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LifeSciences India- a Confederation of Indian Industry publication


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An awfully long article on innovation!!! On second thoughts could have done a better job of editing my piece...

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LifeSciences India- a Confederation of Indian Industry publication

  1. 1. Mr. Apurva Shah Group Managing Director Veeda Clinical Research Mr. Arun Sawhney Chairman, CII National Committee on Drugs & Pharamaceuticals and CEO & Managing Direc- tor Ranbaxy Laboratories Ltd Dr. Arvind Lal Chairman and Managing Director Dr Lal PathLabs Dr. Devi Shetty Chairman Narayana Hrudayalaya Prof. N.K. Ganguly President, JIPMER, Distinguished Biotechnology Research Professor, DBT & Former DG, ICMR Mr. Hari Bhartia Co-Chairman and Managing Director Jubilant Life Sciences Ltd Dr. Kiran Mazumdar-Shaw Chairman and Managing Director Biocon Limited Dr. R.A Mashelkar National Research Professor and Former DG, CSIR Dr. Mrutyunjay Suar Director, School of Biotechnology & CEO, KIIT-Technology Business Incubator Dr. Naresh Trehan Chairman Medanta-The Medicity Dr. Nitya Anand Former Director, CDRI Dr. Rajesh Jain Joint Managing Director Panacea Biotec Ltd Managing Editor: Vipin Balakrishnan Editor: Hareeni Mageswaran Consulting Editor: Shikha Dhawan Consulting Editor: Dr Saji Salam Copy Editor: Gouri Athale, Shekhar B CII-Life Sciences Division Dr. Sengupta ( +91 99531 30050 Design & Creative: A P Madhu Printed and Published by Anjan Das on behalf of Confederation of Indian Industry Publishers: Confederation of Indian Industry India Habitat Centre, Core 4A, 4th Floor, Lodi Road, New Delhi-110003 Namaste Publication Pvt Ltd 102, Srinidhi Signature, 8th Cross, LBS Nagar, Bangalore-17 Editorial Advisory Board August - September 2013
  2. 2. Innovation is increasingly being seen as the currency of the 21st century. The future prosperity of India in the new knowledge economy will increasingly depend on its ability to generate new ideas, processes and solutions, and through the process of innovation convert knowledge into social good and economic wealth. In this endeavour there is a need to network people, ideas, experiences and resources to galvanise the innovation community in India and build a sustainable eco system. Competition is vital to unleash innovation. India must encourage stronger competition among enterprises. A focus on increasing competition as part of improving its investment climate, supported by stronger skills, better information infrastructure, and more finance—public and private. We must strengthen efforts to create and commercialize knowledge, as well as better diffuse existing global and local knowledge and increase the capacity of smaller enterprises to absorb it—if all enterprises could costlessly achieve national best practice based on knowledge already used in India, the output of the economy could increase more than fivefold. Fostering more inclusive innovation—by promoting more formal R&D efforts for poor people and more creative grassroots efforts by them, and by improving the ability of informal enterprises to exploit existing knowledge More concessional matching grants should be given to grassroots innovators once prototypes are developed, they would become candidates for the fund-of-funds window, which considers pro-poor grassroots innovation. The most important policy change for increasing knowledge creation, commercialization, diffusion, and absorption is to sharpen competition among enterprises so that innovation becomes essential. Unencumbered entry and exit of enterprises is perhaps the most important stimuli to innovation. Meaningful Industry academia collaboration is critical in creating a positive climate for innovation. IPR is Intellectual property protection is critical for a country like ours, our Innovation success parameter would be in creating an IP Economy With cross-cutting, multipronged strategies, catalysts like NIC can make Innovation a way of life for Indians. The road ahead is bumpy but not very bleak if we are able to help our Innovators Ideate, integrate and Implement. Hareeni Mageswaran EDITOR'S NOTE The I’s of Innovation Ideate, Integrate and Implement
  3. 3. CONTENTS LSI | October - November 2013 Cover stories on India's Innovation 10 Innovation: a tryst with reality It’s no secret that the life sciences industry is undergoing radical change due to new regulations, innovative research, and the threat of generics. Often, industry leaders see themselves at the forefront of these forces – but to move forward during these uncertain times, biotech companies must be innovative in how they do business, not just in their products. The real challenge is to be fast enough to develop a strategy, and then accelerate to successfully implement that strategy in time to take advantage of the opportunity Healthcare Scenario in India – Innovations and Improvements The Indian healthcare industry, which comprises hospitals, medical infrastructure, medical devices, clinical trials, outsourcing, telemedicine, health insurance and medical equipment, is expected to reach US$ 160 billion by 2017.On the back of continuously rising demand, the hospital services industry is expected to be worth US$ 81.2 billion by 2015. The Indian hospital services sector generated revenue of over US$ 45 billion in 2012. This revenue is expected to increase at a compound annual growth rate (CAGR) of 20 per cent during 2012- 2017, according to a RNCOS report titled,‘Indian Medical Device Market Outlook to 2017’ 42 Innovations in Industrial Biotechnology Biotechnology deals with the application of biological knowledge and techniques pertaining to molecular, cellular and genetic processes to develop significantly improved products and services. The applications of biosurfactants reduce the surface tension of water by adsorbing at the liquid-gas interface
  4. 4. CONTENTS 45 Innovations in treatment adherence Adherence to treatment is a complex phenomenon influenced by many factors like patient characteristics- age, beliefs, literacy status,co-existing health conditions, duration of treatment regimen, sociodemographics and interactions with healthcare system. For illness requiring long term medication like HIV-AIDS, tuberculosis and diabetes, adherence is critical to treatment success 56 Innovation -Detection of Food Adulterants- Food is adulterated if its quality is ¬¬lowered or affected by the addition of substances which are injurious to health or by the removal of substances which are nutritious 37 Innovation in Nutrition Nutrition plays an important role in human health and wellbeing throughout the lifecycle –beginning with conception, and through all stages in life. Nutrition is essential for sustenance in babies, infants, adolescents, young and older adults. 60 Innovation -Medicinal products from Nature Natural product has been a source of medicine for thousands of years and earlier used as tinctures, teas, powders, and other herbal formulations. Natural molecules exhibit uniqueness, vast diversity in chemical structure and also have multiple properties like antioxidant, anti-inflammatory, anti-aggregating, etc which added extra advantage to drug discovery process. 52Innovation in Environment Friendly Technology Paper making from agricultural residues, non-woody plants and waste paper is gaining momentum. In general pulping of non woody plants is cheaper than wood. They are low in lignin and, thus, do not require as much chemical. 16Our need to Innovate The global population is projected to rise from 6.5 billion in 2005 to 7.6 billion in 2020. It is also aging rapidly; by 2020, about 719.4m people – 9.4% of the world’s inhabitants – will be 65 or more, compared with 477.4m (7.3%) two years ago 22 A prescription for Innovation A holistic approach to Innovation is the key to success Life sciences innovation is critical to growth and socio-economic development as healthy people produce healthy economies. Efficient and effective delivery of patient-focused products and services can improve a population's longevity, wellness, productivity and economic potential
  5. 5. 10 LIFESCIENCE INDIA | October - November 2013 LSI COVER STORY
