A recent Oxfam report states that by 2016, 1% of the world population will own more wealth than the rest of us combined. This economic injustice is intertwined with gender inequality, and also with inequality in access to education and health. Inequality in access to medicine is a key feature of this global inequality.
Medicine: A hugely profitable business: Medicines, so critical for saving lives and protecting public health, can also deliver eye-watering profits. In 2013 the 10 leading pharmaceutical companies had combined revenue of US $440 billion. The biggest pharmaceutical company in the world, Pfizer, generated US $50 billion of revenue and US $22 billion profit in 2014. Such profits flow from the prices set for some of the newer medicines. In 2014 Gilead Sciences set the US price of its new drug to treat Hepatitis C at US $1000 per pill, or US$ 84,000-110,000 per treatment, a price that generated sales worth US $10 billion in 2014 for this medicine alone. It is worth remembering that approximately 150 million people are infected with hepatitis C, 75% of whom live in Low- and Middle-Income Countries (LMICs), and that about 350,000 of these die each year.
New cancer medicines allow big pharma to charge more than US $100,000 per treatment. These astronomical prices have become unaffordable even in rich countries. The UK has refused to reimburse several cancer medicines due to exorbitant prices. An op-ed co-signed by 100 leading oncologists in the prestigious journal Blood in 2012 called for a reduction of cancer medicine prices, which they deemed economically unsustainable. These unprecedented prices turn life-saving medicines into a highly profitable business.
The collective wealth of billionaires with interests in the pharmaceutical and health sectors increased from US $170bn in 2013 to US $250bn in 2014, a 47% increase and the largest percentage increase in wealth of the different sectors on the Forbes list. The World Bank estimated that the economic costs of the Ebola outbreak to Guinea, Liberia and Sierra Leone was US $356m in lost output in 2014, and that this will increase to US $815m in 2015 if the epidemic cannot be quickly contained. The greatest increase in wealth by a single pharma-related billionaire between 2013 and 2014 could pay the entire US $1.17bn cost for 2014–15 three times over. With such huge amounts of money at stake, the pharma sector does everything in its power to ensure that rules and policies are in place to maintain the status quo.
When company lobbyists hijack the decision-making process: Large sums are spent by the pharmaceutical industry in lobbying health-related decision-makers. In 2013, the pharmaceutical and healthcare sector spent more than US $487 million on lobbying in the US alone, more than was spent by any other sector in the US. The same sector spent US $260 million on campaign contributions during the election cycle of 2012. In Europe, the pharmaceutical industry employs around 220 lobbyists and an army of lobbyists covers Capitol Hill. They aim to maintain monopoly controls that allow high prices for as long as possible.
The pharmaceutical sector also lobbies the governments of the US and the EU to expand companies’ intellectual property (IP) monopoly power through the negotiation of Free Trade Agreements (FTA). These FTAs seek to restrict governments’ ability to use policy tools that promote access to affordable medicines, which has been condemned by the World Health Organization’s (WHO) Director Margaret Chan.
Countries are also put under pressure to strengthen their IP rules outside trade negotiations.
This is the case with the US pressure to reform India’s balanced IP law, threatening to shut down the “pharmacy of the developing world”. The “Pharma Gate” scandal in South Africa in 2014 revealed leaked emails showing that Pharmaceutical Associations based in South Africa and the US (PhRMA) hired a powerful US lobby firm to derail South African IP law reform that facilitated access to generic medicines.
Big pharma should focus on what it’s supposed to do: create useful new medicines to support public health at affordable prices: Pharmaceutical companies play a critical role in public health through creating medicines that save and improve the quality of life. But increasingly the industry has lost its way, concentrating on ‘blockbuster’ products, and spending money on marketing and lobbying for ever stronger monopoly rights. The current system, which is supposed to incentivize R&D by granting 20-year patents on innovative medicines, fails to meet the public health need for affordable medicines. R&D is invested where large profits can be made – often products are priced so that only a small proportion of the needs are met – while diseases that affect primarily poor countries are sidelined. Only 10% of the world R&D is spent on diseases that affect 90% of the world population. It is estimated that more than one billion people affected by neglected tropical diseases fail to get the treatment they need.
