colleges accredited by it (The At various points in this round table discussion, we come
National Board of Examinations is another statutory body for back to the key role of physicians and doctors in our lives.
postgraduate medical education in India); recognition of While we certainly try to outline the role of firm-level
medical qualifications granted by medical institutions in instruments and address issues for pharmaceutical firms,
India; recognition of foreign medical qualifications in India; domestic and multinational, and further discuss issues
accreditation of medical colleges; registration of doctors about harmonisation of various regulatory bodies, physi-
with recognised medical qualifications; and maintaining cians e being central to the act of health care delivery e
a directory of all registered doctors (called the Indian Medical have a key role to play in the context of ethical behaviour
Register). Finally, registration of doctors and their qualifica- in health care markets. They form a key component of our
tions is usually done by state medical councils. discussion.

Figure 1 Health care value chain in India. Source: (Chandwani, Devare & Srinivasan, 2011)
Ethical issues in health care sector in India 53

Dr. Richard Manning begins the round table discussion by that Arrow (1963) has highlighted as historically prevailing
underlining the issue of ethics and efficiency as they relate in health care markets around the world, more so in India.
to health care markets. This is a particularly salient guiding Mr. Sapra’s thoughts are given logical completion by Dr.
framework since it is important to note that what might be Ravikumar Banda, Founder and Managing Director of Xcyton
ethical might not necessarily be efficient and with the Diagnostics. Dr. Banda an erstwhile physician and now an
particular case of health care markets this problem might entrepreneur starts off by highlighting the “physician-
be aggravated. Andrew Shleifer (2004) discusses this trade- centricity” of health care markets, more so in contexts like
off, pointing out that: “When unethical behavior cuts costs, India. Dr. Banda’s thoughts particularly are contextual in
competition drives down prices and entrepreneurs’ relation to the role of the MCI and the IMA, the two key
incomes, and thereby reduces their willingness to pay for nodal bodies of physicians in the country. Dr. Banda touches
ethical conduct. However competition might be good for upon various aspects where society and these institutions
ethical behavior in the long run, because it promotes need to buckle up and raise their voices when it comes to
growth and raises incomes. Higher incomes raise the will- how physician behaviour affects the ordinary Indian citi-
ingness to pay for ethical behavior, but may also change zen’s life. Dr. Banda also brings out in his discussion the
what people believe to be ethical for the better.” With pivotal role of the Central Drug Controller General of India
regard to child labour, Shleifer points out that in many parts in installing formal regulatory systems to promote ethical
of the developing world, without good access to capital behaviour in Indian health care markets.
markets and educational opportunities, the alternative to We highlight in Box 1, the key issues that get covered in
child labour could well be malnutrition and disease. the round table. The area is vast and there are several
Thus the overlying issue of ethics and efficiency is
important and among other elements can be guided by two
key firm-level instruments that Dr. Manning outlines. Both
of these instruments could enhance or destroy social
welfare depending on how they are used and relate to
Box 1. Key issues covered in the round
pricing and marketing methods used by pharmaceutical table.
firms. In the context of India this is particularly pertinent
with a large section of the population having inadequate
access to medicines, more so patented ones sold by
multinationals at prices far beyond their reach. Dr. Manning The bio-pharmaceutical industry
raises the possibility of an important policy lever of
differential pricing and wonders whether it might have the a. Pricing of drugs (brand vs. generic)
potential to address this problem. Theoretically speaking, b. Investments of MNCs in tropical disease drug
marketing and promotional activities might have an infor- discovery to life style
mational contribution about products such as medicines. c. Advertising e information disclosure in ads;
Dr. Manning alludes to them, but in the context of India this doctor-pharmaceutical firm nexus to promote
is again salient since it might not be used by firms as a social certain drugs over others through samples, spon-
good. The Indian Medical Association is currently consid- sorship and other practices, with little attention
ering this particular area in careful detail and contem- to quality
plating regulations to be put in place for implementing d. Availability of banned drugs and counterfeits.
checks on marketing and promotion activities of firms; it is e. Disregard of regulations in sponsoring clinical trials
but pertinent that Dr. Manning’s thoughts would ring a bell f. Private health care providers and the issue of
in that policy discussion. “inappropriate care”.
The next speaker at the round table, Mr. Rijit Sengupta
extends Dr. Manning’s thoughts. An overarching theme of
Mr. Sengupta’s views is the role of non-market mechanisms
in ensuring ethical behaviour within the context of Indian Physician
health care markets. He terms these as the twin roles of co-
regulation and self-regulation, his thoughts falling broadly a. Irrational prescription of drugs
under three key aspects that economists have earlier b. Prescription by brand names instead of equivalent
pointed to in their efforts to raise the willingness to pay for generics
ethical conduct: those of long run market pressures, moral c. Commission received for referrals to diagnostic
suasion, and governmental regulation. centres
Carrying forward Mr. Sengupta’s thoughts, Mr. Deepak d. Prescription of non-essential drugs
Sapra from Dr. Reddy’s Laboratories points out to issues e. Monitoring of the Medical Council of India and its
around “wellness” for an emerging economy like India. code-of-conduct.
Several of Mr. Sapra’s thoughts ring a bell with issues
highlighted earlier by Dr. Manning or Mr. Sengupta; in
particular with the role of pricing, drug discovery, and Pharmacy/chemist
research in neglected diseases. As an alumnus of IIM Ban-
galore it is also heartening to notice Mr. Sapra pointing to a. Use of the MRP as the price
the game-changing role that digitisation and information b. Collusion by pharmacists on price
technology can play in reducing uncertainty of the nature
54 C. Chatterjee, V. Srinivasan