  6. 6. LIFESCIENCE INDIA | October - November 2013 11 LSI COVER STORY India needs to position herself in the affordable excellence segment in the area of life sciences Dr RA Mashelkar, former director general, Council for Scientific and Industrial Research (CSIR) -Gouri Athale W ill `jugaad’ (a creative or innovative idea provid- ingaquickfixalternative to a problem) be India’s answer to delivering healthcare that is accessible, affordable and available to larger segments of our population? What happened to our `frugal engi- neering’, the Carlos Ghosn phrase which encapsulated our ingenuity. India’s healthcare sector requires innovation across the board: from technology, work flow, systems de- livery, organisation, funding... so it is unlikely that a quick fix, one size fits the whole country solution of `jugaad’ will do the job. Scientists and academicians are unanimous that what might work better would be innovation in our traditional methods, through a part- nership between commercial inter- ests in collaboration with government systems. After all, the government’s reach is hard to replicate and when it comes to health, a government pres- ence is essential. Often, it is also the only one. “India needs to position herself in the affordable excellence segment in the area of life sciences,” said Dr RA Mashelkar, former director general, Council for Scientific and Industrial Research (CSIR), the country’s apex research organisation and chair of several committees which have ad- dressed issues pertaining to the sec- tor. He stressed that `affordable excel- lence’ is not an oxymoron despite the popular belief that what is affordable cannot be excellent and what is excel- lent cannot be affordable. There is the example of Shantha Bio- tech which received funding sup- port and access to government-run research institutions which helped bring down the cost of the recom- binant vaccine for Hepatitis B from US $18 per dose to 40 cents per dose. “This is affordable excellence and is an area where India can carve out a niche,” Mashelkar said. There have been several success sto- ries of government-industry partner- ships, going back to the time when the government set up the Department of BioTech (DBT), three decades ago, in the early 1980s. This gave the country a lead, creating a trained manpower resource necessary to take the move- ment forward. While biotech began around the same time as the offshor- ing of the IT sector began, players in the healthcare and biotech sectors point to crucial differences: Informa- tion Technology began without gov- ernment controls and oversight but BT cannot do without government since its products affect the health of people. Deepak Ghaisas, chairman, Genco- val Strategic Services Pvt Ltd, hold- ing company for stem cell company Stemade, and former CEO, i-flex Soft- ware Services (now Oracle Financial Services Software Ltd), noted, “The IT sector was targeted at the export market while biotech is for the do- mestic masses. Government has to play a regulatory role here.” He went on to say, “The biotech and healthcare market is here, in India,” noting that delivery is expensive now but that should come down. However, in the stem cells and re- generative area where his company works, Ghaisas said there is no regu- lation. Companies working in the field are currently devising norms for a self-regulatory framework and Ghai- sas was confident that this should be ready in three-six months time. Stressing the need for govern- ment’s role in the healthcare sector, Mashelkar said that unlike the IT sec- tor, healthcare products move from the mind to the marketplace, need- ing trials in which humans are used. “The regulatory system needs to be quick and fair. Currently, the situa- tion in India is very critical with the legal system having placed controls. So, even if a new molecule is devel- oped and benefits Indians, it goes to the US or Canada for human trials. The prevailing regulatory system has placed challenges and penalties so people are going abroad and India is losing her competitive advantage. We need to quickly implement provisions of the Ranjit Roy Chaudhury commit- tee report.”
  7. 7. 12 LIFESCIENCE INDIA | October - November 2013 LSI COVER STORY The Ranjit Roy Choudhury expert committee to formulate policy and guidelines for approval of new drugs, clinical trials and banning of drugs, submitted its report in July 2013. Among the 25 recommendations in the report are issues over conflict of interest, compensation to volunteers who experience serious adverse events during the drug trial, strengthening of infrastructure, changes in some existing legislation, transparency and science based decision making, effi- ciently functioning of ethics commit- tees, etc. Hitting out strongly against the current scenario, Ghaisas said, “The primary challenge for inno- vation is on the regulatory front, primarily driven by a lack of ex- pertise, nervousness in taking re- sponsibility and a firmly engraved follower mindset. In such a sce- nario, self regulation could be the best way to go, as we have seen in the IT industry.” The global experience has been increasing costs and decreasing pro- ductivity have hampered growth and investment in global life sciences and healthcare sectors. Hence, there is a push towards an open innovative ap- proach. This could help bring prod- ucts and services to market quickly and efficiently. There is another view, captured in an article in the Harvard Business Re- view, on the transformation of the healthcare systems. The article notes, “Rather than ask complex, high-cost institutions and expensive, specialised professionals to move down-market, we need to look at the problem in a very different way. Managers and technologies need to focus instead on enabling less expensive professionals to do progressively more sophisticat- ed things in less expensive settings.” Commenting on a meeting of the FT US Healthcare and Life Sciences Con- ference in New York, Pete Mooney, managing director, global life scienc- es and healthcare industry practice at Deloitte Touche Tomahtsu, a consul- tancy firm, wrote, “There is massive data analytics, diagnostics, genom- ics, nanotechnology, pluripotent cell research, proteomics, regenerative medicine.. all of these need multi- disciplinary expertise, collaboration and cooperation. From a traditional vertically integrated R&D industry, it is moving to a more collaborative, co- operative model.” This is something that has already be- gun in India, witness the government programmes encouraging industry to work with government- backed re- search institutes. However, Ghaisas pointed out that in India, collabora- tive action seems to be limited to the R&D space, adding, “The cause of re- stricted action is because there is very little focus on R&D as a whole. India has always successfully capitalised on collaborative models in all other as- pects of the value chain. Take the case of India which can be regarded as the bench mark in co-marketing and co- manufacturing in the healthcare in- dustry. There’s the notable example of Ranbaxy and Wockhardt, to improve reach and access in global markets for their products, or co-marketing products within India by Roche and Mankind to market and sell glucom- eters, Accucheck-Go. For a successful collaboration, the major challenges to be overcome are those of cultural dis- parities and a transparent win-win, typical for any collaboration.” A businessman, requesting anonymi- ty, who had ventured into the contract research space, pointed to the dilemna posed by regulations. He said, “The regulations are such that we decided, after having set up a CRO that the business would eventually go south. So, we sold it off. The regulations re- quire the researcher to not know the patient, to ensure the randomness of the test and to keep out biases. The patient has to agree, give her full con- sent and this is difficult when you are not supposed to know the patient.” When it comes to newer areas like stem cell research, Ghaisas said, “The latest advancements in life sciences are highly specialised biological products, customised to the individ- ual patient. These have a very short shelf life, demand a few processes be done at the point of delivery. For example, stem cell therapy for burns or use of PRP for tissue healing or cell products for arthritis for myocar- dial infarction. Here, these biological cells have to be processed in aseptic conditions and delivered to patients immediately. Customisation builds up cost and the demanding infrastruc- ture to support newer therapies builds on the cost. Hence, government needs to push innovation in not only prod- ucts but in building infrastructure for the delivery of products.” An article in the Harvard Business Review published over a decade ago, titled `Will disruptive innovations cure healthcare?’, authors Clayton M Christensen, Richard BOhmer and John Kenagy claim that the health- care system is “change averse”. The go on to state, “When healthcare is complex, expensive and inconvenient, many afflictions simply go untreated,” something Indians working in this area concur heartily. Government’s helping hand: The success stories in PPP mode don’t end with just the formation of a de- partment. There was the Biotechnol-
