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Unhealthy partnerships: Karnataka Public Private Partnership, India By Dr. Sylvia Karpagam

The Rajiv Gandhi super-speciality hospital, in Raichur, Karnataka, has been celebrated as an example of a successful public-private partnership (PPP). The Planning Commission of India described it as a ‘possible model for replication and up-scaling’, while the National Institute for Transforming India (NITI) Aayog has been active in promoting PPPs across the health sector in India, with the World Bank as the technical partner. The Confederation of Indian Industries (CII), which has submitted a report to the NITI Aayog on options for PPP for select Non Communicable Diseases, hails this as a successful model. The fact that this PPP has been a complete failure and has led to the termination of the contract as early as 2012, figures nowhere in any of these discussions. This calls into question the agenda behind the promotion of hospital PPP models.

The Rajiv Gandhi Super-speciality hospital was set up in 1997 to provide tertiary care with Rs 600 million (US$150,000) in financial aid from the Organisation of Petroleum Exporting Companies as a one-time grant and as a PPP between the state government and Apollo Hospitals Enterprise Limited . The government was to pay a monthly Rs. 10 million on top of providing the 73 acre campus land, hospital building, staff quarters, roads, power, water and infrastructure. A one-off government grant covered building and civil works, medical equipments, furniture and fitting, non medical equipment, computers and software, vehicles, pre-operative expenses and working capital. Moreover the government agreed to pay Rs. 95 million for re-equipping the hospital and Rs. 101 million for administrative expenditure.

One of the key objectives of establishing this PPP was to provide quality healthcare to patients below the poverty line (BPL) in the districts of the Gulbarga division where the BPL population has been identified to constitute the majority (67%) of the population. However, data on the utilisation of the hospital services reveals that of the 340 hospital beds, only 154 were operational, of which only 40 (25.9% of operational beds and 11.4% of total beds), were available to BPL patients.

Figure 1 and 2 of the utilization of In-patient and Out-patients services show failure to achieve the hospital’s primary objective of providing services to BPL patients.

Figure 1: Rajiv Gandhi Super-speciality hospital: Utilization of In-patient services by BPL and Above Poverty Line (APL) 2002–2003 to 2010–2011 (Feb 2011)

 

India PPP- Apollo Hospital-Fig1

(Source: Government of Karnataka, 2011)

 Figure 2: Rajiv Gandhi Super-speciality hospital: Utilization of Out-patient services by BPL and APL 2002-2003 to 2010 -2011 (Feb 2011)

India PPP- Apollo Hospital-Fig1

(Source: Government of Karnataka, 2011)

The evaluation report of the government of Karnataka states that “this sub-optimal capacity utilisation has seriously affected the sustainability of the hospital, thereby leading to serious question on the commitment towards the PPP model of functioning”. The report has also found this model to have poor governance and accountability, with poor maintenance of records and failure to deliver on many fronts.

On May 31, 2012, the state government terminated the contract with Apollo and the hospital went into a ‘coma’. In August 2016, hospital equipment was seized by the Principal District and Sessions court for defaulting on payments. According to S.K. Purohit, the lawyer for the company that supplied laboratory items to the hospital “The material seized is nothing as compared to the outstanding. This is just a warning to the hospital authorities. We will hand over the seized material to Court which will auction them. If the Hospital does not pay the remaining amount, the court may again order for further action for recovering the remaining dues. ”

The government has handed the hospital from the Ministry of Health to the Ministry of Higher Education to set it up as a teaching hospital. This was widely protested for fear of adversely affecting poor communities and employees.

It is unacceptable that a failed hospital is being promoted as a successful example of a PPP. Why is this model being called successful in spite of no documented evidence of the success? As Dr. Sujatha Rao, Former Union Secretary, Ministry of health says ‘The NITI Aayog has an obligation and a duty to consult, listen, collect evidence, analyse, understand and reflect, not prescribe based on the advice of the World Bank and a few interested corporate houses.’