issues around ethical behaviour in the context of health that people will tend to act in ways that they perceive to be
care markets in India that merit attention. With the pres- in their own best interest. When society has in place
ence of international and domestic participants, experts appropriate structures and protections, individuals acting
from consulting and not-for-profit institutions, the phar- in their own interest often lead to outcomes that leave
maceutical industry and a physician e we have attempted others better off as well. Not to be trite, but my view is that
in the discussion, to make a fair representation of all issues Adam Smith was keenfully insightful when he described
under the overarching theme. the power of the “invisible hand.” Economic growth and
development have done a great deal to lift individuals out
Ethical issues in health care sector in India: of poverty and to foster prosperity in societies. There is
a great deal of overlap between the search for economic
discussion efficiency and the betterment of mankind, which is to me
a key standard by which ethical behaviour ought to be
measured. As economies, particularly the emerging econ-
omies, continue to grow, individuals will desire more and
better quality of life. Health care can be a major compo-
Anchors nent of that improved quality of life and can be an impor-
Chirantan Chatterjee and Vasanthi Srinivasan, IIMB tant factor in enabling continued economic growth and
Panellists development.
Ravikumar Banda: Founder and MD, Xycton Diagnostics. In short, the ethical responsibilities held by both
Email: ravikumar@xycton.com governments and biopharmaceutical companies have to do
Richard Manning: Partner, Bates White, an economics with allowing/helping individuals achieve their goals with
consulting firm based in Washington DC, USA. respect to quality of life. As economies grow, individuals
richard.manning@bateswhite.com will naturally desire better quality of health care for
Deepak Sapra: Senior Director (Business Development themselves and those they care about. The rules govern-
and Portfolio), Dr. Reddy’s Laboratories. ments put in place can either foster or retard that progress.
Deepaksapra@drreddys.com
Rijit Sengupta: Director, Consumer Unity and Trust Society
(CUTS) International. rgs@cuts.org Two key issues in ethics: pricing and marketing

Pricing

Chirantan Chatterjee Relative to the pharmaceutical industry, no issue raises

more ethical considerations in the emerging markets (or in
The theme of this round table is ethical issues in the Indian the developed ones) than pricing.
health care sector and we have speakers from different Ethical issues in pricing cluster around two poles: 1)
parts of the value chain to get practitioner inputs on ethical providing access to existing medicines for those that cannot
behaviour in health care. I will start by alluding to Nobel pay and 2) maintaining the incentive to continue to develop
Prize winning economist Kenneth Arrow’s seminal paper medicines that address unmet needs. Essentially these
from1963,4 where he first talks about the curious nature of problems come down to caring for the needs of present
‘uncertainty’ in health care markets that engenders patients as opposed to caring for the needs of future
particular problems of adverse selection and moral hazard. patients. Critics of the pharmaceutical industry sometimes
Arrow also focused on the physician-centricity of health appear to give too little attention to the latter; the industry
care markets, where the final consumer and the provider sometimes appears to give too little attention to the
are almost always intermediated by an agent in-between, former. In fact, a wholly ethical approach to the problem of
the physician concerned in most cases. Since the area is pricing must consider both current and future needs.
vast what we will try today is to cover various issues with Some argue that the developed world is a sufficiently
Professor Arrow’s thoughts in the background. It is also large and wealthy market to bring forth innovation in
a pleasure to bring in Richard, Ravi, Deepak, and Rijit in the medicines and that ignoring the property rights of compa-
ambit of this discussion. They come from various parts of nies in lower income countries through compulsory
the value chain in the industry and their thoughts poten- licensing, voiding of patents, strict price controls, or
tially will cover the entire gamut of issues relevant to whatever mechanism can do no meaningful harm to the
health care markets and ethical behaviour. Over to you future flow of medicines. For medicines that treat condi-
Richard. tions prevalent in both developed and emerging markets, it
is almost certainly true that the lost sales from “free
riding” in low income countries are not a large deterrent to
Richard Manning innovation at least in the near term. However, such static
effects are not the only ethical consideration.
Ethics in health care Companies that might start selling at very low prices in
lower income markets have a natural interest in moving into
Given my background, it is natural for me to think about higher income markets, and products sold at low prices in low
things in terms of efficiency and markets. My view is that income countries will naturally tend to flow into higher
a discussion of ethics needs to be grounded in a recognition income markets whether through legitimate channels or
Ethical issues in health care sector in India 55