  8. 8. LIFESCIENCE INDIA | October - November 2013 14 LSI COVER STORY ogy Industry Research Assistance Council (BIRAC) and the CSIR’s New Millenium Indian Technology Initia- tive (NMITI). The latter was the larg- est PPP effort in the country for R&D, looking “beyond technology, seeking to build, capture and retain for India a leadership position by synergising the best competencies of publicly fund- ed R&D institutions, academia and private industry.” Government is a catalyst in this, financing projects via soft loans to industry which partner with institutions. Industry returns the funds on achieving success. NMIT Life Sciences, launched in 2003, was based on the premise of consciously and deliberately identify- ing, selecting and supporting poten- tial winners. It has so far evolved 60 projects across sectors in life sciences, involving 85 industry partners, 280 R&D groups from different institu- tions and has had a cumulative outlay of Rs. 550 crore. Describing the gov- ernment intervention in promoting innovation via such funds, Mashelkar said this opened “a new and com- petitive avenue. It is not how much money put into a project but how the money is put in. A judicious Public- Private Partnership (PPP) funding and positioning strategy, with a role for government, is the best model. The regulatory system becomes more facilitating and public funds require trust.” BIRAC, on the other hand, is a not- for-profit Company set up by the gov- ernment, to act as a single window for the emerging biotech industry and was incorporate early last year, in March 2012. Its stated objectives are to stimulate, foster and enhance stra- tegic research and innovative capa- bilities of the Indian biotech industry especially among small and mid-size companies (SMEs). Emphasise traditional methods for healthcare: Innovation in the life sciences sector is regarded as critical to growth, the premise being that healthy people will be more productive, lose less time.... all benefitting the economy and the country. While there are no disagree- ments over this, there are differing views on how to approach the prob- lem. Bhushan Patwardhan, direc- tor of the Interdisciplinary School of Health, Pune University, said health- care problems in the country are re- lated to 3As: affordability, accessibil- ity and availability. And there is need for innovation at all three levels. He was keen, too, that we reclaim tradi- tional knowledge and systems since these have been successful. Dr Patwardhan stressed that Indian research has to be focused on the needs of people living here. He re- ferred to the grand challenge project of the central government, to design and develop a toilet suited to India. “There are two major health-related issues: toilets and clean drinking wa- ter. If we can address these two is- sues, a lot of health related issues in the country will be controlled.” Dr Dileep Deobagkar, honorary pro- fessor, Dept of Bioinformatics and Zoology, Pune University, pointed to the Indian dietary system which included eating curds at the end of the meal. “The lacto bacillus in curds stays in the gut, cleans the system. Eating curds or curd rice at the end of the meal is a traditional system which won’t harm us to revive,” he said. Product innovation: A country with more cell phones than access to toilets pays the economic cost of this imbalance. According to UNICEF and WHO data, inadequate sanitation cost the country economic losses equivalent to US $ 53.8 bil- lion, or 6.4% of the country’s GDP in 2006. The UN’s Millenium Develop- ment Goals, or MDG, had stated that by 2015 everyone would have access to proper sanitation, a goal that India, and other developing countries, will not be able to meet. Working on devising a low-cost toi- let, Thammarat Koottatep, associate professor, environmental engineering and management at the Asian Insti- tute of Technology, Thailand, said that early next year, Pune and Bangkok will host pilot schemes offering affordable sanitation for urban poor. The plan is to have six-eight toilets per slum, with three-four households using one unit, creating a system robust enough to handle these quantities. While the ideal would be individual toilets, one per dwelling unit, but pressures on land and water and issues around costs, development is headed towards the community toilet. News reports have mentioned the development of a low cost device for cardio vascular screening developed by the Healthcare Technology Inno- vation Centre at the IIT-Madras Re- search Park in Chennai. This device, which is the size of a television set top box and costs Rs. 1 lakh and can be operated by someone with mini- mal training and skills, measures the stiffening of blood vessels. Currently, this is done by ultra sound machines which cost between Rs. 15-40 lakh. Then, there’s innovation in work flow processes. Take the case of malaria: Our partnership model allows hospitals even inTier three cities to install expensive scanning machines Amol Naikawadi, joint managing director, Indus Health Plus.
  9. 9. 15 LIFESCIENCE INDIA | October - November 2013 LSI COVER STORY between 2001-09, deaths due to this disease have remained almost unchanged, at just over 1000 million according to the National Vector Borne Diseases Control Programme (NVBDC) of the central government. The Centre for the Development of Advanced Computing (C-DAC) came up with MoSQuIT or Mobile based Surveillance Quest using Information Technology. Control of malaria is a thrust area under the UN’s Millenial Development Goals. Dr Medha Dhurandhar, associate director and head of the department at C-DAC, said, ”MoSQuIT helps keep a watch over the status of malaria in a group or a community. The solution also helps identify a potential outbreak of the dis- ease and provides an early warning to the state health sys- tem for its control. The solution also helps the state health agencies track the performance of the staff who, in turn, find it easier to work with than the paper based system.” Believing in the need for process and delivery systems in- novation, Indus Health Plus Pvt Ltd, a Pune based provider of preventive health check- ups with a multi-state footprint, has worked on the backend to deliver services which are accessible and affordable. Indus is focused on lifestyle dis- eases since these are spreading rapidly and preventive care could perhaps be the way to check their spread. “We have worked on innovating in the delivery mechanism. This is a price sensitive and under-served market so we needed to take out inefficiencies in the system. We partner with hospitals, high end diagnostics centres, etc and bring them the patients, the volumes, which brings down costs of the their high end equipment, provides preventive checks for patients and ensures that the medical equipment manu- facturers also win. Our partnership model allows hospitals even in Tier three cities to install expensive scanning ma- chines,” explained Amol Naikawadi, joint managing direc- tor, Indus Health Plus. Through this partnership, Naikawadi said they can af- ford to offer services at half the rate at which a hospital usually charges. Moreover, Indus Health Plus ensures that more people come in from rural areas to the Tier three cit- ies since everything, from check up to report handing over and counselling is done in the course of one visit. Another innovation has been in getting access to equipment that lies largely unused in hospitals in the late evenings. Indus Health Plus offers access to such machines till 2-3 am at its partner hospitals: again, it is tweaking the system to ensure that equipment is fully optimised. Traditional systems across the country have used copper containers as a storage for water. Now, with the rising costs of copper, Padma Venkat of the Bangalore-based Institute of Translational Health Research and Technology, has de- vised a copper coil which is inserted in a plastic jar. This low cost solution does the same job as the older traditional method: overnight exposure to copper kills all the organ- isms in the water, making access to clean drinking water a possibility. The canteen at the the modular laboratory at BARC, Mum- bai, sources half of its fuel from a bio-gas plant powered by food waste from the canteen. This is a technology which the laboratory is keen on commercialising but has not had too many takers. Stem Cell, animal health etc: There have been some developments in animal healthcare, with domestic dairies located as far apart as Punjab and southern Maharashtra where technology has been har- nessed to achieve better health management of livestock. Large dairy herds in Punjab and one notable example in Sangli district of southern Maharashtra, have used RFID tags for their animals. This allows them to track feed and health issues, all of which translates into higher revenues for the dairy owners and better products for the consumer. Poultry is another area where delivery of healthcare at the farmers’ doorstep has led to better practices. A fallout of this has been that when there have been bird flu outbreaks, these have been contained and the outbreaks have hap- pened wherever it has been a backyard operation and not an organised venture. This highlights a core issue in animal healthcare: sectors which are organised have better health- care and other management systems, hence better output, as opposed to a backyard operation where the individual farmer is left to fend for himself. Academicians are clear that not enough is being done in a collaborative manner between industry-academia and government. Some experts talk of using the government channel for healthcare delivery in an innovative manner, of the need to remove the target-oriented approach associated with government programmes. But in all cases, the empha- sis remains on partnerships: with government, NGOs, and most of all, with corporate entities.
