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The IFC’s Health in Africa initiative is failing to reach the poor By Jessica Hamer, Report Co-Author

Question: What do the following have in common?

  • A $6.1 million private health insurance scheme for IT workers in Lagos, Nigeria, reaching fewer than 40 per cent of its target beneficiaries; and
  • A luxury IVF clinic launched in a country bearing 14% of the entire global maternal mortality burden

One answer might be that these projects are not designed to deliver health services for the poorest sections of the population. The Lagos insurance scheme excludes all informal sector workers, while one IVF cycle at The Bridge Clinic costs $4,600.

A second might be that both projects make a deeply questionable contribution towards a country’s attainment of Universal Health Coverage (UHC), given their provision of services to small, predominantly urban, and comparatively wealthy elite.

A third is that they have both benefited from investments made as part of the International Finance Corporation’s (IFC) Health In Africa Initiative.

Health In Africa is a $1 billion investment project launched by the IFC in 2008, which aimed to ‘catalyze sustained improvements in access to quality health-related goods and services in Africa [and] financial protection against the impoverishing effects of illness’, through harnessing the potential of the private health sector. Specifically, it sought to improve access to capital for private health companies, and to help governments incorporate the private sector into their overall health care system. Health In Africa would do this through three mechanisms: an equity vehicle, a debt facility, and technical assistance.  Perhaps of most importance, the initiative would make extra efforts to ‘improve the availability of health care to Africa’s poor and rural population’.

Emanating from the World Bank Group, Health In Africa’s focus on delivering health care for people living in poverty makes sense. Anything contrary would be at odds with the Bank’s mandate and overarching goal to end extreme poverty by 2030. Oxfam welcomes World Bank President Jim Kim’s emphasis on the centrality of achieving Universal Health Coverage (UHC) to see this goal attained, and the Bank’s target to deliver health care for the poorest 40% by 2020.

However, it seems that with the Health In Africa initiative, the IFC may be working deeply at odds to these stated World Bank aims. Today, Oxfam launched Investing for the Few, analysing the investments made as part of Health In Africa to date. Oxfam’s assessment of the sporadic investment information available finds that far from delivering health care for the poorest, Health In Africa has favoured high-end urban hospitals, many of which explicitly target a country’s wealthy and expatriate populations.  The initiative’s biggest investment to date has been in South Africa’s second largest private hospital group Life Healthcare.  This $93 million endowment no doubt supported the company in its subsequent expansion (Life Healthcare acquired a 26% stake in one of India’s largest hospital groups in 2011), but there is no evidence it has used this investment to expand access to health care for the 85% of South Africans without health insurance.

Oxfam’s findings show that Health In Africa has also failed to deliver expansion of health care at any sufficient scale or pace to meaningfully contribute towards UHC. Instead the initiative has supported high-cost, low-impact investments. The Lagos health insurance scheme mentioned above cost triple the annual Nigerian government per capita health expenditure for example, and took over five years to secure fewer than 9,000 enrolees. In Nigeria, scaling up to reach UHC at this rate would take over 100,000 years.

Another major concern is the absence of sufficient attempts by Health In Africa to measure its performance. The initiative’s own mid-term evaluation found Health In Africa had failed to define and assess its anticipated results, and that the performance indicators it has used are inadequate to measure any development impact. Whilst an equity fund employed by Health In Africa boasts of its success at reaching patients at the so-called ‘base of the pyramid’, one of the annual income targets used to define this group include all but the top five per cent of earners in sub-Saharan Africa. It is likely Health in Africa’s use of financial intermediaries contributes to this failure to effectively measure impact on poor women and men. Such an arms-length approach to investment brings inherent problems around oversight and transparency.

Oxfam is clear that the IFC must improve the transparency and accountability of the Health In Africa initiative. Our report calls on the IFC to cease all Health In Africa investments until a robust, transparent and accountable framework is put in place to ensure that the initiative is pro-poor, and geared towards meeting unmet need. In addition, it calls on the World Bank Group to conduct a full review of the IFC’s operations and impact to date in the health sector in low- and middle-income countries, to investigate how they are aligned with, and are accountable to, the overarching goals of the World Bank Group: to end extreme poverty and promote shared prosperity.

The IFC needs to fundamentally rethink its activities in health, and ensure any potential projects are aligned with the Bank’s goals. The World Bank Group should focus on supporting African governments to expand publicly provided health care – a proven way to save millions of lives worldwide.