otherwise. Additionally, generics manufacturers seeing those efforts have not and cannot be central to their
opportunities to challenge patents in developed countries mission. While economic growth and development will go
have an incentive to turn their attention to those markets as a long way towards lessening the burden of those diseases,
well. Both these forces threaten to leave those with low many scholars agree that some non-market mechanisms
incomes without the supply they need. will be necessary to address those issues. While these ideas
Additionally, as the emerging markets countries to grow, have resulted in some successes, meaningful progress has
they become meaningful markets and larger and larger not yet been achieved.
segments of their populations will have the capacity to pay An interesting question in this realm is who has the
for innovative medicines. Should they not? Is there no ethical responsibility to bear the burden for research into
ethical responsibility for people who can afford to pay for treatments for neglected diseases? No doubt, because the
innovative products to do so regardless of where they live? infrastructure of discovery and development that already
A key example of this tension, and the need to solve it, is resides in the private biopharmaceutical companies
HIV. Thanks to innovation in medicines, access to appro- conveys on them a cost advantage in the search for new
priate medications can turn this disease into a manageable cures, they will play a role. Exactly what the dimensions of
health challenge. Without access, it remains a nearly that role should be seems less obvious. Certainly those
certain death sentence. The gains to treatment are companies have financial resources, but that alone should
exceptionally large as it allows people to remain productive not lead them to bear the burden alone.
in the most productive years of their lives. Although more On the one hand, recent market developments have
remains to be done, great progress has been made to foster knocked the innovative industry down the ranks of most
access to HIV therapies and to bring down their cost to profitable companies in the world. Both in the US and on
those that cannot pay. a global scale, companies with the largest market value and
Philipson and Jena5 demonstrated that despite the rela- income reside largely in the oil and finance industries or in
tively high perceived prices for the medicines, the compa- information technology. If ethical responsibility is appor-
nies that developed HIV therapies captured only about 5% of tioned according to ability to pay, certainly a wider set of
the value of their innovation. In short, prices could easily contributors than the biopharmaceutical companies would
have been much higher and patients would still have be identified. Additionally, why is it that shareholders of
captured the bulk of the gains from the new therapies. private companies should support this cause? Are they the
To current beneficiaries this is obviously good. However, disproportionate beneficiaries? The answer to the question
trouble looms due to dynamic factors. The HIV virus is not obvious. Who should pay for the benefit of others is
mutates over time and the medicines that currently keep it not something about which economics typically has a lot to
at bay will probably not always do so. Short of eradicating offer. It only seems clear that the answer is unclear.
the virus, which is most likely impossible, there will be
a continuing need for new HIV therapies over time. Who will
Ethics and marketing
develop those? As prices are driven down naturally by
patent expiration and perhaps less naturally through
political pressure, the potential reward to the innovator A second key issue involving ethics in health care is the
that brings new HIV therapies to market become small. marketing of prescription drugs. As in any industry, there
Today there are relatively few HIV research programmes are legitimate concerns about the incentives the seller of
under way. Without an incentive to continue the search for a good might have to distort information conveyed about
cures, the gains of the present are coming at the expense of their product. In health care, this concern is heightened by
the gains in the future. the fact that the ultimate consumer, the patient, is typi-
The challenge in HIV and other therapeutic areas is to cally somewhat disconnected from the choice of medical
make products available for people that are unable to pay approach to use. When the physician acts in the patient’s
while not destroying the markets for those that are able. best interest, the ethical concern about marketing is less
That is no simple task as it pits the interest of the present serious. So a first step in thinking about the ethical chal-
against the interests of the future. lenge in marketing pharmaceuticals might be to consider
One potential solution to the dynamic efficiency the incentives facing the care-giving physician. When
problem is fostering differential pricing through partner- patients have the ability and freedom to compare and
ships among private companies, NGOs and governments. In select a physician based on how well he or she represents
a functioning differential pricing system, individuals or the patient’s interest, the concern that the physician might
population segments that can afford to pay only nominal be unduly swayed by marketing efforts of the pharmaceu-
prices (or perhaps no price at all) would have drug supplies tical company is diminished.
segregated to allow them access while not threatening It is also important to recognise that marketing activities
existing commercial markets. While simple in concept, the are a means of providing information to people as they
application is extremely difficult. Efforts have been made make economic choices. Information is costly to acquire
to develop differential pricing schemes, but the alignment and process. Brands and trademarks exist because they
of interests is very challenging. Making real progress will convey information to consumers about characteristics of
require the commitment of various parties to ignore strong a good or service at a relatively low cost. Advertisers
immediate interests. Exactly how to obtain that commit- remind people of their goods and service offerings because
ment is unclear. people have many things to pay attention to and reminders
Finally, although private companies have demonstrated can help sort through information to help people decide
a willingness to invest in treatments for neglected diseases, what to do with scarce time and resources.
56 C. Chatterjee, V. Srinivasan