  10. 10. 16 LIFESCIENCE INDIA | October - November 2013 LSI COVER STORY Our Need to Innovate T he global population is projected to rise from 6.5 billion in 2005 to 7.6 billion in 2020. It is also aging rapidly; by 2020, about 719.4m people – 9.4% of the world’s inhabitants – will be 65 or more, compared with 477.4m (7.3%) two years ago: i. Older people typically consume more medicines than younger people; four in five of those aged over 75 take at least one prescription product, while 36% take four or more. ii. Demand for effective medicines is rising, as the popu- lation ages, new medical needs emerge and the disease burden of the developing world increasingly resembles that of the developed world. iii. The leading pharmaceutical companies will lose be- tween 14% and 41% of their existing revenues as a re- sultof patent expiry. iv. Pharma is trying to find cost effective methods to im- prove its R&D productivity, if it is to meet the world’s unmet medical needs and capitalize on the market op- portunity that is now emerging. v. Tuberculosis -Disease impact: Estimated 2 million deaths per year, 90% in developing countries. Some 2 billion infected. vi. Malaria -Disease impact: Estimated 1 million deaths -Rajaseevan Founder Trustee Indian Centre for Social Transformation A Public Charitable Trust
  11. 11. LIFESCIENCE INDIA | October - November 2013 17 LSI COVER STORY per year, 90% in sub-Saharan Africa, mostly children under five years. Annually, 300-500 million people con- tract malaria. vii. Dengue / Dengue Hemorrhagic Fever -Disease impact: Estimated 24,000 deaths per year (probably an under- estimate; deaths could be as much as 1% of all infec- tions). 50-100 million infections per year, of which 250- 500,000 are the potentially fatal hemorrhagic form. There is an urgent need for a coordinated mechanism to fill this gap and support the translation of available scientific knowledge (for example genomics) into product leads. Meeting these needs requires a multi-disciplinary network of investigators working together as well as partnerships between industry and the public sector Bioinformatics is becoming increasingly important due to the interest of the pharmaceutical industry and biotechnol- ogy companies. A number of recent market research reports estimate the size of the bioinformatics market is projected to grow to $243 billion by 2010 i. Infectious diseases are now the world's biggest killers of children and young adults. Account for more than 13 million deaths a year – One in two deaths in developing countries" infectious diseases as stated by the WHO. ii. The Human Genome Project opens the field to estimate 80’000 - 100’000 new genes. The validity of this ap- proach has to be proven first. iii. Molecular fallout-In one recent analysis of 73 molecules that failed in Phase III, 50% of the compounds that failed did so because they could not be proved effective. Compounds with novel mechanisms of action failed more than twice as often as those using established ones. Such studies show that the industry is sinking large sums of money in developing molecules whose pharmacological impact it does not comprehend in suf- ficient detail beforehand. iv. Reducing the time of new drug discovery will benefit the Indian patients immensely as they will have quicker access to life saving drugs at an affordable price. v. The U R Rao Committee has projected that India needs well over 10,000 PhDs and twice as many M Tech de- gree holders for meeting its huge research and develop- ment needs, but India produces barely 400 engineering Ph.Ds a year. vi. There continues to be exciting new subfields of engi- neering, including nanotechnology, biotechnology, bio- informatics, information technology and logistics. vii. Today many students who are passing out from these colleges / institutes lack the appropriate training and qualifications even for entry-level jobs at pharmaceu- tical and biotechnology companies. Unfortunately, most undergraduate and graduate programs do not of- fer training in drug development, quality systems, and manufacturing. viii.In response the government has been increasing in- vestment in education and training as a proportion of national income. However, the effort has been inade- quate to address the direct needs of our country’s drug discovery needs or for that matter the global Pharma sector requirements. ix. However, the bottleneck seems to find the people with the knowledge and experience to exploit the incredible large data volumes that are created in this field. Our human capital Challenge Human resource development in New dug discovery in- strumentation is an area of concern today. The declining popularity of science and the unwillingness among the youth to take up science as a career will jeopardize India’s future. Imaginative and innovative programs would need to be undertaken to attract the students to drug discovery research and enhance the number of young scientists. 1. How do we become the global leader and supplier of Ph.D human resources for new drug discovery in the global arenaby the year 2015 from India? 2. How do we create the high quality Ph.D manpower that is capable of creating the lowest cost base for in- novation, a strategy pursued by other nations including China? 3. How do we develop Indian human resources who not only can compete but differentiate themselves doing high-value innovation? 4. How do we develop human resources who can not only work but understand the new technologies at the Phar- ma companies and help them to improve its under- standing of disease, reduce its R&D costs significantly and increase its productivity in the lab? 5. Indian Industry is capable but are struggling to find the required financial support towards infrastructure, in- strumentation, consumables etc. how can the Govt. of India help the industry by providing the support and grant for this kind of ventures? 6. How can the Govt. of India provide the same kind of educational system support for the industry towards
  12. 12. 18 LIFESCIENCE INDIA | October - November 2013 LSI COVER STORY accessing the global network of scientists/experts who can be asked to work in under this industry venture in India? i. For finding a treatment of a particular disease ii. For improving the use of other medicines iii. For developing solutions for prevention of specific dis- eases iv. For providing direction towards the enhancement of “quality of life” of patients and “healthy” individuals in India As computers become more powerful, it is increasingly fea- sible to simulate various aspects of the drug discovery and development pipeline in silicorather than undertake exper- iments or trials in the real world. This could lead to signifi- cant savings in both time and cost. As knowledge expands, it is becoming more possible to simulate complex interac- tions among targets and leads, and among all the proteins involved incomplex pathways within the body. The availability of trained professionals with required skill sets is a major issue, particularly in the area of biology. In- dia needs to invest in creating more academic institutions to develop and train researchers. Our mission is to make a difference to the quality of life by reducing the burden of disease. As the DBT’s, CSIR’s , ICMR’s and other government of India Science and Tech- nology, Ministry initiatives is to extend support for Ph. D. programmes, under the 11th plan for both for expansion and quality improvement which is our high priority too. India, with its rich intellectual capability, can be a leader in basic new drug discovery research, if proper strategic thinking, adequate funding and facilitating mechanisms are provided. If the problem of the dwindling number of young students opting for science and scientific R&D is not effectively addressed in the near future, India will cease to be a storehouse of quality technical manpower. Our na- tional laboratories, universities and higher educational in- stitutions have an aging faculty profile requiring infusion of quality young manpower. • Reverse Brain Drain n It is an encouraging first step from DBT’s, CSIR’s , IC- MR’s trying to attract the talent back in India n The Key question is how do we effectively utilize their talent and skills n Provide them the challenging work else retention can be a problem n Provide them the access to the World Class facilities to make them successful n Use these scientists to Seed and Generate new Drug Discovery PHD’s • Drug Discovery PHD Program n We would like to start a Drug Discovery PHD Program n We will take up a Disease of National Concern as a seri- ous Research Program n The PHD’s will be an outcome of the above Research Program n Focus of the PHD program will be an all round devel- opment of the Scientist n These scientists will have access to the world class fa- cilities • Post Graduate Degree in Biotech In- strumentation n This is an urgent need of the Industry, producing em- ployable Talent n The aim of this program would be n Students get to work on real time problems in Industry facilities n The Syllabus will be made tailored to the immediate In- dustry Needs n Soft skills development • Cheaper Access to World Class Re- search Facilities n The Public Research Institutes can be provided an at cost fee for the Services n Encourage the small and medium scale Industries to engage in Core research n This can be done by providing access to this facility at a subsidized cost Objectives New advanced health technology must help the poor and needy our best minds in science must engage themselves in providing solutions to the problems that can make a differ- ence to humanity.