The writer is a public health doctor and researcher who has studied the PPP models in Karnataka and works with urban marginalised communities.

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It failed in the UK so why export it?

In the town of Huddersfield in northern England, the local hospital’s Accident and Emergency Department is set to be closed. 130,000 local people have signed petitions against the closure, fearing the impact on their community.

The local health service around Huddersfield is under increasing financial pressure, and one of the reasons is the Public-Private Partnership (PPP) deal in neighbouring Calderdale Royal Hospital. The hospital was built between 1998 and 2001. Its planned initial cost of £34 million has increased three folds to £ 103 million by the time it was finished.

Under the terms of the PPP deal, the local health service is expected to pay $966 million over 30 years in order to be able to use the hospital. The Local MP Jason McCartney from the governing Conservative party has called this situation “scandalous”. These huge costs have contributed to the local health service seeking to close the Accident and Emergency Department at Huddersfield Royal Infirmary.

The UK’s PPPs Disaster

The high costs of PPPs are being felt across public service sectors throughout the UK. PPPs (or the ‘Private Finance Initiative’ as they are known in the UK) began in the early 1990s, but new schemes were at their peak from 1998 to 2007. They consist of a contract between a public body and a private company, where the latter builds and operates a public infrastructure, and the public body guarantees to pay to use it through a long-term contract, usually around 30 years.

Such PPPs have been far more expensive than the alternative of the government borrowing to build the infrastructure itself. An inquiry by the UK parliament’s Treasury Select Committee found that PPPs have “The effect of increasing the cost … to the government”. A review by the National Audit Office, the independent body responsible for investigating government accounts, found that the interest rates ultimately paid by the government through PPPs are double those paid by the government when it borrows directly. Moreover, PPPs further increase the cost to the public sector, including through the payment of high profits and inflated running costs to the private companies, as well as the financial cost of expensive lawyers and consultancy companies hired to work on the complex contracts behind PPP schemes.

Since they started in the early 1990s a capital investment of $71 billion in the UK has been through PPPs, but the government will pay more than five times that amount under the terms of the PPP contracts it has signed up to.

Despite their high cost, one of the reasons PPPs were pursued is that they keep debts hidden, off the government’s accounts. Although the actual payments made by governments for PPPs are higher than if the government had borrowed directly, these payments don’t go on the government’s books in the same way as direct government borrowing. Therefore, PPPs are an expensive way to bypass transparency and accountability and to hide public debt. Even the IMF criticise PPPs impact on debt. The IMF’s Fiscal Affairs Department state that in many countries, investment projects have been procured as PPPs not for efficiency reasons, but to circumvent budget constraints and postpone recording the fiscal costs of providing infrastructure services.

The promotion of PPPs around the world

The disaster of PPPs in the UK has been criticised by politicians from all parties. In 2015, the UK’s Health Minister, Jeremy Hunt, from the Conservative Party said: “One of my biggest concerns is that many of the hospitals now facing huge deficits are seeing their situation made infinitely worse by PFI debt.” The Mayor of London, Sadiq Khan, from the Labour party described the PPP deals as “a millstone round the necks” of London hospitals.

Professor Jean Shaoul from Manchester Business School concludes that PPPs in the UK have been “an enormous financial disaster in terms of cost” adding: “Frankly, it’s very corrupt… no rational government, looking at the interests of the citizenry as a whole, would do this.”

Yet despite the evidence from the UK and from other countries  PPPs have been heavily promoted around the world by institutions such as the World Bank. Shockingly, in an evaluation in 2014, the World Bank’s own Independent Evaluation Group found that of 442 PPPs supported by the World Bank across numerous sectors, assessments of their impact on poverty were conducted for just nine of them (2%), and of their fiscal impact for just 12 (3%).