Likewise, physicians are more able to make appropriate Rijit Sengupta

therapeutic recommendations to patients when they know
more about the products they prescribe. Although in Regulation in the health sector and the realities of
a perfect world, it might seem desirable for physicians and
implementation
patients to learn all they need to know from completely
disinterested parties, the reality is that pharmaceutical
Ethics and health care
companies know more about their products than anyone
I have segregated my presentation on regulation in the
else, and absolutely independent sources of information
health sector into six sub-points. The first point is
are costly to acquire. In modern health care systems,
a comment on the topic itself. There are two leading words
a physician’s time is scarce. Although academic publica-
in the topic: one is “ethics” and the other is “health care”.
tions provide an important source of new information, the
As far as ethics is concerned, we now have the National
cost of staying on top of the latest advances is not small.
Voluntary Guidelines (NVG) on Social, Environmental,
Hence, allowing companies to provide information to
Economic Responsibilities of Business, which was adopted
patients and physicians can be an important component of
by the Government of India, Ministry of Corporate Affairs.
improved quality of care. It is common among economists
The NVG tries to define responsible business conduct and it
to argue that the best solution to concerns about biases in
presents a framework consisting of nine principles with
the provision of information is the provision of more
certain core elements to actualise each of the principles.
information. When competitors each convey information to
We can use principle one of the NVG to lay out broadly what
physicians, they are able to determine credibility of various
we mean by ethics in business and apply that specifically in
sources and filter out better from worse.
the health care sector. Principle one, which states that
Of course, inappropriate inducements to prescribe
businesses should conduct and govern themselves with
specific products should not be allowed, but it is easy to go
ethics, transparency and accountability, emphasises that
too far and forget that the provision of information is
ethical conduct in all its functions and processes is the
a complicated, costly, and valuable exercise. Sometimes
cornerstone of responsible business. There is an emphasis
combining lunch or dinner with information about medical
on the accepted or written and non-written codes, and
treatment may be a problem, but sometimes it may be the
principles and values which define ethical behaviour. It
best way to lower the cost of the physician obtaining that
emphasises transparent communication and a culture of
information. Limiting contact between physicians and
integrity. It asserts that businesses should refrain from
marketing professionals can have unintended consequences.
indulging in corrupt practices and honestly discharge their
A recently published article6 examined the impact of access
responsibility on financial and other areas pertaining to
to sales representatives in the US on prescribing patterns of
mandatory disclosures.
physicians treating cardiovascular and diabetes patients.
Perhaps not surprisingly, the study found that physicians
working in settings with greater access to pharmaceutical Health care market
company representatives had more rapid adoption of new What do we understand by the term “health care market”
medicines than those working in settings with restricted and what are its salient features in the context of this
access to sales representatives. One can argue about the discussion? First, the health care market is an extremely
merits of rapid response to the launch of a new medicine. diverse market as far as the states are concerned, given that
Certainly, however, delaying treatment in cases where health care is a state subject. Second, it is characterised by
a new medicine would provide a substantial benefit to considerable information asymmetry. Third, it is driven by
patients presents an ethical problem. a weak market regulatory framework which does not have
A more obvious ethical problem would be continuing to a very satisfactory implementation record. As far as the topic
expose patients to a newly discovered risk. Importantly, is concerned, when you talk about health care from a holistic
Chressanthis and his colleagues found evidence that this perspective, it is difficult to separate practices in the phar-
was an unintended consequence of restricting interactions maceutical sub-sector from the health care sub-sector. The
between physicians and sales professionals. Physicians in pharmaceutical sector is extremely heterogeneous and has
their sample that had low access to sales reps took signifi- been undergoing considerable consolidation through
cantly longer to reduce prescribing in response to a newly mergers and acquisitions recently. This is going to change the
discovered risk than those with high access to sales topography of the pharmaceutical sector as far as the nature
professionals. and kind of players are concerned. The health care sector is
Of course, the applicability of these specific findings to equally heterogeneous, an extremely dispersed and unreg-
India or other emerging markets with different information ulated market. It is often difficult to identify the scope/
structures, different regulatory environments and different borders of this market.
education levels is not obvious, but the reality that infor-
mation is costly and that providing more information allows Regulation of the health care/pharma sector
people to make better decisions is universal. Allowing My next point is about regulation in the health care sector
manufacturers to provide information to professionals and and I will enumerate certain issues related to the experi-
perhaps to patients as well is a fundamental step along the ence of regulatory enforcement in this sector. The first is
ethical course. Any structure that dictates the conditions about pharmaceutical pricing. The National Pharmaceutical
on which information can flow should account for the Pricing Authority (NPPA) which is the regulator for prices in
potential gains from having more and better information in the pharmaceutical market is located under the Depart-
the hands of prescribers and patients. ment of Pharmaceuticals which is situated under the
Ethical issues in health care sector in India 57

Ministry of Chemicals and Fertilizers. We are talking about The fourth and the last point pertaining to experiences
health care here and the Ministry of Health and Family in regulation is registration of health care institutions. The
Welfare should have been the ministry or the custodian of Clinical Establishment Act, 2010, which was notified earlier
the drug regulator in this case. The NPPA’s motto is to serve in May 2012, still remains a model law and is yet to be
the consumers while encouraging the pharmaceutical adopted and adapted across most of the states. Only seven
manufacturers to produce adequate quantity of quality states have adopted this Act to date, namely, Arunachal
products to meet the rising demand. However, we know Pradesh, Himachal Pradesh, Uttar Pradesh, Rajasthan,
from experience that often protecting the interests of the Jharkhand, Mizoram, and Sikkim, and the Union Territories.
industry becomes a priority over protecting the interests of There is still a lot of resistance from the states in adopting
the consumers. For instance, if you look at the list of the Clinical Establishment Act. Related to this, in terms of
essential medicines, there has been a considerable reduc- the performance of the health care institutions, according
tion in the number of medicines which are covered in the to the National Antibiotic Policy of 2010, the government
National List of Essential Medicines (NLEM) over time. While has been toying with the idea of prescription audit to assess
at the same time more and more private companies have adherence to “rational use of drugs” (RuD) by the doctors
been given licenses to produce drugs in our country. and health care institutions. But there has been resistance
The second point about regulatory enforcement is about to this suggestion, especially from the Drug Traders Asso-
the quality of the drugs which are available in the market and ciations in the country.
what the regulator has done in order to ensure that quality is Recently, there were reports in the media about
maintained. The Central Drug Standard Control Organisation continuing friction between the Planning Commission
(CDSCO) which controls the in-flow of drugs into the country (Government of India) and the Ministry of Health and Family
and oversees clinical trials, is placed under the Ministry of Welfare regarding recommendations made by the High
Health and Family welfare. However, if you discuss issues Level Expert Group on Universal Health Care headed by Dr.
with them, they say that their sole responsibility is to ensure Srinivas Reddy. If one looks at the chapter on Health in the
that they provide licenses to international firms entering the Five Year Plan (2012e17), it talks more about managed care
market. The license for domestic drug firms is provided by which has not gone down well with the Ministry of Health
the state drug controllers, who are also responsible for and Family Welfare for obvious reasons. The Health Ministry
monitoring the performance of these firms in the market had hoped to receive greater financial support for
with regard to availability and quality of the drugs they enhancing the capacity of the sector to provide better
produce. Having worked in this sector for the last few years, health services, especially to the poor.
CUTS feels that if the enforcement of such regulatory It is appalling that our country still doesn’t have
responsibility (of availability and quality of drugs in the a National Health Policy. A draft has been lingering for
market) is left with the state, it might be counter- a long time. There is a lack of political will in supporting
productive. There is a large variation in the capacity of the and streamlining the health care sector as far as regulations
state drug controller and also in factors that determine the are concerned, which has had major implications for
market at state-level. In one of our recent projects7 for a majority of our fellow citizens. The first is the high cost of
example, we met with the drug controller of one state who health care, and according to a World Bank estimate based
used modern technology and was able to locate or monitor on 2004 data, several million households fall into poverty in
the activities of the drug inspectors across various locations our country due to high health care expenses in India.
of the state on his fingertips. This state drug controller was
fairly well endowed with resources. When we visited another Private health care
state and met with the drug controller there, we realised The next concern is about private health care expenditures
that he had weak resource base (both physical and in terms of in our country and implications for the economically disad-
human resources), which had implications on the perfor- vantaged. According to a report,8 private expenses in health
mance of this drug controller (ability to monitor and regulate care constitute 80% of the total health care expenses in
the sector). So, there is a need to re-visit the approach India, which is very high as compared to other developing
(driven by the present policy framework/administrative countries. The issue which is of even more concern is that
arrangement) where the state drug controller monitors the expenditure on drugs comprises 72% of the total out-of-
performance of the drug firms in the state. One cannot pocket expenses in our country. A third issue on which we
expect a weak (state level) regulator to effectively regulate have done some work9 is the nexus between various health
such an extremely strong sector at the state level. care providers in the country. In our report prepared on
The third issue concerns marketing. Under the Indian the basis of primary information gathered from the two
Medical Council (Professional Conduct, Etiquette and Ethics) states e Assam and Chhattisgarh e what we saw was that the
Regulations, 2002, pharmaceutical companies are not pharmaceutical companies were continuing to influence
supposed to influence the behaviour of doctors by offering doctors through promises of foreign visits and continued
gifts/commissions. But evidence suggests otherwise, going medical education. The job of the medical representatives
by the large number of complaints which have been received too has become part of this loop.
by the MCI about such practices. Recently there has been an Another thing that we need to think about is the size of
attempt by the Health Ministry to come up with a Uniform the pharmaceutical industry in the country e do we need so
Code of Pharmaceutical Marketing Practices (UCPMP). It is many pharmaceutical companies/drugs in the market? The
a voluntary guideline but the ministry is very keen to enforce nexus between the doctor and the diagnostic clinic is
it given the prevailing concerns related to marketing of drugs considered as “usual practice” and operationalised through
in the country. “cuts and commissions” even though this is prevented
58 C. Chatterjee, V. Srinivasan