Three pharmaceutical companies (GSK, Johnson and Johnson, Novartis) made the greatest financial contribution to the Ebola relief effort, donating more than $3 million in cash and medical products. Although laudable, these same three companies together spent more than US $18 million on lobbying activities in the US in 2013. The non-existence of a treatment or vaccine for Ebola resulted from lack of R&D investment and the absence of a financially profitable market. The industry employs great scientists and researchers whose creativity is channeled to products for highly profitable markets instead of services for the vast numbers of people worldwide who are still denied the benefits of new technologies. Their plight should be the number 1 priority of all actors who have a part to play, including the pharmaceutical companies.
Winnie Byanyima, the head of Oxfam International, rightly put it in Davos: “Let the companies stop lobbying, and put the money into medicine!“. The Oxfam Even It Up campaign seeks to consign to the history books the statistic that 1 person out of 3 does not have access to needed medicines.
The following trade negotiations are currently undergoing: EU-Thailand FTA, EU-India FTA, the Transatlantic Trade and Investment Partnership (TTIP), the Trans-Pacific Partnership (TPP).
India’s balanced IP law allowed its generic industry to lower the price of Antiretroviral treatments by 99 % since 2000, bringing the cost of treatment to below $100 per person per year
During 2014, we both had a chance to work on an exciting project of analysing inequality trends in Russia as part of Oxfam’s programme on Empowering Civil Societies in an Unequal Multipolar World (ECSM BRICSAM). Through the project, we’ve got to work on the issues of both economic inequality and inequality in access to healthcare in Russia, which are central to Oxfam’s inequality campaign. This blog reflects some of our findings and learning from the project.
According to the 2013 representative population survey, Russians think that the two forms of inequality most strongly affecting the well-being of the country’s population are:
• Income inequality (72 per cent of respondents)
• Inequality in access to healthcare (47 per cent)
The income inequality percentage may not surprise outside observers, as Russia has witnessed one of the most radical increases in economic inequality in the last two decades following the collapse of the Soviet Union, and is now on par with other high inequality G20 peers like Turkey and Mexico. Inequality in access to healthcare may come as a bit more of a surprise, taking into account that Russia formally has universal health coverage and the right to free healthcare is enshrined in its constitution. Moreover, BRICS are now being looked at as important players in the global health arena.
So, what does inequality in access to healthcare actually look like in Russia? What are the main causes of inequality in access to healthcare? And how does economic inequality, ravaging the country is related to the inequality in access to healthcare?
Inequality in access to healthcare Russia has three key dimensions:
Key drivers of inequality in access to healthcare:
Clearly the lack of publicly funded health service makes people’ income the decisive factor in a person’s chances of getting healthcare in Russia. Private expenditure on healthcare of the richest 10 per cent of the Russian population is now eleven times greater than that of the poorest 10 per cent. The combination of lack of investment in health service and rising economic inequality will continue to exacerbate inequality in access to healthcare, which, in turn, will lead to further perpetuation of income inequality at the country enters into this vicious circle.
This is the first of two posts on access to health service in BRICS countries
Jim O’Neill of Goldman Sachs turned the spotlight on the four emerging economies when he dubbed them the“BRIC” countries in 2001. The acronym was extended later — to BRICS — to include South Africa. Although such a grouping may be useful from economic point of view, it sounds awkward and artificial when it comes to global health policy.
While health economists see strong potential roles for the BRICS in the development of universal health coverage, these countries vary greatly in terms of their patterns of disease, healthcare systems, financial interest in the pharmaceutical trade, and engagement in the global arena for healthcare. Although many might be looking to the BRICS for leadership, it is still not clear if these countries have sufficient shared interests or the coordinating mechanisms and processes needed to collectively and cohesively influence or promote global health policy.
The BRICS are also nowhere near economic parity. Russia and Brazil are far ahead in per capita income, outdistancing both India and China by significant margins – nearly $14,000 compared with China’s $6,629 and India’s $1,592; data and figures which were released in 2013 by the IMF. Notwithstanding, the countries in question have for the most part fallen short of successfully addressing inequalities in healthcare. Inequality in the BRICS has come under scrutiny of late, particularly due to their falling behind on Millennium Development Goals.
Despite diversity, the BRICS countries face a number of similar public health challenges, including inequitable access to healthcare and affordable medicines, soaring health costs, rising non communicable and infectious diseases such as AIDS and tuberculosis.