In the UK PPPs constitute an inefficient use of public money to provide health service. Governments elsewhere should adopt evidence-based policies to finance and run health services. International institutions, such as the World Bank, should refrain from pushing countries to adopt ideology-based policies such as PPPs. Instead, countries should be helped to adopt strategies that ensure that health services are accessible to all those who need it without breaking the budget of the household or the country.

This blog is based on ‘The UK’s PPPs disaster: Lessons on private finance for the rest of the world’ by Jubilee Debt Campaign http://jubileedebt.org.uk/reports-briefings/briefing/uks-ppps-disaster-lessons-private-finance-rest-world

Tim Jones, Policy Officer, Jubilee Debt Campaign

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Time for cancer patients to come before corporate profits by Manon Ress, co founder and acting director of UNACT

On 26th Of May, the World Health Assembly adopted the long debated Resolution on Cancer Prevention and Control. This is an important step towards supporting countries to address this disease in order to achieve Universal Health Coverage (UHC).

Cancers are a leading cause of morbidity and mortality worldwide, with approximately 14 million new cases and 8.2 million cancer-related deaths in 2012, 70% of which occurred in low and middle income countries. These numbers are expected to increase as society ages and lifestyles change, particularly in developing countries. The societal cost, as measured by human potential loss and economic cost, is high.

In addition to prevention efforts, addressing cancer requires access to prevention and treatment but this goal cannot be achieved under the existing policies that shape the price of medicines.

Breast cancer is the most common cancer in women both in developed and developing countries. Women with positive gene “human epidermal growth factor receptor 2” (HER2) face serious challenges related to the high prices of two effective medicines.

Trastuzumab is marketed by Roche under the brand name Herceptin. In South Africa, a 12-month course of trastuzumab costs approximately ZAR 516,700 ($38,000) – or around 5 times the country’s average household income. Given its unaffordability, trastuzumab is not available in South Africa’s public health sector where more than 80 percent of the country’s population seek care. Moreover, high co-payments required by medical insurers to access treatment are simply unaffordable for many who use the private sector”.

When the patient is able to get Herceptin, the cancer can go into remission and treatment can be stopped. But if treatment is delayed and the cancer spreads, the medicines have to be used for much longer, which can eventually lead to resistance to trastuzumab.

The second medicine is a new trastuzumab combination called T-DM1 has saved the lives of many women, including myself. T-DM1 is also marketed by Roche as ‘Kadcyla’. Since its first registration, Kadcyla has generated more than $2.7 billion in sales for Roche.

T-DM1 is extremely expensive; I have received bills that range from $ 3,000 to $ 5,000 per week. The price in the UK was initially around £90,000. The high price meant that NICE did not recommend it to be prescribed by the NHS in England. According to the European Society for Medical Oncology, access to T-DM1 is limited in 30 of 48 European and Central Asian countries. It is expected that access to these medicines is even more limited in developing countries. In fact none of the 56 new medicines registered with the US Food and Drug Administration to treat cancer between 2010 and 2016 are on the WHO Model List of Essential Medicines-partly because of the high price.

The ever-increasing prices of cancer medicines are “justified” by the need for incentives to reward and induce private sector investments in R&D. However, funding R&D via high medicine prices results in rationing medicines and thus in unnecessary suffering and even death. This is neither morally acceptable nor economically sound. Achieving the targets of universal health coverage and of equitable access to safe and quality treatments for all requires reforming the R&D system in radical ways.

Firstly, governments need to implement new policies that put patients’ health before companies’ profit. Governments must move toward different ways of funding R&D that do not lead to high prices such as direct public funding and prizes for inventions. This was one of the recommendations of the UN High Level panel on access to medicines.

The Union for Affordable Cancer Treatment (UACT) proposes that a coalition of countries place a percentage of treatment budgets or GDP into an innovation fund. Funding can then be allocated to a combination of direct funding, subsidies, interim prizes, end product prizes, and rewards for openly sharing knowledge, data, materials and technology.