under the MCI Regulations. It is not private health care the level of the state. Even with co-regulatory activities,
alone that is affected by these kinds of practices. Even in for e.g. the sectoral regulation, much depends on the
public health care, we have evidence to suggest deliberate nature of the market and that requires some thought. We
suppression of medicine supply in public hospitals, of have also been lobbying for the adoption of the national
consumers being forced to go outside public hospitals for competition policy in India, looking into the policy imped-
medicines which were otherwise available at low cost (or iments that have hindered a level playing field in the
no cost) from the medical store within the public hospitals. pharmaceutical sector, and affected entry and operations
We need to deliberate on the kind of regulations that we of pharma firms in the country. We try to balance both: as
are looking at and looking for. a consumer organisation we try to enforce the agenda of
consumer protection on the one hand, while on the other
Co-regulation and self-regulation we try to assess what is good for the industry.
There has been a considerable amount of stress on public
regulation and we have ignored the two other extremely
important types of regulation: the first being co-regulation,
Deepak Sapra
and the other, voluntary self-regulation. Co-regulation sees
the government regulating through the sectoral association Ethics in health care
(i.e., the pharmaceutical association in the pharmaceutical
sector and hospital association in the health care sector). My starting point for any discussion on health care ethics is
We have seen that sectoral associations have remained the fact that it is imperative for a society to have healthy
extremely meek in monitoring the behaviour of their citizens and therefore provision of universal, affordable
members. We need to find ways in which the government health care should be a core objective.
can work hand in hand with sectoral associations and The other fundamental premise is that health care is an
empower them. The sectoral associations must become important aspect of our life and part of the society we live
more active and penalise members who are indulging in in. So any discussion on ethics in health care cannot be in
malpractices and/or not complying with applicable rules isolation of ethics in society.
that have implications on their behaviour. I want to list out some of the major issues that I see around
The most appropriate analogy that I was able to draw health care and especially pharmaceuticals where the
was of a school where you have a teacher who disciplines question of ethics comes in and there are several grey areas.
the class; she can be equated with the public regulator/ We use terms like health “care”, and pharmaceutical
government. Yet you also have a monitor who is elected “industry”, and pharmaceutical “market”. While these are
from within the class but is accountable to the teacher. This seemingly just definitions, the words used in these terms
is the role that sectoral association should carry out, and appear to be at odds with each other e “care” and “industry”,
remain accountable to the government. This is probably the “care” and “market”. The question is whether we can recon-
kind of model we need to explore for the pharmaceutical cile these intended outcomes in a manner that is winewin.
and health care sectors. It is time to see how that can be Some of the issues I wish to point out are
done. It is also necessary to assess the catalytic forces for
self-regulation, and promote them in the sector.  Drug pricing e Are drugs priced in a manner that they can
serve the needs of people who need them? Can pricing
Role of CUTS improve access? To what extent do market forces help in
shaping pricing and impacting accessibility.
Finally, I would like to inform you about our organisation
and what we are doing to deal with this situation as How does pricing link to who the payer is, i.e. whether it
a consumer protection organisation. Firstly, we are trying is out of pocket, insurance company, or the state?
to gather some of the evidence that is otherwise difficult to
get and use that to raise a debate on the need for reviewing  Drug discovery e are the efforts towards research tar-
the regulatory framework for the sector. Secondly, we are getted to those segments where there are glaring
trying to push the agenda that the main objective of the health care gaps?
pharmaceutical or the health care sector is to promote  Influencing doctors and other health care service
consumer interest. Unlike in any other purely economic providers in order to generate prescriptions. What kind of
sector such as steel, retail, apparel or automobile e influence is acceptable e scientific, medical, academic,
consumer/public interest issues are of prime interest in the commercial.
pharmaceutical and health care sectors. Therefore, the
geography and the framework for regulation are different Where do the lines get blurred?
and have to be resolved by the government, both at the
 Pharmaceutical research and clinical trials (CTs) e How
central and the state level.
much of it is ethical and to what extent do we go?
We have to see how we can promote the NVG to effect
a more responsible pharmaceutical, medical or health care
sector in India e such discussions/processes should not be Drug pricing
restricted to the national level but should take place across
the states. I would like to share some specific examples. Let me start
There has to be a consistent process or forum to ensure with the example of AIDS which is prevalent in several parts
transparency across implementation of public regulation at of the world, including some of its most disadvantaged
Ethical issues in health care sector in India 59

