This month, Aditya Bhattacharji takes stock of three political issues that are dominating Eurasia Group’s conversations with pharmaceutical firms: global protests, drug pricing, and India’s “Modicare” milestone.
First, the rash of protests unfolding across parts of the Middle East, Asia, and Latin America has piqued firms’ attention—not just in terms of short term operational challenges that all local businesses face, but also due to the nature of protesters’ grievances and what consequences this might have for the sector. Over the past several years, real or perceived healthcare system shortfalls have been a focal point for such demonstrations, and governments have reacted by devoting greater political will to healthcare.
The impact on industry varies with the approach. In more constructive scenarios, governments have deployed new resources to shore up healthcare (eg, Brazil’s investment in the Mais Medicos healthcare provision program in 2013). In today’s context, where politics typically favor anti-industry measures and economics may as well, there is a greater risk that governments marshal public dissatisfaction and use it as pretext to bear down on industry. Indeed, Chile—a longstanding beacon of stability and prosperity in Latin America—is responding to public anger by committing pharmacies to lower medicine prices, among other measures.
This takes us to our second key issue: drug pricing. It could be that the sustained political attention to addressing drug prices is sating people enough to keep them out of the streets on this particular concern (although a lack of progress could once again foment unrest). At the supranational level, political progress continues unabated, particularly after the World Health Organization’s pricing resolution at the UN General Assembly and the World Trade Organization’s Council for Trade Related Aspects of Intellectual Property Rights (TRIPS) October session on price transparency.
For all the friction over these measures between and among developed and developing markets, there is also a growing risk that if top-down multilateral action proves elusive, individual countries draft legislation that advances pricing and transparency requirements for drug firms from the bottom up. Even in the US, where unprecedented impeachment proceedings are gathering steam, pharma is unlikely to be granted a lasting reprieve. House Speaker Nancy Pelosi’s drug pricing concept document sailed through multiple House committees and enjoys strong Democratic support despite a caveat from the Congressional Budget Office that it could jeopardize innovation and access to medicines over the long term. This marks a significant departure from the past; measures that limit access to medicines have typically been a redline for political and popular support, and alongside the tenor of Democratic discussions over the future of healthcare, underscores just how acute the “leftward” shift in US healthcare politics has become.
Third, India’s “Modicare” scheme has now been live for more than one year. By most accounts, India has eclipsed expectations, however conservative these have been on account of the government’s poor track record on healthcare. The scheme remains a strong talking point for Prime Minister Narendra Modi, who celebrates that it offers employment in numbers only second to India’s railways, and covers nine admissions per minute. Two challenges and one bright spot stand out. First, the government still has to work on implementing portability, with hundreds of reported cases where patients have been unable to access care across state lines. Second, public awareness of the scheme’s benefits is still low; to some extent, this is a positive, as it gives the government time to ramp up its infrastructure to support demand. Lastly, a bit of positive news: After a year of being seemingly uninterested in addressing private players’ complaints that reimbursements were insufficient, the health ministry has authorized an increase in payments. Whether drug makers are able to garner a similarly sympathetic hearing remains to be seen.
Add Your Comment
You must be logged in to post a comment.