 

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World Hepatitis Day: Celebration of a new cure or commiseration for those who can’t afford it?

It’s not very often that we hear of a new medicine that actually cures a serious disease. This year, World Hepatitis Day comes with the exciting news of sofosbuvir; the new hepatitis C medicine with a cure rate of over 90%. Sofosbuvir can be used on its own in the form of one pill per day for 12 weeks. Existing treatments rely on a combination of daily oral ribavirin and weekly Interferon injections for around 48 weeks. The effectiveness of these old medicines is far below 90%, and they also carry painful side-effects in addition to the hassle associated with weekly injections.

So a new cure is good news? Unfortunately there is a big catch. The medicine is not affordable, even in high income countries. At the current price US $1000 per pill, the US public purse may have to pay over US $300 billion if the 3 million infected people are to be treated[1]. For example, it would cost the state of Oregon $360 million to treat its infected population. This would deplete the $377 million that the Oregon Medicaid program spent on all prescription drugs for its 600,000 members in 2013[2]. US insurance companies are rationing treatment and are telling doctors not to offer the medicine for all the patients that need it – keeping it only for very specific cases.

The situation in Europe is not much better. The cost of a 12-week treatment is €50,000 (US$68,000). The French health minister warned that such a high cost would have a negative impact on the French social security system, and called on the EU to collectively negotiate a lower price for sofosbuvir[3].

If cost is a major problem in the wealthier countries, then the impact of treatment price in middle-income and low-income countries will be even more dire. The majority of hepatitis C infected people – 80% – live in these countries. Countries with an infection prevalence rate higher than 10% are: Egypt at 14%, Cameroon 13.8%, Burundi 11.3%, and Mongolia 10.7%[4].

Clearly, none of these countries can afford the current high price. Gilead has entered into a deal with the Egyptian government to provide a 12-week course of treatment at US $900 per patient for the public sector[5]. At 14% prevalence in a population of over 82 million people, the potential number of people living with hepatitis C in Egypt is around 11.5 million[6]. To treat even just 5 million patients would cost Egypt the equivalent of nearly two-thirds of its total health budget (US $4.5 billion out of the current total health budget of US$ 7.22 billion for 2014/15)[7]. This cost is in addition to other drugs – pegylated interferon and ribavirin – which are needed in combination with sofosbuvir to reach the 90% cure rate for genotype 4, which is the strain of hepatitis C prevalent in Egypt.

Yet the price does not have to be this high, as illustrated in two ways. Firstly, a study by researchers at Liverpool University looked at the total real cost of the active pharmaceutical ingredients and the cost of manufacturing of the new direct anti-viral medicines class, of which sofosbuvir is one. They estimated the cost of a 12-week course of treatment with the combination of sofosbuvir and daclatasvir as US $78 per person[8].

Secondly, evidence shows that the price of medicines is slashed by generic competition. HIV treatment is a case in point: in 2000, at the height of the public outcry campaign against high medicine prices, it was very difficult to persuade any government or donors to pay for treatment, and millions of people in poor countries were left to die. The price of triple therapy for HIV was US $10,000 per patient per year. That was clearly unaffordable to patients, governments, and donors at the time. Thanks to generic competition from Indian companies, the price dropped almost overnight to US $360 per patient per year or US $1 day. Continuation of competition has resulted in the current price of triple therapy for HIV of approximately US $100 per patient per year.

Now that Trade Related Aspects of Intellectual Property Rights (TRIPS) is implemented in almost all countries, including those with manufacturing capacity such as India, it is much harder to scale up generic competition. However, TRIPS includes some flexibilities, which countries can use to help lower prices. For example, India’s patent law has a clause on “pre-grant opposition”, which allows any interested groups to challenge a patent application before the patent is granted. Civil society organisations have used this clause for sofosbuvir and therefore currently, it does not have a patent in India (although the final decision is awaiting a court ruling).

Compulsory licensing is an important legal TRIPS tool for governments to ensure affordable prices of new medicines. Use of this tool in India decreased the price of sorafenib (Nexavar) for the treatment of liver and kidney cancer from over US $5,500 per month to US $175[9]. In 2008, Thailand issued compulsory licenses for 3 cancer medicines, leading to a big drop in prices. For example, the price of one tablet of 2.5 mg of letrozole was slashed from the original Novartis price of US $£7.35 to the generic price of US $0.19-0.22 – a price differential of 30 times[10].