parts, especially sub Saharan Africa, parts of Latin America, there are no drugs targetting such resurgence. We must
and Southeast Asia. Typically the cost of first line therapy provide incentives and funding for the right kind of research.
for an individual afflicted with AIDS used to be $50e60$ per
day irrespective of which part of the world the individual Influencing doctors
lived in. As a consequence, many people were denied
access because the drugs were simply unaffordable, espe-
The third issue is around influencing doctors and others in
cially so as several patients were living at below $1 a day
the industry on the drugs that are prescribed. Many phar-
With genericisation and competition, several players came
maceutical companies have been questioned or criticised
in, providing cheaper versions of the same therapy which
for the way they achieve their financial targets, and the
led to costs coming down to $1 a day. My next example is of
financial metrics that they adopt, for example, categorising
Rituximab, a monoclonal antibody, the biosimilar version of
doctors by the value of prescriptions they generate, and
which is manufactured by Dr Reddy’s, the company I work
the methods used to influence doctors and generate
for. The number of patients in India who were deriving the
prescriptions. Even with regard to unbranded generics,
benefit of this therapy was a handful, a few thousand, when
concerns have been raised in the US about influence over
the product was being sold only by Company X, the inno-
another set of players in the value chain e the pharmacy
vator. Enter the biosimilar version, at a price point that was
chains, aggregators, and super markets, who are customers
about 50% lower, and the number of patients getting
and influence drug usage.
benefitted expanded dramatically to several fold. Thus, for
the right kind of price and the right kind of free market
play, there can be a substantial impact on the number of Clinical trials
beneficiaries. This can be especially effective in scenarios
where the payer pays from the pocket, in countries such as Clinical trials are performed while establishing the safety
India, Brazil, Latin America, Africa, and other parts of and efficacy of drugs intended for use on human beings.
Southeast Asia. The coming in of competition immensely There are a series of tests which need to be undertaken, on
increases affordability. While these kinds of drugs are still healthy volunteers as well as patients. One of the most
very expensive for several patients, the coverage increases controversial ones is the issue of trials on human beings. Are
disproportionately with the fall in price. we treating patients in the right manner? Are they aware of
This is one of the most important issues around ethics what is happening? Are we providing the right kind of post-
and health care. It should be possible for someone to access trial support to volunteers? This impacts us in India a lot, as
an intervention/drug at the right time and in a manner that India is a preferred CT destination owing to lower costs. One
doesn’t cripple him/her financially. This is a very important estimate put the comparative cost of CTs in the ratio 1:4;
issue that generic companies and competition in the phar- that is if it costs $10M in India, then it will cost $40M in the US.
maceutical space have been able to address. I feel happy The important thing to note here is that there is a need for
and proud to be a part of this sector in India especially transparency and this is not a very strongly established
because we are making a tremendous impact towards system in India. Concerns have been cited about the medical,
improving the affordability of drugs, in every part of the ethical and financial treatment of volunteers and subjects. A
world. pharma report suggests that in 2012, more than 200 people
have died as a result of clinical trials in India. This brings us to
the question whether all was fair and square, and whether
Drug discovery the subjects were made fully congnisant of the issues around
enrolment and subsequent medical attention. So, how do we
Drug development is a high risk, high investment and create health care ethically and legally?
resource intensive game. It takes 10e12 years to get a drug There is debate around reducing clinical trials on humans,
to the market; it costs anywhere between USD 800 mn to wherever possible. Can we use more of technology and IT?
a billion. If companies cannot recoup the money, as Can we use more statistical tools and be accepting of them?
corporations they will find it difficult to invest in specific Can we do more predictive in vitro experiments to reduce
areas. This determines choice of areas to invest in, and in vivo activity? Can we formalise authorities’ responses, so
commercial attractiveness often scores over public health that there is mutual recognition of each other’s approvals?
concerns. This is one reason we see so many new drugs in Some of these questions could show us the way.
the neuropsychiatry space and so little, for example, in
tuberculosis.
As a synthesis, we must harness and leverage the power Ravikumar Banda
of free markets with the benefits of collaboration, espe-
cially on research in areas of public health concerns. Perspective on Indian health care
Technology is an enabler and the more we use it to impact
how drugs are researched and manufactured, and how My perspective is likely to be different from that of the
diseases are diagnosed, the easier it will be for new drugs other panellists on this subject. Let me tell you where I
to get to the market. come from. I have done my medicine, post-graduation in
Investments in research also have to be a collaborative psychiatry and I practised for some time. I then worked
effort between the public and private sectors with higher with Astra Zeneca research foundation after which I started
funding for non-profitable drugs. Several old diseases, for my own company. So I have seen the industry from within,
example malaria, are coming back with a vengeance and plus I know what a medical practitioner feels.
60 C. Chatterjee, V. Srinivasan

