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IMF conditionality: still undermining healthcare?

Last year, the IMF tried to counter long-running accusations that its programmes damage health outcomes in developing countries, but the independent evidence points in the opposite direction. The question is whether the IMF will use this year’s reviews of its lending to switch approach and start helping Sustainable Development Goal (SDG) three to “ensure healthy lives and promote well-being for all at all ages.”

The IMF claims to protect health expenditure

An IMF blog from March last year claimed that: “A number of studies have found that IMF support for countries’ reforms, on average, either preserve or increase public health spending.” However, the evidence provided was weak. Of the six studies referenced, one, by Oxford and Cambridge university researchers, which we discuss below, flatly contradicts this claim.  Two were not related to health expenditure: one looked at revenue, not expenditure, and the second had a broader remit and contained no new evidence on the IMF and health. One was over a decade old and did not directly support the claim; while another was a link to an IMF page on the Ebola crisis. In fact  the only referenced study that supported the claim was written by the staff who authored the blog.

In another blog, the IMF Managing Director, Christine Lagarde stated  that “our latest research shows that health and education spending have typically been protected in low-income country programs.”

Again, it’s worth looking into the evidence cited to back up this claim, which is provided by an internal review of the IMF’s programmes in LICs.  The review covered the period since a change in the Fund’s policy in 2009 which mandated the use of conditionality to protect social spending.

Essentially, the IMF is arguing that this policy change has had two impacts. Firstly, that IMF programmes are no longer associated with austerity. Secondly, that the IMF has used conditionality to ring-fence social spending. Unfortunately, neither of these claims hold up well under scrutiny. We examine the first below, and will detail the second in a forthcoming blog.

The IMF: no longer the champion of austerity?

The internal review’s claim that “LIC programs are broadly divided between those entailing fiscal expansion and those seeking fiscal consolidation” is not supported by the evidence in the review. This graph, taken from the review, gives totals for the number of IMF programmes in LICs according to whether they mean cuts in expenditure or increases, with a small number, that are ‘fiscally neutral,’ having neither. This shows that 34 of the 68 programmes studied mandated cuts in government expenditure while fewer (29) supported fiscal expansion.

However, including all types of IMF programmes is misleading. It makes sense to compare the two main types of IMF programme alone: the Extended Credit Facility (ECF) for medium to long term lending, and the Standby Credit Facility (SCF) for shorter term lending. Here the gap is quite large, with 28 programmes associated with budget cuts versus 17 with expansion. The other two programmes excluded in this comparison are the Policy Support Instrument– which is advisory and entails no IMF lending, and the Rapid Credit Facility – an emergency programme for countries in trouble, which unsurprisingly has a majority of programmes that increase expenditure.

 

Fiscal Adj in LICs IMF programs

 

 

The second problem is that the statistical analysis in the review showing “no evidence that fiscal adjustment policies in LIC programmes come at the expense of health and education spending,” is disputed by independent experts. Researchers at Oxford and Cambridge Universities published a review of the IMF’s claims, finding that “the methodological strategy employed in the IMF analysis is unsound.” The researchers ran their own analysis, covering the same years as the IMF study and found that “an additional year of IMF programme participation decreases health spending, on average, by 1.7 percentage points as a share of GDP.”

This chimed with an earlier study by the same researchers of IMF programmes between 1995 and 2015 in 16 West African countries which found that “IMF policy reforms reduce fiscal space for investment in health, limit staff expansion of doctors and nurses, and lead to budget execution challenges in health systems.”

What next for the IMF?

The IMF’s concern not to be seen to be impacting health expenditure in the poorest countries can be viewed as an improvement. However, it is clear that IMF conditionality can constrain expenditure on health and other related services, and is at odds with the SDG commitment to achieve universal health coverage.

The next scheduled review of IMF funding to low-income countries is planned this year. Unfortunately, judging by the questions posed in a public consultation last year, the IMF review may be missing the point. The impacts on health and other social expenditure arise not primarily because of the access to IMF financing – which the questions focus on – but on the conditionality attached to that financing. More promisingly, the IMF 2018 Executive Board work programme also promises a review of conditionality, but, as yet, there is no public information on the scope of this review.

It is time for a much broader reform of IMF conditionality. Eurodad’s detailed study, in 2014, found that the IMF conditions are often highly controversial and intrusive on key economic policy issues that should be the crux of democratic debate in country, not mandated from Washington. Crucially, we also found that “almost all the countries [that had IMF lending programmes during the period studied] were repeat borrowers from the IMF, suggesting that the IMF is propping up governments with unsustainable debt levels”.