Obviously pharmaceutical companies and rich countries who support them do not like any government using this legal TRIPS tool. When Thailand issued compulsory licenses for medicines to treat HIV, cardiovascular disease, and cancer, it came under tremendous pressure from the US and the EU to stop[11]. Last year there was pressure by US businesses and Congress for the US government to take actions against India over its intellectual property regime[12].

The fundamental problem is the system of intellectual property rules which allows big companies to hold a monopoly on the price of medicines, thus giving them the power to set high prices. Moreover, financing for research and development (R&D) is still dictated by commercial interests rather than public health needs all over the world. Pharmaceutical companies are ferociously lobbying for stricter and stricter intellectual property protections as the only way to stimulate R&D and to ensure they can maintain their monopoly to set prices.

The price of the new hepatitis C medicine has given more momentum to the rising global movement that is challenging the high prices of new effective medicines for diseases ranging from cancer to cystic fibrosis[13]. As long as the cost of R&D is linked to drug pricing, pharmaceutical companies will continue to price medicines to ensure maximum profit, even if it means decreased access for people who need it. This is a public health travesty. .

The un-affordability of the most effective medicine that can cure hepatitis C today highlights the critical need to de-link financing for R&D from the price of medicines, and for finding new ways to finance R&D so that effective medicines are available at an affordable price to all who need them.

References

[2]http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/24/the-drug-thats-forcing-

americas-most-important-and-uncomfortable-health-care-debate/

[4] Lavanchy D.( 2011) Evolving epidemiology of hepatitis C virus. Clin Microbiol Infect.;17(2):107-15

[5]http://www.reuters.com/article/2014/03/21/hepatitis-egypt-gilead-sciences-idUSL2N0MI1ID20140321

[7] Forthcoming: New effective hepatitis C medicines must reach all patients. PLOS

 

 

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David vs Goliath: How the richest governments block the poorest nations from using their rights under international law

It is all too technical. It cannot be a media story. It is about acronyms like TRIPS and the negotiation was taking place in an obscure place called the TRIPS council in Geneva. Therefore the injustice practiced by the richest nations against the poorest ones goes unnoticed except by dedicated NGOs who are worried about the poorest people in this world. So what is this story about?

In 1995, the World Trade Organisation (WTO) was created and with it, the Trade Related Aspects on Intellectual Property Rights (TRIPS) which dictated that all WTO members adopt Western-style intellectual property standards irrespective of a country’s status of development or industrial progress. Luckily the TRIPS negotiators realised that the poorest nations – the least Development Countries (LDCs) – do not have the capacity to implement such complicated regimen so they were granted a “waiver” or a transition period until 2006, after which they were to implement the agreement.

Needless to say that by 2006 LDCs did not have the capacity to implement  -let alone to benefit from – TRIPS. So the WTO granted them another extension till 2013. This extension will expire by the end of this month. Given that the LDCs still do not have the capacity to implement TRIPS, Haiti, on behalf of the LDCs applied to the TRIPS council for an extension as they are entitled by the agreement itself. Rather than having yet another extension for an arbitrary number of years, the LDCs requested unconditional extension until a country develops enough to cease to be an LDC. The proposal was unequivocally rejected by the richest nations.

During the negotiation of the LDCs’ request, the US and EU took a very tough and inflexible position. Firstly they tried to impose a conditionality that requires LDCs to maintain existing levels of TRIPS compliance, even if these work against their development needs. Such conditionality is not required by the TRIPS agreement itself !

The US and EU also pushed hard for a limited extension of only five to seven and a half years. Such a short extension would not allow LDCs to develop the basic prerequisites (e.g. qualified personnel, a scientific and technological base, a functioning market, and regulatory systems) that would enable them to implement, let alone to benefit, from the TRIPS Agreement.

Citizens of LDCs, most of which are in sub-Saharan Africa, are the most vulnerable people in the world. More than half lives on less than $1.25 per day. The early implementation of TRIPS agreement would have a grave impact on access to medical technologies, educational resources, seeds and climate change adaptation technologies.

I personally think that it is shameful that the US and EU oppose the reasonable request of the LDCs and put undue pressure on them to accept the US/EU conditionalities that work against the interests of ordinary people in countries such as Niger, Somalia, and Malawi.