Paradox of health care industry at the end of the process, and we lack the confidence that
Health care is a very peculiar industry in that the consumer a private company could make medicines affordable to
has no rights. The consumer is completely governed by people. Since the product has come with peer-funding, it
a middleman who doesn’t pay for it, and that is the doctor. comes with fewer problems, so the company could make it
In this situation, there is one thing that is quite frightening; more affordable.
a clinician crossing ethical borders can cause lot more They do not also understand the issues connected with
damage than the pharmaceutical industry crossing the legal commercialisation of a product. Let me give you the
borders. So we require phenomenal ethical regulation example of a company X that came up with a medical
which includes both the doctors and the other people diagnostic device that could be plugged into the Internet
concerned within the same framework. To enable this, we and would provide excellent tele-medicine services, con-
have one organisation, the MCI. While MCI is an august body necting doctors and patients in remote villages. But that
in this country, it has zero capability of enforcing regula- product has gone nowhere because of the insistence that
tions or taking anybody to task. They do not have recourse the price should be kept very low and within that pricing,
to legal aid that can help them to take action if something there was no distribution margin for 2e3 levels as required.
goes wrong. Even when legalities have been breached by We need to think through the whole distribution chain and
clinicians it is very difficult for MCI to intervene and do incentivise the whole system, if not it won’t reach the last
something about it when somebody complains to them. man.
They have to seek justice through the courts.
We have a paradoxical situation in this country, where Ethical practices and positions
we have a huge disease burden when compared to the I now come to a problem that Rijit alluded to: the cuts
Western world, but we are doing little to effectively taken by doctors. It’s a huge problem in our diagnostics
manage the abundant sickness. We have a lot of plans but I industry. Where did the cuts get created? The doctors
don’t think we are implementing any of them. blame it on pharmaceutical industry; I completely blame
the doctors. We need to have highest ethical practices with
The need for innovative health care delivery diagnostics and drugs as the cuts and incentives add to the
What we require is two things, namely, inventions to tackle patient’s burden. The doctors within their own fraternity,
some of these problems, and innovation in delivering the and with the MCI and all the others concerned, need to get
solution to the last man in the remotest village. We lack together and see that the highest ethical standards are
innovative health care delivery. Quite often, we blame the maintained.
person who invented the solution for the disease. We, the Let me demonstrate what I mean by unethical practice.
government and society have been opportunistic. While As a diagnostic provider let us say that I sell an HIV test kit
many people have been benefited by making some drug at a price between Rs. 17 and Rs. 25 depending on the tax
generic we have killed innovation in the process. We don’t structure of that state to the hospital but the hospital in
see how we can keep the person still interested in the solu- turn charges the patient anywhere from Rs. 325 onwards. Is
tion, in going further. At the end of the day, the pipeline will there so much of value addition in the hospital on this
dry up. Patent and patent protection is not a problem. The diagnostic kit? Definitely not. The charges are arbitrary and
problem lies in intellectual property rights (IPR) manage- this is largely an unethical practice. Hospitals are built at
ment, the pricing of the new drug, negotiating with a certain cost and they generally want to earn their costs
a company when a new innovation has been made in making back on everything that goes through that hospital and
that available to people, and so on. There we don’t have that’s where everything gets overcharged. I don’t know
solutions and we require a lot of inventions in that space. who will control it, but it’s a huge problem in making health
However, we have the problem of poor performance care affordable in this country. Whatever the manufacturer
with regard to inventions, ethically as well as on the does, it does not reach the people because the hospital will
management side. Big corporations are scared of investing hike up the price.
in inventions and SMEs are enthusiastic in niche areas, they Coming to the regulatory hurdles, we have a Central
think that it can give them a unique position if they have Drugs Controller General of India (DCGI) who reports to the
a new invention but they don’t have the money to see the Union Health Minister. Each state has a drug controller who
problem through. There are government initiatives such as runs the day to day business of regulating, inspecting and
New Millennium Indian Technological Leadership initiative prosecuting. This is under each state government sepa-
(NMITLI), Biotechnology Industry Research Assistance Pro- rately and it is a very confusing situation for the industry
gramme (BIRAP), where part of the funding comes from and it needs to be rectified. The second problem in this
private initiatives. However, we have ethical issues when it area is the lack of a clearly defined work ethic. Even if we
comes to supporting inventions in this country or supporting put aside things like corruption, delay in issuing license e
funding. We have committees which look at publiceprivate sometimes for years together, is an unethical practice
partnerships and they are worried that at the end of the which is not punished. On the other hand, if a drug is
day, there is public money coming into a project that ulti- granted a license and is used effectively for four years, and
mately can be taken up as a product in the private sector. in the fifth year there is a problem, the manufacturer will
Though one may have price controls, it is the company that be punished severely and the Drug Controller gets a black
makes a profit. They feel that the private investors in the mark. So many people feel that inaction is the best way.
company have been made rich by expenditure at the This is how it is all over the world, not only in India.
public’s expense. Amidst these confusions and ethical However, the US FDI says there are ethics within that. If
dilemmas we forget that they there could be a public good a new drug is going to improve health care by even 5% or 2%
Ethical issues in health care sector in India 61