  13. 13. LIFESCIENCE INDIA | October - November 2013 19 LSI COVER STORY Breakthroughs cannot occur unless our most creative brains dedicate themselves to these problems. We must create al- ternative paths of drug discovery, where India has distinct comparative advantage and a chance to win. 1. Create a PPP venture that will be managed by the in- dustry for effective implementation, maintaining the schedules, completing the milestones and it will be the responsibility of the industry to honor all the deliver- ables of the said project. 2. Introduce for the first time an integrated drug discovery instrumentation Ph.D program in the country that can cater to the Global drug discovery human resources re- quirements. 3. Develop a Joint collaborative project under the DBT’s, CSIR’s , ICMR’s special PPP program and set up an in- tegrated infrastructure for the DDI Ph.D program to be solely managed by the industry. 4. The Ph.D and training programs will be aligned for the current needs of the neglected diseases, pharmaceuti- cal industry research requirements and catering to im- mediate market demands or for bridging the skill gap. Bioinformatics research emphasis will be given to indi- vidual diseases hereditary and others by combiningBio- informatics with wet lab. 5. Strategic investments will be made for enhancing ex- cellence in the programs so that the Ph.D products are at the competitive forefront and to build the various operational processes that allow us to accomplish our primary missions. 6. Major investments to be provided for the setting up high-end information systems, construction of various discovery labs, team salaries for 5 years, supporting the quality faculty members, for designing the informative educational materials etc., training of specific manpow- er, providing the students with live projects, for brand- ing, research marketing activities and for getting the various quality certifications. Overall Objective To facilitate and support the discovery of new drug leads for tropical diseases through networks and partnerships between pharmaceutical companies, academia and disease endemic country (DEC) institutions.It is time that we need to develop more 'molecules to drugs' indigenously. We have the human power, but what we need to do is to organize ourselves to attain global standards. This is imperative if we have to develop products that are universally accepted. Since these involve different technologies like preclinical‘s, phase I and phase II clinical trials, pharmacology, bioinfor- matics etc, we need to develop co-operative skills. The Strategy and Implementation Plan 1. To establish an international standard infrastructure for drug discovery instrumentation as a center of excel- lence, this will be happening for the first in India. 2. To identify and coordinate the knowledge base of ex- perts involved in drug discovery research across the various Indian and International Academic, Research, Pharmaceutical, Biotechnology, Nanotechnology, In- strumentation and Product Development disciplines who could teach at this center. 3. To fully equip and make the COE-DDI operational with in 18 months from date of funds sanctioned. 4. To start the all the various training and drug discovery instrumentation Ph.D programs that are focused, prac- tical, create all the required leaders under this program and to make it fully operational by end of 2009 in In- dia. 5. To manage and train the high quality market driven re- search Ph.D manpower under this program. 6. To professionally manage this facility 24X7 for conduct- ing high quality research and managing all the training programs and schedules. 7. To attract world top 50 Biopharmaceutical companies to getting their required manpower from this center or for doing their research or design or innovation work. 8. To provide effective, user oriented support, drug discov- ery services, information technology, human resources, and offer the facilities. 9. Promote the global coordination of drug discovery ac- tivities through the network and partnership model. 10. Promote technology transfer and innovative drug dis- covery in the collaboration networks and partnerships. 11. Support targeted fundamental research on generation of new tools to facilitate drug discovery.