This proposed Cancer Innovation Fund would promote innovation that results in affordable prices of medicines without making trade-offs between access and innovation.

 

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Will WHO candidates for the big job commit to ending user fees? By Aishah Siddiqa, Global Inequality Campaign Officer

Every year one billion people worldwide are denied medical care because they cannot afford to pay for it. At the same time, 100 million people are pushed into poverty due to having to find or borrow money to pay for health care[1].

My father’s family is one of those nameless millions. They live in rural Bangladesh where healthcare is inaccessible because of having to pay for services. My family had to delay mortgage payments so that my grandmother could get the cancer treatment she desperately needed. They also struggled to get medicines for my little cousin, Ismael, so that he could continue at school and one day hope to escape the cycle of poverty.

Ismael

For countless others, however, such options aren’t available so they are denied medical care altogether. Sometimes people are even imprisoned in hospitals until their families can pay their bills.

The World Bank president, Jim Kim, described user fees as “unjust and unnecessary” and said that “even tiny out-of-pocket charges can drastically reduce use of needed services”. In her address to the World Health Assembly last year, the current WHO Director-General Dr Chan said: “User fees punish the poor. User fees discourage people from seeking care until a condition is severe and far more difficult and costly to manage. User fees waste resources as well as human lives. Yet too little has been done since then to help those millions of people to access health services without paying user fees.

That is why, ahead of the elections for the next Director General of the World Health Organisation, more than 200 NGOs, academics, health professionals and influentials have signed an open letter to the three shortlisted candidates: Dr. Tedros Adhanom Ghebreyesus, Dr. David Nabarro and Dr. Sania Nishtar. The letter urges the candidates to publicly pledge to support countries to replace user fees with progressive, publicly financed health care that is free at the point of use. Signatories include Dr Gro Brundtland, the former DG of the WHO and former PM of Norway, Dr. Ricardo Lagos, former President of Chile, Ms. Hina Jilanni, Human Rights defender and Advocate of the Supreme Court, and organisations and networks such as Action for Global Health and Oxfam International.

Removing user fees is essential to achieve the SDG target of Universal Health Coverage.

Footnote

[1]Xu K, Evans D, Carrin G, Aguilar-Rivera AM, Musgrove P, Evans T. Protecting households from catastrophic health spending, Health Aff airs 2007; 26: 972–983.

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Tobeka Daki: Denied a chance to live by Catherine Tomlinson (Cancer Alliance), Marcus Low and Lotti Rutter (Treatment Action Campaign) South Africa

 

Tobeka Daki 1-formatted

Photographer: Laura Lopez-Gonzalves

On World Cancer Day in 2016 (4 February) the Fix the Patent Laws coalition in South Africa launched the Campaign for Access to Trastuzumab to advocate for broad access to the WHO-recommended essential treatment for early stage and metastatic HER2+ breast cancer[i]. One year later we are renaming the campaign the Tobeka Daki Campaign in memory of the woman who led our advocacy for trastuzumab during 2016 – whilst herself unable to access the potentially life-saving treatment.

Tobeka Daki was a single mother from Mdantsane Township in South Africa who was diagnosed with HER2+ breast cancer in 2013. Following her diagnosis, Tobeka was informed that she needed trastuzumab, in addition to a mastectomy and chemotherapy, to improve her chances of survival. A chance of survival that Tobeka was denied – not for medical reasons – but because she could not afford to buy the medicine .Tobeka’s cancer spread to her spine and on 14 November 2016 she died in her home.

In South Africa, a 12-month course of trastuzumab costs approximately ZAR 516,700 ($38,000) – or around 5 times the country’s average household income. Given its unaffordability, trastuzumab is not available in South Africa’s public health sector[ii] where more than 80% of the country’s population seek care. Additionally, high co-payments required by medical insurers to access the treatment are simply unaffordable for many who use the private sector.