more than what the current drug is doing then it is your Discussion
ethical duty to see that the drug reaches society in the
shortest time. This is lacking in India. We have not ever Vasanthi Srinivasan: Thank you. You have laid out the
stated the ethical position, that it is also the duty of the range of issues on the subject of ethics in health care quite
government to see that a drug reaches the people within comprehensively. The issues discussed reflect the
a stipulated time. Therefore, some ethics has to be brought complexity of the sector, the multiple stakeholders
into the regulatory process. One important point that involved, the different interests of each of these stake-
everybody forgets, including the health ministry, is that if holders, the weak regulatory framework, and the question
we delay a drug then the cost of this delay is loaded on to of self-regulation at the level of medical professionals and
the price of the drug. We have to think through every delay organisations.
and include it in the process. What would be the three recommendations or sugges-
Public-private partnership tions that each of you has to any of the stakeholders that
Next, I would like to continue what Deepak brought up e would contribute to building a more ethical health care
about public-private partnership and the point of trust and I systems?
will say that trust is lacking on both sides. Both the industry Rijit Sengupta: A critical issue, which was raised by Ravi
and the bureaucracy are culpable in their own way but if we as well, is the role of the drug controller (DCGI) both at the
keep blaming each other and carry on a game of one- centre and at the state level. The Ministry of Health and
upmanship, this will go nowhere. At some point we need to Family Welfare must develop a mechanism that promotes
say stop and restore the ethical balance. The most impor- co-operation and consistency across the drug controller
tant aspect of this is, what is the effect on the ethics of the functions in the states.
whole society. We need to be responsible as a society on Most of the services in this country have a dedicated
many of these issues. sector regulator but the private health care sector (private
Let me give you an example from clinical trials. There hospitals and clinics) neither has a regulatory framework
have been instances where committees working under the nor a regulator. The government must articulate its position
Drugs Controller General of India (DCGI) have given oppo- in terms of regulating the private health care sector, given
site decisions in similar situations. Very often committee the proliferation of private providers in this sector which is
members though academically qualified do not understand only going to increase. The third thing would be with regard
the ground realities of public health, and they take deci- to the marketing of drugs. The government must move from
sions based on convenience. developing voluntary guidelines to stricter regulatory norms
It is a clinical trial which costs the maximum while as far as marketing and distribution of drugs is concerned.
developing a drug. If we want to develop generic drugs, These are my key recommendations.
which are important for the common man, we would Deepak Sapra: The core of my argument is based around
probably have the following situation. An anti-tuberculosis affordability and I have a few recommendations on that. In
drug was developed by a company in India, which went the Indian context, one aspect that really impacts afford-
through toxicology successfully, and through phase one of ability is the time it takes for drugs to get approval e this
the clinical trials, after which nothing further was heard aspect was pointed out by Ravi in his presentation. It would
about the drug. Do you know why? The next step is a big be a very important aspect in health care overall. In order
trial that would cost about S750M. The company is in to increase affordability we would have to reduce the time
a dilemma whether to proceed or not because when this it takes to get approval for various kinds of drugs and we
product is successful, every country poor or rich will want have to make sure of getting more people into the market
to procure it. It would be the governments of countries who as early as possible. Another aspect, on the same point,
would want to procure it and they would negotiate over the concerns the affordability of drugs which are still governed
price. But who will finally pay for this $750M worth of by patent. On this my recommendation is that we must look
clinical trials? This dilemma could prevent the drug from at compulsory licensing not just from the perspective of
seeing the light of day because if this question is not patent protection but also from the perspective of number
settled, the company could cap the drug indefinitely. This is of patients it is likely to impact. To my mind, compulsory
where public-private partnership can come into play. licensing could be one way, especially in certain critical
Maybe the Government of India should permit the company diseases where alternatives are not available. This could
to conduct the clinical trial in India and negotiate for get more drugs into the market in a manner that is
a differential price in India. But nobody is doing that. affordable to a wider mass of people in a country like India.
Everybody is willing to do what is called open source drug I am conscious that it is a very dangerous argument,
discovery platform in which first discovery costs $100M or because it could open the flood gates and therefore you
less. That part they want to subsidise. But nobody is talking need to be very careful. It needs to be selectively done in
about the remaining $650M. We need that kind of pub- the case of those products where there are no substitutes
liceprivate partnership if you want to take the new drugs available and where there is a real case for public health or
which are invented elsewhere to the masses; you are where a large number of patients are not being able to gain
required to support them too and their inventions, other- the benefits of that medication.
wise you will have a big problem of demoralising the My third point draws upon the emerging thinking around
inventive companies. innovation, which Ravi and Rijit also spoke of. I agree that
The foremost point is we need to think about how to the scope for innovation in this sector is phenomenally high
bring ethics back into medical community back. at the moment because of the various kinds of possibilities
62 C. Chatterjee, V. Srinivasan

that exist in the value chain. My recommendation to medical college hospitals attached. We were providing
venture capitalists would be to be consciously on the good medicine through that system where the poor would
lookout for the models which incorporate innovation in the get a certain amount of care. Today they are all in
health care industry, especially around delivery, and to a dilapidated state, and we need to improve them. The
start in places which are not conventionally considered funds allotted by the World Bank to improve the public
important markets or important customer segments. There health system are not being used effectively.
is a lot of value at the bottom of the pyramid and there is We need to urgently strengthen the public health care
a lot of value in taking it forward. There are various inno- system. Thirdly and most importantly we need to integrate
vative approaches that people are trying out and people the regulatory mechanism of the pharmaceutical industry
have done it in different parts of the world. We should be into one body. We need to put in place much more rigour
able to encourage innovation and get it into the Indian and time lines in executing these regulations, be trans-
scenario. Another aspect I would like to draw attention to is parent and evolve guidelines by involving the pharma
that there is tremendous potential to leverage technology industry.
to reduce many of the barriers that exist, especially around Vasanthi Srinivasan: Thank you all for making this such
information asymmetry. We could collaborate with the an enlightening discussion.
leaders in the field over this.
Vasanthi Srinivasan: I have a PhD student who is
researching on scaling up of health care services and one of
Appendix A
his areas of interest has been telemedicine. Many tele- Supplementary data
medicine initiatives have been announced in the public-
private partnership mode but the incentive structures Supplementary data related to this article can be found at
that are built in are unclear. What is likely to be the future http://dx.doi.org/10.1016/j.iimb.2012.11.004.
of telemedicine given that it could enable affordable
access to health care in rural areas? References
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