  14. 14. 20 LIFESCIENCE INDIA | October - November 2013 LSI COVER STORY LSI COVER STORRRRRRRRYYYYYYYYYYY 12. Establish an incentive system and culture that encour- ages team-based, multi-disciplinary progress.Manage the ownership of intellectual properties and valuation that results in intangible assets Outlining a practical business model i. The R&D programs models can be designed based on the strategic value, gestation period, technology risk and commercial potential of the technologies. ii. Huge investments made in this sector will have long gestation periods like a min of 7 years for breakeven to happen and to see its profitability a few years later. iii. Research funding must be made available during this period though some part will be supported by way of international outsourcing work. iv. Huge knowledge equity will be generated in form of new IP’s, patents, publications and of course a few pos- sible new molecules which will be the major output of this business initiative. v. In-house high quality research manpower and innova- tive process algorithms will be available for doing own drug research projects. vi. It’s a high risk business but does have its own BIG prof- its as its product development and research business. vii. The benefits of long-term R&D training programs are uncertain and the gestation period could be more than 10 years. Such initiatives may be unattractive for private sector funding and therefore, long term R&D programs will have to be funded by the government. viii.It is essential for the Center to initiate new drug de- velopment for diseases of relevance to Indian popula- tion not only presently but in the years to come as well. Based on this assessment the priority Center were identified as follows: i. Communicable and infectious diseases : T.B., Malaria, gastro intestinal infections, (e.g. cholera, hepatitis, etc.), kalaazar, filaria, H.I.V and sexually transmitted diseas- es (STD’s), lower respiratory diseases. ii. Cardiovascular diseases: Hypertension, atherosclerosis and myocardial infarction, coronary artery diseases, rheumatic fever and heart disease. iii. Cancer iv. Eye and ear diseases v. Metabolic diseases : diabetes, arthritis, dyslipidaemia and obesity vi. Neurological diseases: e.g. Alzheimer diseases, Parkin- sonism, Epilepsy. vii. Nutritionally linked diseases: Malnutrition,Aneamia,a vitaminoses. viii.Paediatric diseases: Neo-natal diseases to reduce infant mortality. ix. Reproductive diseases x. Respiratory diseases : Asthma and other allergic respi- ratory disorders. One of the major limitations to the future expansion of bio- informatics as there is a lack of trained personnel in this interdisciplinary field. Over the past 15 years, there has been a noticeable shift in these industries away from drug discovery toward drug development and commercial manufacturing. This shift in emphasis has created jobs in analytical chemistry, phar- macology, toxicology, regulatory affairs, bioprocess and process developments, validation, quality control, qual- ity assurance, clinical trials management, and large-scale manufacturing. This shift has also resulted in a decreased demand for science Ph.D.s--who are highly sought in drug discovery--and an increased demand for baccalaureate- and master's-level scientists to fill jobs in quality systems, regulatory affairs, clinical trials management, and manu- facturing. n Human Resource Development n Infrastructure Development n Focus on Research And Innovation n Promoting Drug Discovery Instrumentation Entrepre- neurship n Encouraging New drug discovery related Business n Educating leaders for tomorrow n Hiring and retaining brightest minds n Exploring new horizons n Enabling new capabilities n Opening new avenues for basic and applied research n Speeding new inventions n Accelerating technology commercialization n Creating high-tech life science industry n Making economic impact n Shaping the future of students Long Term Trends That Will Influence Bioscience Technologies n Aging Population n Systems Biology & Scientific Convergence n Customization of Therapeutics (personalized medi- cine) n Continued Innovation Explosion n Increased Distributed Computing n Miniaturization and Automation n Increasing Cost Containment n Focus Areas of Economic Development (by many gov- ernments/entities) n Improvements in Agricultural Production n Need for Education and Training n Bioterrorism (actual and preventive measures) Health n Advanced healthcare: genomics, imaging n Healthcare Management: Telemedicine n Genomics & Preventive medicine
  15. 15. 22 LIFESCIENCE INDIA | October - November 2013 LSI OUTLOOK A Prescription for Innovation Dr. Saji Salam MD, MBA I n 1998, two Stanford graduate students, Sergey Brin and Larry Page published a paper that be- gins: "In this paper, we present Google, a prototype of a large-scale search engine...” Not many know that research that led to the cre- ation Google was supported by the National Science Foundation and DARPA (Defense Advanced Research Projects Agency and NASA. Among other innovations that drew on US government funding support are the Internet, GPS devices, and DNA se- quencing technology. Israel produces more start-up compa- nies on a per capita basis than Japan, China, India, Korea, Canada, and all of Europe, and after the United States, Israel has more companies listed on the NASDAQ than any other coun- try in the world. Israel has less than one lakh engineers in all, while India churns out about 5 lakh engineers ev- ery year…. Foreign competition, an outdated manufacturing base and strained la- bor relations were just a few of the causes of the collapse of the steel in- dustry in the Pittsburgh region back in the 1970’s. When economic wellbe- ing is tightly coupled with one indus- try, its collapse can leave economic devastation in its wake. In an effort to reinvent itself Pittsburgh invested in education, healthcare and technology, which led new economic leaders to emerge. Research and development is a major driver in the new innovation- led economy, with more than $3 bil- lion pumped annually into area R&D programs. Innovation may be the hottest disci- pline around today in business circles and beyond. Innovation transforms markets and entire economies. It's the key to solving several social and economic challenges. Innovation in- volves variation, selection, and repli- cation. This article examines some of the criteria for success in innovation, especially for developing economies like India. Building an innovation economy is a collective effort that in- volves the entire society and is a re- sponsibility not limited to business and government. The Innovation Soup – Key ingredients This is the right time for India to en- hance the effort that has gone into building an innovation economy. At the same time, one needs to be realistic in term of the expectations in terms of the scope and timelines when it comes to return on investment. The mission to Mars was more than 50 years in the making partly due to the resources that could be deployed in the space research program given competing priorities post-Independence. As a more mature nation today with the knowledge gap with the developed world closing and knowledge acqui- sition becoming less expensive, the
  16. 16. LIFESCIENCE INDIA | October - November 2013 23 LSI OUTLOOK right policy measures can be applied to see results in a shorter amount of time. The fundamental challenge is to buildknowledgecapitalandenablethe right policy to drive innovation. When compared to the financing challenges for nation to fund the space research program, financing innovation today should not be a major concern. Good leadership especially in policy making is the need of the hour. Though various innovations models are available, and not one model suits every country, some of the enablers listed below are vital to the process of innovation. Knowledge Capital A central component of a capacity to innovate is access to advanced knowl- edge and the ability to successfully assimilate and utilize this knowl- edge. For any innovation economy, a critical factor necessary for success is a knowledgeable workforce. However the focus needs to be on quality and not quantity of resources as illustrat- ed by Israel’s teeming startups. Per NASSCOM, though India churns out half a million software professionals from various IT training institutions in India, only about 25% are readily employable. It is obvious that it is high time, we introduced quality controls in place. Barring a few of the reputed institutions, the quality and creden- tials of the faculty needs further scru- tiny. I have section later dedicated to social capital and the Indian diaspora, but would like to mention here that models like the Indian School of Busi- ness, led by NRIs can be replicated in other sectors as well. Industry Academia Col- laboration Per a recent All-India Council for Technical Education ( AICTE ) and CII report “Established institutes appear to have weak linkages with industry in the areas of research and consul- tancy, technology transfer, interaction between faculty members and indus- try,” states the survey report released last week. Out of 2,230 eligible colleges, only 660 engineering institutes, all well-es- tablished, participated in the survey. They were evaluated on the strength and quality of their linkages with in- dustry based on various parameters. The survey gave 98% colleges a rating of less than four on a scale of eight. On faculty-industry interaction, 93% institutes scored less than seven on a scale of 14. Following the report there has been a spate of finger pointing, but the real- ity is that many academic institutions in India need to really beef up their research capabilities to be relevant to the industry. Thanks to the Internet, the industry today is aware of the cut- ting edge research and development in several academic institutions across the world, driving up the expectations for academia in India working with fewer resources. Probably one way to bridge the gap is to have more indus- try experts teach part time at universi- ties. Other strategies include angel in- vestment funds set up by universities in partnership with industry. Please refer to case study on Institute of Bioinformatics & Applied Biotech- nology (IBAB) for a model that can be replicated by other states. Research and Development To make progress with innovation, it is imperative to prioritize fundamen- tal research; but given the long term nature of returns from fundamental research, involvement of industry will be limited. In the United States more than half of all fundamental research is financed by the federal govern- ment. One approach to leapfrog innovation is by outright purchase of technology from other universities and research organizations worldwide. Research collaborations with global universi- ties structured to research in priority sectors for the Indian economy can be another approach. Facilitating research by providing in- centives to multinational companies to setup research centers is yet anoth-
