Pharmaceuticals and Value

There is a crisis of value in the pharmaceutical segment of healthcare. The percent of total healthcare spend going to pharmaceuticals in India is quite high compared to most countries. Depending on the source, estimates reach 38% of the total. Much of this cost can be ascribed to a complex, fragmented and multi-layered supply chain where many middlemen each add their markup. At the same time there is a serious problem in clinical use of pharmaceuticals. Some drugs such as antibiotics are heavily overused and some such as steroids are misused. Other drugs treating chronic illness such as statins are underused due to underdiagnosing and undertreating of those conditions. Finally, the presence of counterfeit drugs remains a significant problem. People tend to purchase branded drugs or branded generics at a higher cost in an attempt to avoid counterfeits. All this is worsened by a system of pharmacies that are fragmented, often staffed by unqualified people, where patients can often obtain drugs without a prescription, and on the advice of pharmacists who are heavily influenced by industry incentives.
The sum of all these factors is a very high spending level for pharmaceuticals resulting however in a relatively low positive clinical impact. The Institute will engage in problem identification, research, analysis, communication, and affiliation in order to better understand how this segment works, and to identify methods of address and improving on the problematic elements of marketing, distribution, and use. We will convene relevant parties, disseminate critical information and studies, and seek to develop concrete initiatives that link and join together the private and public sectors.