Mohga Kamal-Yanni is a Senior Health and HIV Policy Adviser at Oxfam GB

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BRICS reshaping global health and development; pregnant women and children to get free health care in Nigeria, Indian government provides free generic drugs; Kenyan NHIF to include outpatient services, Sweden appoints first Global Health Ambassador while Spain cuts health aid budget; links I liked…..

Because imitation is the best form of flattery, here’s my version of Duncan Green’s ‘From Poverty to Power’ “links I liked”:

A report on the contribution of the BRICS countries (Brazil, Russia, India, China and South Africa) on global health and development notes their overseas development aid has grown 10 times faster than the traditional G7 donors in the past 5 years. Despite their own domestic development problems, the BRICS are increasingly becoming a significant global force for financing development in poorer countries.

In recognition of the importance of government subsidies for achieving universal coverage, the federal government of Nigeria is to start paying the premium contributions of pregnant women and children under 5 years under the country’s National Health Insurance system.

The India government is rolling out a pilot scheme for a universal health package.  The pilot will provide access to free generic drugs in at least one district in every State in the country.  This move is expected to provide a huge relief to millions of poor people in India who spend a larger share of their meager income on medicine.

The Kenyan government plans to add outpatient services to the NHIF benefit package.  Strangely, this move is aimed at reducing fraud and cost rather than improving access.  Questions remain if current capacity of health service can support such expansion, and whether this will make any real improvements in access for the people given its objectives. In a related development, the NHIF has adopted capitation payment system, and has also   raised contribution rates (premiums) paid by scheme members.

The Swedish government has appointed an Ambassador (Dr. Anders Nordström) to champion its work on helping poorer countries achieve MDG goals 4, 5 and 6 (child mortality, maternal health, and HIVAIDS and malaria.  The appointment is in recognition of the importance global health on Swedish overseas development agenda and the need to strengthen efforts at achieving the health related MDGs as the deadline looms very large.

Meanwhile the Spanish government is to cut about 10% of its budget for health as part of broader measures to reduce the country’s budget deficit.

 

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Universal Health Coverage for India?

These are exciting times for health care reform in India. Last year in his Independence Day Address the Prime Minister declared that health would be accorded the highest priority. Going a step further, the government outlined plans to increase public financing of health from 1.2% of India’s GDP to 2.5% and there have been many recent press statements on this. Of course actions will speak louder than words.

In November 2011 the High Level Expert Group submitted its report to the National Planning Commission, describing a vision where every citizen should be entitled to essential healthcare services that will be guaranteed by the Central government. The report shows how it is feasible for India to establish a UHC system within the next ten years. In response the PM has let it be known that he wants the Planning Commission to take steps to help the government offer free universal health care, as proposed by the group.  Very welcome plans are already apparently in motion  to provide free medicine for all through Public Health Facilities under the National Rural Health Mission.

The Public Health Foundation of India has just launched a dedicated website to drive forward progress on Universal Health Coverage (UHC) in India. The website showcases the recent groundbreaking report of the Planning Commission’s High Level Expert Group on Universal Health Coverage. It features background documents, commentary, and expert interviews and serves as an interactive space for UHC publications as well as national and global events.

The High Level Expert Group report includes the following key recommendations:

  • Increase public expenditures on health to at least 2.5% by the end of the 12th plan, and to at least 3% of GDP by 2022
  • Ensure availability of free essential medicines by increasing public spending on drug procurement
  • Expenditures on primary health care should account for at least 70% of all health care expenditures
  • Use general taxation as the principal source of health care financing
  • Do not levy fees of any kind for use of health care services under the UHC
  • Do not go the insurance route – all government funded insurance schemes should be integrated with the UHC system.

The UHC India website could not have been launched at a more appropriate moment. This month the National Advisory Council, led by Sonia Gandhi, will consider the recommendations of the High Level Expert Group, which is indicative of a key milestone in the push for a system where all Indian citizens, regardless of their economic, social or cultural backgrounds will have the right to affordable, accountable and appropriate health services.

For UHC to succeed political and financial commitment will be essential and much hard work is needed. This new website is an excellent resource for anyone committed to making this aspiration a reality.

 

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Global Health Check is edited by Anna Marriott, Health Policy Advisor for Oxfam GB, and welcomes contributions from different authors. If you would like to write an article for this site or if you have any queries please contact: amarriott@oxfam.org.uk.