  17. 17. 24 LIFESCIENCE INDIA | October - November 2013 LSI OUTLOOK er way to create the knowledge capital required to leap frog into innovation. When a $ 2 billion healthcare fund came to India to identify companies to invest in medical devices sector, a company set up by alumni from a multinational research firm in Banga- lore was one of the very few compa- nies that got funding. The fund man- agers were not able to find many other quality opportunities worth investing in. This is a case in point where the knowledge capital generated by an MNC research firm resulted in an in- novative device company from India. Infrastructure For knowledge capital to bear fruit another key component required is infrastructure. Adequate laboratory and office space is vital for start-ups in sectors such as biotechnology. Shared infrastructure would be vi- tal especially for entrepreneurs who might not have the resources to in- vest in capital-intensive equipment/ laboratories. Biotech parks typically have “ready-to-go” laboratories and office space, providing opportuni- ties for startups to set shop at short notice. TechShop with three locations in the US is a chain of member-based work- shops that lets people of all skill levels come in and use industrial tools and equipment to build their own projects paying a low monthly membership fee. Techshop has the state of lasers cut- ters, welding and 3D printers among other tools, where you are working regularly with other entrepreneurs. According to a study of 120 countries by the World Bank, for every 10% rise in broadband penetration, there is a 1.3% rise in GDP. India ranks 122 in the world for fixed Broadband Penetration, with only 1.1 per every 100 inhabitants having broad band connectivity. However, mobile phone users have reached an astonishingly high number of 554 million. More than 298 million (54%) of the 554.8 million mobile users are in rural areas as compared to 256 mil- lion users in urban areas. The recent World Bank report quotes a study that an additional 1 percent of world GDP spent on infrastructure would increase global GDP by 2 per- cent and GDP in developing countries by almost 7 percent. Per McKinsey, investment in infrastructure of 1% of GDP would lead to 3.4 million jobs in India. Traffic in India has grown 150 times since 1951, while roads have grown by only 9 times. The poor qual- ity of the roads leads to $ 5-7 billion in annual economic losses. Investment in infrastructure in developing coun- tries is a no brainer. Social Capital – the diaspora effect Social capital is the expected col- lective or economic benefits derived from the preferential treatment and cooperation between individuals and groups. Although different social sci- ences emphasize different aspects of social capital, they tend to share the core idea that social networks have value. India has a diaspora in influen- tial positions in businesses and gov- ernments across the world. There are several ways in which diaspora can nurture the knowledge base in their home countries. One is by returning home with new knowl- edge gained elsewhere (e.g. Taiwan). This rarely happens on a large scale without professional and financial incentives provided by the govern- ment. The home country must be able to provide the infrastructure and ca- reer opportunities necessary to meet the aspirations workers may have developed during their stay abroad. Foreign direct investment is another option chosen primarily by the Chi- nese diaspora. A third contribution is by way of remittances to the home country. The Indian diaspora can be tapped in a multitude of ways, the need of the hours is knowledge transfer needed to bridge the knowledge gap in In- dia. Indian entrepreneurs needs role models to look forward to and unfor- tunately do not find many companies that have been successful overseas like the Israeli companies. Despite the “success” in the IT industry, the focus has been on providing low cost labor to developed markets and hence these IT firms are not the right role models for entrepreneurs seeking to innovate. Apart from the technical knowledge in subject areas India has a deep gap in marketing and packaging. The oth- er gap is access to global markets for innovative products. In some of the industries like medical equipment, the industry is virtually nonexistent and hence does not have a base to grow from. So there is work to be done in get- ting the diaspora to collaborate with entrepreneurs and policy makers in India. Policy makers could explore tax
  18. 18. LIFESCIENCE INDIA | October - November 2013 25 LSI OUTLOOK breaks, and other incentives to interest- ed NRIs. However the missing piece is a sincere outreach program to identify a new generation of overseas Indian tal- ent and get them involved in the inno- vation story. Legal and Regulatory Framework Innovation of the future being IP driv- en, and time to market will be key, streamlining intellectual property and regulatory framework would be vital to attracting global players to collabo- rate. Celera, the company that mapped the human genome, filed for over 6000 patents in one week. Intellectual Property Per Forbes, “in a recent study by the U.S. Chamber of Commerce, India (not China, whose intellectual property practices have received far more scru- tiny from American politicians and the media) ranked dead last in patent pro- tection and treaty participation, as well as second-to-last in copyright protec- tion - behind China and ahead of only Russia Starting in March of 2012, India be- gan issuing compulsory licenses for drugs under a new policy requiring lo- cal manufacturing, a condition which is clearly illegal under international trade law. The first compulsory license was issued on Nexavar, a Bayer can- cer drug. Then they began outright revoking patents, starting this past October with Sutent, on which Pfizer has a clearly valid patent recognized in over 90 countries. Similar moves to revoke and deny patents followed against Roche's Tarceva and Novartis's Glivec.” I am not an expert on intellectual prop- erty or the nuances of this specific sce- nario involving big pharma. However the global attention highlights that intellectual property will be central to a future of innovation. Capacity build- ing in intellectual property law experts should be a priority for policy makers. Regulatory Framework In August 2012, the Ministry of Corpo- rate Affairs set up the Committee for Reforming the Regulatory Environment for Doing Business in India. The proxi- mate cause of the establishment of the Committee was the Word Bank’s Doing Business Report which ranked India among the countries ranked at the bot- tom of various sub-indices. Among other findings, the report highlighted redundant regulations and sometimes rules and regulations created by cen- tre and states contradicting each other. The report submitted its report in Sep- tember 2013 with several recommen- dations. Step in the right direction, however acting on recommendations to simply regulations is what will make the difference. Legal System With regard to the legal system, though India has a more robust legal frame- work when compared to many other developing countries, the country faces a problem of delay in administration of justice. The 13th Finance Commission however made specific recommenda- tions for the grant of funds to improve justice delivery. The Union government announced a series of policy initiatives aimed at reducing pendency from an average of 15 years to three years. Once again, positive recommendations needs to be followed through with execution. Role of Government As discussed in previous sections, the government especially in developing countries has a major role to play in cre- ating a culture of scientific growth and innovation. The early investments by the government in space research is one such step which has been able to push India to the frontiers of space research. The government has a central role that runs across all the other enablers. Leadership: Leadership makes all the difference in making the transition to an innovation economy. A new generation of leaders in politics and business is needed to take the country forward on the path to Chief Innovation Of- ficer The Chief Innovation Officer for the country (ideally a technocrat) would at high level be focused on improving the key enablers of innovation, reporting to the Prime Minister’s Office. He/She must be able to n Identify and prioritize sectors for innovation n Review and propose changes to existing policies to enhance the enablers n Streamline various government initiatives in innovation and channel them in one direction n Minimize bureaucracy by or- ganizing for effective decision making n Work on Tax reforms, financial and other incentives to advance innovation n Create and implement financ- ing models in collaboration with investors n Review and deploy best practic- es in innovation used elsewhere n Collaborate with various departments/agencies in the government n Able to navigate the bureau- cracy and politics in India n Collaborate with external stake- holders across the globe