These factors were illustrated by recent findings of a study conducted by Oleg Kucheryavenko, which noted that limited access to healthcare for a significant number of people in Russia is an issue of concern to all social groups, non-governmental organizations and political parties. Inequality has not been given much attention by policy makers.
The Russian healthcare system is characterized by significant differences in demand from the various socioeconomic classes. Social groups with a higher incomes request healthcare more frequently than those with lower incomes. This inequality is reflected by a widespread health service based on cash payments: high-income persons pay 2.5 times more for a visit to a healthcare institution than those with a low income. However, poor people spend 1.5 times more of their household budget on medical care than well-off people.
Since 1990, the material and human resources of the health sector have been reduced. Beds have decreased by 12%, the number of doctors has dropped by 46%, and nursing staff by 10%. Yet, Russia is still among the top countries of the world in terms of the number of doctors and hospital beds per 1000 persons.
While global growth in expenditures for health care is rising, Russian spending continues to decline, which hinders government’ ability to subsidize the most in need. Russian state healthcare expenditures are several-fold lower than the ones in the countries of the European Union; in Hungary, the Czech Republic, and Poland – 6% of GDP, in Germany – 11%.
Russian spending on the health and social sector has slipped as EU and US economic sanctions have taken hold. Cutting public expenditures meant less spending for social services. Moreover, the Russian parliament approved a fragile budget that includes a reduction in healthcare spending by 25% in 2015. These decisions have put the country’s relative position of strength among the BRICS in serious jeopardy.
Between 1995 and 2011, private spending by Russians on health surpassed state spending by 2.1 times. Over half of this private spending is for retail purchases of medicines and healthcare products. Expenditures for paid health care services and unofficial payments amount in total to 87.9% of personal expenditures.
Given the current trends in healthcare financing and the structure of informal payments for health care services, expenditures for prescription drugs are likely to increase. Our study, estimated that the private expenditures will rise from 331.9 billion RUB in 2013 to 1305.5 billion RUB in 2020, considerably outperforming state expenditures on health.
Increasing funding alone will not solve all the problems in the health care system. Current spending is both insufficient and ineffective. Without effective policy changes, additional funding is likely to have a negligible effect. A key change is to adopt a social policy based on recognizing health as a human right and not a commercial product. Adopting universal health coverage as a basis for health policy means that quality health services are publicly financed and publicly delivered to all who need it.
It is evident that the prospects for health care in Russia are directly interwoven with the nation’s future socioeconomic development. What happens in the future depends on the extent to which the government recognizes the inequality that is skyrocketing in society.
Cancer, a global cause of death and suffering is on the rise. WHO estimates that cancers accounted for 8.2 million deaths in 2012 which is projected to increase to 11.5 million deaths by 2030. The majority of cancer mortality and morbidity (70% of deaths and 60% of new cases in 2012) is in developing countries. Weak access to prevention and to early diagnosis exacerbates illness in these countries. Moreover, the high cost of treatment pushes people deeper into poverty, resulting in a rising inequality.
A report on the pricing of medicines for cancer treatment by Ellen‘t Hoen discusses the unsustainability of the high prices of newer medicines. The report also provides evidence of a problem that is looming large not only in low- and middle-income countries (LMICs) but also in wealthy countries.
The report points out that while numbers of cancer deaths are reducing in wealthy countries because of access to early diagnosis and treatment, the incidence and prevalence is increasing in developing countries. In India it is projected that the number of patients with cancer will reach 1.1 million by 2020. When cancer medicines are priced out of the reach of most people living in developing countries, it compounds the challenges of accessing treatment, exacerbating illness and contributing to preventable suffering.
Even in rich countries the prices of newer cancer medicines are being questioned against a backdrop of escalating health care costs. For example, the recent decision to delist 16 medicines from the UK’s Cancer Drug Fund has elicited furious debate about the high price tag of treatments that deliver limited clinical benefits and equity in providing access to all patients under the NHS.
Access to anticancer medicines is aggravated the world over by intellectual property rights held by pharmaceutical companies and by companies’ pricing strategies. Multinational pharmaceutical companies holding the intellectual rights to new medicines justify high and often exorbitant prices as a necessary means to recover research and development (R&D) costs. However, this explanation is not possible to verify since transparency about costs is lacking. In addition, public funding contributes significantly to the development of new cancer medicines. The report contrasts the best estimates of Novartis’ R&D expenditure on imatinib (Glivec), $38-96 million, with the sales of the drug in 2012 which came to $4.7 billion. Pricing to maximise profits has proven to be very lucrative for pharmaceutical companies. The industry’s global oncology sales were worth $61.45 billion in 2012 and are expected to increase to $81.3 billion by 2018.