Despite very limited access, Roche is able to generate significant income from the sale of trastuzumab in the South Africa. In 2015, trastuzumab was the second highest driver of expenditure on a medicine in South Africa’s private sector. During the same year, Roche earned more than US$ 8.9 billion in profits globally.

The excessive income and profits generated by the sale of trastuzumab reflect pharmaceutical companies’ common practice of price hikes in order to maximize their profits – at the expense of patients’ access to the medicines they need.

Recently academics in the UK estimated that a full 12-month course of trastuzumab can be produced and sold for as little as R3,300 (US$245) – a mere fraction of prices charged by Roche in South Africa and elsewhere. This low figure includes a 50% mark-up on the cost of production for profit and is similar to estimates for producing trastuzumab provided confidentially from a competitor company in 2013. Multiple patents granted on trastuzumab combined with the slow market entry and registration of biosimilar[iii] products globally allowed Roche to charge exorbitant prices for the life-saving treatment for far too long.

Recognising the injustice faced by herself and others who are unable to access trastuzumab while Roche reaps massive profits, Tobeka threw herself into advocating for equitable medicine access for all during 2016. In February, she was featured in a short video in which she noted: “if I can get [trastuzumab] treatment, it will give me a chance to see my two sons and my grandson growing”. Even as the likelihood of her being able to access trastuzumab diminished, Tobeka’s determination to ensure other women could access the medicine only grew stronger.

Tobeka went on to lead several demonstrations calling on Roche to drop the price of trastuzumab and gave testimony regarding her inability to access trastuzumab treatment in front of the United Nation’s High Level Panel on Access to Medicines .

Finally, less than 2 months before her death, Tobeka led a march calling on the South African government to end delays in reforming South Africa’s patent laws to improve medicine access.

On World Cancer Day 2017, the Fix the Patent Laws coalition will rename its campaign the Tobeka Daki Campaign for Access to Trastuzumab – to remember Tobeka, to recognise her inspirational leadership and to pledge ourselves to continue her struggle for access to affordable medicines.

Starting in February, activists across the world will highlight the excessive price of trastuzumab and Roche’s unconscionable profits as women continue to die as a direct result of their prices. We will demand access for every woman who needs it.

The campaign will call on Roche to drop the price of trastuzumab so that all women living with HER2+ breast cancer who need it can access it; to immediately cease all litigation against biosimilar versions of trastuzumab; to stop abusive patenting practices that needlessly extend their patent monopoly on trastuzumab; and to immediately cease litigation against the Brazilian and Argentinian governments for their use of TRIPS flexibilities in order to decrease the price of the medicine. .

To follow the campaign in South Africa, visit @FixPatentLaw or www.fixthepatentlaws.org, and follow the hashtags: #ForTobeka

Notes

[i]Approximately 1 in 5 women diagnosed with breast cancer are HER2 positive – meaning that the human epidermal growth factor receptor (HER2) is over expressed in the breast cancer tumor. HER2 over expression is associated with more aggressive disease, higher rates of recurrence and higher mortality rates than HER2 negative tumors.

[ii]Except in very limited circumstances. See more at: http://www.fixthepatentlaws.org/wp-content/uploads/2016/11/Cancer-Alliance-motivation-for-the-provision-of-trastuzumab-in-the-public-sector-November-2016-2.pdf

[iii]Follow-on versions of biologic medicines- usually produced by companies other than the originator producing company. As biological medicines are produced from living organisms, biosimilar medicines are not exactly identical to biologic medicines but are comparable in terms of safety and efficacy.

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Cancer care : how inequality kills by Mohga Kamal-Yanni, Senior Health policy Advisor, Oxfam

I shall never forget our neighbour Zahia (meaning bright) when I was growing up in Egypt. She was a really bright lady, clever, always smiling and radiating beauty and happiness. Her kids would go to school looking immaculately dressed despite being poor. One day she just disappeared and I later saw her kids in rags wandering around. As a child, I could not comprehend the neighbours’ whisper of a “bad disease” that killed her, but I clearly saw it was so bad that the family had to leave their house and the kids were destitute. Years later I learnt that Zahia had breast cancer that was diagnosed at a late stage and that her family had to sell everything so she could have treatment that was too late to save her life.