As the IMF warns that a new debt crisis may be developing, it is time to table real solutions that increase fiscal space for health and social protection, including cracking down on tax dodging, and the creation of an independent debt work-out mechanism to tackle the unsustainable and illegitimate debt that holds many countries back.

The IMF must stop its damaging conditionality practices. A simple way to do this would be by extending the approach of its little-used Flexible Credit Line to all IMF facilities – requiring no conditionality other than the repayment of the loans on the terms agreed. Only bold steps such as this will remove the conditionality that is at the heart of so much of the damage that the IMF can do in developing countries.

Gino Brunswijck, Research and Advocacy Officer and Jesse Griffiths, Director of Eurodad

 

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Half the world’s population can’t access essential healthcare by Anna Marriott, Public Services Policy Manager, Oxfam GB

Underlying the goal of Universal Health Coverage (UHC) is a very simple principle – everybody, everywhere, must be able to access decent, effective healthcare without facing financial hardship or being pushed into poverty. Underlying this principle is an equally simple truth – as long as people have to pay out of their pockets for treatment at the time of need there will be vast inequalities and injustices in access to healthcare.

The right to health is a fundamental human right. It cannot be realised if getting treatment or care is subject to the amount of money in your pocket or how much you can beg from your neighbour – who is likely to be equally poor.

A new World Health Organisation and World Bank Global UHC Monitoring report launched yesterday reveals some uncomfortable truths about the state of the world’s progress. These are a damning indictment of government action:

  • At least half of the world’s 7.3 billion people do not have full coverage of essential health services. Healthcare coverage has been increasing at an unacceptably slow rate of just over 1% a year.
  • 3 people every second are pushed into extreme poverty by paying for healthcare.
  • 800 million a year face severe financial difficulties because of health expenditure. The number facing financial ruin has been growing sharply since 2000.
  • The richest mothers and infants are four and half times more likely than the poorest to receive essential maternal and child health interventions in low and lower middle-income countries.
  • Sub-Saharan Africa and Southern Asia have the worst healthcare coverage – scoring just 42 out of 100 and 53 out of 100 respectively in the new global UHC service coverage index.
  • Latin America and the Caribbean has the highest percentage of people facing unmanageable healthcare costs (14.8 percent). Africa and Asia have seen the fastest rate of increase in people facing unmanageable out-of-pocket healthcare costs – with numbers rising by an average of 5.9 percent a year in Africa and 3.6 percent a year in Asia.

Healthcare – a basic human right – has become a luxury only the wealthy can afford. Millions of people are facing unimaginable suffering as a result: parents reduced to watching their children die; children pulled out of school so they can help pay off their families’ healthcare debts; and women working themselves into the ground caring for sick family members. There are even patients imprisoned in hospitals, held hostage until they can pay their fees. Just one of these powerful stories can be viewed in our film here.

A radical change of approach is needed. Governments must massively increase spending on public healthcare services and end all fees for healthcare and essential medicines. It is the only proven route to achieving UHC.  The additional money needed should be raised through progressive tax reform – not expensive private finance or unworkable health insurance schemes that exclude millions of ordinary people.

Governments must stop looking to poor vulnerable people, including those in the informal economy, to pay what they can’t afford. Contributory insurance schemes have become the health financing model of choice in many low and middle income countries. But with large informal economies these schemes become de facto voluntary and fail to cross-subsidise between the wealthy and healthy to the sick and the poor. They fail to reach scale and they leave the poor behind.

Instead, we as a global health community need to pay more attention to growing and extreme levels of economic inequality. The concentration of wealth and power in the hands of a minority is an obstruction to human development, and tackling this can provide the financing needed to deliver health for all. Today 8 men own as much wealth as the poorest half of humanity. Poor countries lose an estimated $170 billion a year because of tax dodging by corporations and the super-rich. Unfair tax systems cost them even more – Nigeria loses $2.9 billion a year because of unfair corporate tax incentives alone – equivalent to 13 times the countries total health budget in 2015. And if Kenya increased its tax to GDP ratio by 3 percentage points in 2014 – from 17.9 to 20.9 percent –  it could have raised enough additional funds to ensure all Kenyans had access to free, quality healthcare.

In light of the scale of the challenge described in yesterday’s UHC report, business as usual is just not acceptable. We need urgent action from governments to deliver on their duty to fulfil the right to health. The resources are there, what is missing is the political will to redistribute them!

 

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