There is now a global consensus that the current R&D model that maintains monopolies and leads to high prices of medicines is broken. New ways of financing biomedical innovation that de-link the cost of R&D from the price of the product are being debated and piloted at the WHO.
Yet there is intense pressure on governments that are taking measures to increase affordability and access to medicines from the pharmaceutical industry and the governments protecting its interests. The current pressures on India are a prime example.
The US government, on behalf of the commercial interests of its pharmaceutical companies, is engaged in an intense effort to undermine India’s use of public health safeguards enshrined in India’s intellectual property regime. The industry seeks to force the introduction of TRIPS-plus provisions (such as data exclusivity and patent linkage) that will prolong monopolies on medicines and delay generic entry into the market. India has now been stopped from advancing a compulsory license for an anti-leukaemia medicine, dasatinib.
Experiences from the global fight for HIV treatment over the last decade have taught us that generic competition is the most robust and effective way of bringing down the price of medicines. If the US government is successful in imposing its demands on India, the generic supply of life saving medicines and the health of people living in India and other developing countries will be seriously threatened.
The Access to Cancer Treatment report presents evidence of the scale of the problem of access to cancer medicines and recommends how it may be tackled. What is clear is that we are at a tipping point where high prices for cancer medicines and the resulting lack of access to treatment are neither justified nor acceptable. The stage is set for the governments to act in favour of patients and to find workable solutions to what has become one the greatest challenges to equity and access to medicines in our time. Will we act?
Getting sick represents a risk of falling into poverty for millions of people around the world. The cost of health care put millions of people in the position to choose between buying food, sending children to school or paying to get healthcare. Yet this is not inevitable because solutions exist: Universal Health Coverage (UHC) makes it possible for people to access health care without sacrificing other basic needs.
Universal Health Coverage (UHC): Senegal example
Two years ago, the United Nations General Assembly unanimously adopted a Resolution urging Governments, civil society and international organizations to promote UHC, in order for people to use the health services they need without suffering financial hardship. More than 70 countries worldwide, including 30 of the poorest, have passed laws for UHC and have already started to reap the benefits of healthier communities with potential for stronger economies.
Health care coverage is low in developing countries. In Africa only 10% of the population has health coverage. In Senegal, 60% of the population lives with less than 2 dollars per day and only 20% has health coverage. In 2013 the government of Senegal set a target of covering 75% of its population by 2017.
UHC is an ambitious society project which, first and foremost requires a strong political will for building equitable societies. Political will must be translated into concrete action by building an equitable health system that covers the most vulnerable populations, mobilizing adequate financial resources from both domestic funding and donors’ assistance.
Civil society plays a key role in informing citizens about their health rights and ensuring that the principles of equity, including gender equity, and universality are fully respected. For example, supporting government’s efforts in Senegal means advocating to expand free services beyond the current groups (children under 5 years of age and the elderly) and beyond the current covered diseases. That is why the Pan-African Institute for Citizenship, consumers and Development (CICODEV) has launched the “Access to Health and the Universal Health Coverage” campaign.
Financing UHC: The responsibility of states and donors:
Far from reaching the 15% Abuja Commitment (2001), health expenditure accounted for only 5% of the Senegalese national budget in 2012 according to WHO Global Health Observatory. CICODEV is concerned that the 2015 Senegalese budget plan allocates only 5 billion CFA francs (€7, 6 million) to health whereas more than 25 billion CFA francs (€38 million) are needed to achieve the government goal on UHC. Discussions are underway in Senegal to mobilize additional resources, through innovative funding.
Meanwhile, official development assistance (ODA) represents 19% of Senegal’s health expenditure and hence it plays a significant role in financing health services. However, establishing a progressive taxation system for both individuals and corporations is an essential strategy to mobilize domestic resources to finance UHC in a sustainable way.
UHC post Ebola
The current Ebola crisis in West Africa highlighted the importance of sustainable investment in UHC. Today, the European Union Ministers in charge of Development Cooperation are meeting in Brussels to discuss the short and medium-term EU’s response to Ebola outbreak. They will also review the ongoing process to define the next 15 years global Sustainable Development Goals. They must seize this opportunity to defend the public re-distributive policies such as using ODA to finance UHC in order to support countries committed to making the right to health a reality for their population.