Zahia’s tragic death is a result of injustice in an unequal world, where cancer survival rates in much lower in poor countries than in rich countries. Within countries, inequality also means that access to early diagnosis and treatment is beyond the means of low income people like Zahia. She adds to the case fatality rate which is 74.5% in low income countries but 46.3% in high-income countries where access to diagnosis and treatment is much more secure.

Simply put, lack of access to diagnostics leads to late recognition of cancer, after the disease spreads all over the body and become prohibitively expensive or clinically impossible to treat, leading to unnecessary death.

Access to cancer care in developing countries is hindered by a complex web of several factors: lack of awareness and information about cancer prevention and diagnosis; underfunded and challenged health systems that are struggling to cope with communicable diseases; out of pocket payment for services that are unaffordable even for the middle class, much less people in poverty, and dreadfully expensive prices of cancer treatment.

Yet cancer incidence is rising in developing countries. The latest WHO figures show that cancer kills 8.8 million every year, the majority of which are in developing countries. Addressing the rising incidence of cancer cases requires a comprehensive approach that encompasses prevention, diagnosis and treatment, including surgery, radiation and medicines. Prevention requires public health policies that restrict carcinogenics like tobacco and encourage actions for good health such as physical exercise. However, focusing only on prevention makes cancer appear as a personal responsibility and leaves patients to bear the cost of their own treatment according to their means.

Diagnosis and treatment of cancer depend on availability of health services with trained staff that can provide quality services, including surgery and radiation, as well as affordable chemotherapy and medicines. Many governments and donors do not prioritise cancer care as part of financing health care. The International Atomic Energy Agency (IAEA) implements a programme of support to countries that are committed to investment in cancer care. More donor actions are needed to support countries in building their capacity to deal with cancer before it becomes an even more serious crisis.

Since Zahia’s death there has been great progress in chemotherapy and medicines that treat breast and other cancers. However, the price of these medicines is escalating to a degree that is beyond the means of the majority of cancer patients worldwide, and even beyond payers (whether through tax or insurance) in rich countries. Such unaffordable high medicine prices have a devastating impact on patients[1]. The tragedy is that these prices need not be so high. A recent study investigated the potential cost of production of a number of key cancer medicines and found that they can be produced and sold at a fraction of the current market price. The cases of docetaxel and letrozole medicines are illustrative of how generic competition is an effective means to make prices more affordable.

Generic production of new medicines is delayed by monopolies due to patent protection. Pharmaceutical companies often succeed in extending their monopoly via multiple follow-on patents (evergreening), thus enabling companies to maintain high prices for longer time.

While pharmaceutical companies can issue voluntary licensing for generic production when they feel it suits them, governments have the right to issue compulsory licenses to override patent monopolies, which enables generic competition and reduces prices. Despite the rhetoric that governments can use this and other tools, rich countries severely object to and punish governments that try to use it. This was the case when India rejected a patent on imatinib for treating chronic myeloid leukaemia. Novartis, the patent holder, took the government of India to court. The US government has been exerting pressure on India to change its intellectual property law, which enabled the country to reject the patent as invalid because it failed to meet India’s standards for innovation.

In recognition of the fact that high prices of new medicines are a global problem, the UN Secretary General’s High Level Panel on access to medicines made strong recommendations to enhance access to health technologies. We are yet to see the UN system and member states implementing these recommendations.

Inequality in access to cancer treatment is a death sentence for low income people. It is time that world leaders prioritise investment in public health systems and in new models of research that lead to affordable medicines that are accessible to all, in order to fulfil their commitment that no one be left behind.

[1] See next blog

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Global Health Check was created by Anna Marriott and is currently edited by Mohga Kamal-Yanni