When the Ebola crisis eventually begins to diminish, and the journalists and camera crews withdraw, public interest fades and political pressure on leaders subsides, the people of Sierra Leone, Liberia and Guinea will be left to rebuild their lives, their communities and their countries. Understanding the problems that led to the escalation of the Ebola crisis is essential in order for these countries to emerge safely from it and to prevent another crisis in the future.
The ability of a country to contain an outbreak of an infectious disease like Ebola is largely dependent on the strength of its healthcare system and on having enough staff working within it to cope with the crisis. Clearly the healthcare systems in the affected countries were too weak to control the outbreak. For example, Sierra Leone had 119 doctors serving a population of nearly six million people. This meant that for every 50,000 people in Sierra Leone, there was one doctor compared to a 100 in the UK. That ratio in Sierra Leone falls well below the WHO’s recommended minimum of at least 23 doctors, nurses and midwives per 10,000 of the population.
In Liberia and Guinea, the shortage of healthcare workers is even worse. In these countries, there is only one doctor for every 100,000 people. In addition to the severe shortage of health workers, there are also problems in terms of the number of health facilities accessible to citizens and insufficient medical supplies. For example, in Liberia, there are only 3,352 hospital beds for a population of nearly 4.5 million. Guinea has a similar number of beds (3,435) for a population of nearly 11.5 million. It is hardly surprising then that these countries have struggled to contain the Ebola virus.
Inequality and the rich country drain on health workers
The health worker shortage in Africa is a stark example of global inequality. According to WHO research, Africa has the highest burden of disease of any continent, but has only 3% of the world’s health workers, and less than 1% of the world’s financial resources. While the continent continues to grapple with infectious diseases, such as HIV, malaria, cholera, tuberculosis and child pneumonia, as well as problems with maternal health, there has also been a rise in noncommunicable diseases. But the number of health workers to respond to these challenges remains remarkably few.
In order to address the unequal distribution of healthcare workers, we need to understand the labour market dynamics that affect the training, recruitment, deployment and performance of global and local health workforces. There is a global shortage of healthcare workers, affecting high-, middle-, and low-income countries, from the USA and Germany to India and Uganda. The difference between high-income countries and low- and middle-income countries lies in their ability to address these health workforce shortages, and to invest in the recruitment and training of medical staff and managers. Too often, richer countries simply recruit staff from poorer ones. It is estimated that 10% of Sierra Leone’s trained nurses are working in the UK health system.
There are many issues that lead health workers to seek employment outside their country of origin, including low salaries, inadequate health facilities and a lack of training and career development. Serious investment in these areas is needed in order to avoid the damage to local health services that is caused through the loss of healthcare workers. When significant numbers of doctors and nurses leave the countries that financed their education, there is a huge loss of public investment which makes it more difficult to deliver services and to offer education and training to people who wish to enter the health profession in the future. While workers should enjoy freedom of movement, mechanisms should be in place to support their retention, such as improving working conditions, and remuneration and career development. In Zambia, for example, healthcare workers receive an extra 25% recruitment and retention allowance on top of their basic salary, which has been effective in decreasing the migration of nurses.
Ensuring countries have the human resources tackle health crises
Wealthier nations are more able to make these kinds of investments, not only within their own borders, but internationally through providing aid and sharing expertise. A recent Global Forum on Human Resources for Health recommended that each country with severe healthcare personnel shortages should be supported to develop and implement a budgeted plan to strengthen its health workforce, as part of a broader national health strategy. This should include a special focus on the most poor and marginalised sections of society, as well as strategies to train skilled health workers and maximise their performance.
The Ebola crisis has undermined the economic progress that Sierra Leone, Liberia and Guinea were making, thereby limiting the ability of these governments to make much-needed investments in their public services. It has, however, also succeeded in focusing attention on the shockingly unequal distribution of healthcare workers, which stands in the way of achieving key public health priorities, such as reducing child mortality, improving maternal health, increasing vaccine coverage, and combating HIV/AIDS, malaria and other diseases.
The international community must invest in human resources for health for all. Health workers are the basis of a functioning healthcare system, which in turn helps to drive economic growth, save lives and improve the quality of life for millions of people around the world.