  19. 19. 26 LIFESCIENCE INDIA | October - November 2013 LSI OUTLOOK innovation. To bring innovation cen- ter stage, I would propose the creation of the role of Chief Innovation Officer for the country with counterparts in each state. (Refer CIO) Transparency Per research studies, one-unit in- crease in the corruption index reduces the growth rate by 0.45 -0.55 percent- age points. The most important channel through which corruption affects economic growth is political instability, which accounts for about 53% of the total effect. Efforts at transparency initi- ated by the Right to Information Act is a step in the right direction. How- ever we have a long way to go. Lack of transparency is a challenging es- pecially from an entrepreneurs point of view starting with basics like name for a company to trademarks. Though some of these functions have gone on- line and are available to public, there is a lot more to be done. With a new generation that lives and breathes so- cial networks, we will see even more demand for transparency. Perhaps a new generation of politi- cians will usher in the right level of transparency in government that can create exponential benefits to the economy. Incidentally studies show that increase in transparency leads to increase in foreign direct investment. Law and Order The primary role of the government is protecting life and property of its citizens. For an anecdotal perspec- tive of the impact of law and order on growth you don’t need to look further than Egypt, Libya and Syria three countries in turmoil which were un- til recently relatively stable political countries. These countries have much more than a law and order challenge today, the law and order challenge is threaten- ing to be a macro environment stabil- ity challenge. I am not going to take up much space here stating the obvi- ous connection. When your house is on fire you are not thinking of build- ing the next iphone or Google !!! Facilitate reverse brain drain In my discussion I point out the vital role of social capital especially the role of diaspora with extensive global ex- Case Study – Israel (Source: CORDIS, European Commission) Israel is especially strong in the early stage development of new projects and transforming innovative ideas into market- able products. This entrepre- neurial spirit encompasses a wide range of advanced tech- nology sectors from biotech- nology and medical equipment to electronics and electro- optics, Information Technology and software, communications and Internet applications, aero- space and new materials, safety and security systems. Many commercial develop- ments are spin-offs from the leading edge defense systems developed in Israel. Role of the government Expenditure on R&D in 2001 in Israel represents 4.5% of GDP compared to 1.6% in the UK, 2.3% in the US, 3.0% in Japan and 4.1% in Sweden. Israel's seven universi- ties as well as many colleges and government research centers are leading inter- national academic institutions in such areas as computer science and engineering, electronics and the sciences. Knowledge Capital • Israel has some of the world's finest universities, which excel in pioneering basic and applied research in medicine, the life sciences, agriculture, electron- ics, robotics, computer science, engineering, and energy as well as in emerging disciplines such as nanotechnologies. • Some 30% of the total R&D carried out in Israel (including the defense sector) and 45% of civilian R&D takes place at the country's universities, colleges and R&D centers. • About half of Israel's 220,000 students currently in academic programs are studying medicine, the sciences or engineering. • Israel has 135 academically educated engineers and scientists per 10,000 popu- lation compared to 81 per 10,000 in the US. • There are nearly 70,000 scientists and engineers working in advanced technol- ogy industries. • There are 30,000 scientists and engineers engaged in academic research. Industry Academia Collaboration • Israel's universities work closely with industry. University researchers have a keen awareness of market needs and hands-on industrial experience. At the same time scientists and engineers in Israeli industry maintain their rigorous academic standards and openness to new ideas, directions and discoveries. • All seven universities have their own technology transfer companies, which take out thousands of new international patents each year. • Most Israeli universities have holdings in technological incubators for start-up companies and have ties with nearby high-tech industrial parks.
  20. 20. LIFESCIENCE INDIA | October - November 2013 27 LSI OUTLOOK perience in a variety of business and technology areas. It is therefore es- sential for the government to devise ways to facilitate reverse brain drain. The model followed by Taiwan can be a pointer in this direction. As part of its expanding effort to re- cruit overseas Taiwanese for both state-run and private entities, the ROC government has often sent tal- ent search missions to organize sev- eral job search workshops in San Francisco, Los Angeles, Dallas, and New York as a means of locating tal- ented overseas Taiwanese since 1995. Perceiving a need to speed up indus- trial upgrading projects in Taiwan, the government is currently offering sal- ary subsidies5 to indigenous private enterprises for the sole purpose of at- tracting overseas-trained Taiwanese in the areas of technology, research and development (R&D), manage- ment, and marketing. Tax Policies and other incentives There are a variety of tax policies, in- cluding tax holidays, R& D tax cred- its, and other tax related interven- tions that government does and can do more to attract NRIs, Investment funds, MNC research organizations etc. I have emphasized the need to provide ample tax benefits for early stage investors since that can make a dramatic impact in funding for inno- vative companies. PublicPrivatepartnership(PPP)models The public private partnership mod- els when implemented in a win-win manner can go a long way in pro- moting innovation. (please refer to the figure on IBAB) Apart from PPP the government has been active in promoting various incubators, and I guess it is about time that economists and academia started to evaluate the success of these models. Finance In my mind deployment of financial resources is one of the most criti- cal factors for an innovation econo- my. This calls for close coordination among various government agencies to formulate and implement policies to finance innovation. Direct funding by government by way of grants and loans has been a policy of the govern- ment and agencies like BIRAC have been very successful in the biotech sector in funding startups. Financing innovation needs suitable financing partners during the early stages. Angel investors and venture capitalists play a key role in this crucial stage. Policy makers can make tremendous impact by reforming existing tax structures and capital gains and profit repatria- tion policies to reward these firms for risking their capital in early stage ventures. If done right this interven- tion can accelerate entrepreneurship and innovation in the economy. Tar- geted tax benefits for angel investors and VCs would provide the best value vs growth stage investors such as pri- vate equity players. A tiered incentive model that rewards investors based on the risks and industry sectors that early stage investors focus on could be a winning strategy. Banks can be pushed to improve credit deposit ratios, in states where the credit deposit ratio is poor. China for instance, provided more than $30 billion in credit to the country’s larg- est solar manufacturers through the government-controlled China Devel- opment Bank. In conclusion, a multipronged ap- proach is necessary to transform the country into an innovation led economic model. It calls for indus- try, academia, government and so- ciety working collaboratively with a common sense of purpose. Lessons learned from India and abroad can be leveraged to make this transition. The time is right to build an foundation for innovation which will bear fruit in the years to come. IBAB – a new model for PPP in technology The Department of IT & BT, Government of Karnataka, in association with ICICI Bank established the Institute of Bioinformatics and Applied Biotechnology. ( The evolution of this institute involves some of the successful strategies utilized by academic facilities in global economies. This may be a model that facilities in other states could follow. Role of Government ü A government initiative in collaboration with ICICI Bank Industry Academia Collaboration ü Biocon, Merck, Astra Zeneca endowed Faculty Chairs at IBAB GANIT Labs is a partnership between IBAB and Strand Life Sciences. Social Capital ü Nobel Laureate Venkatraman Ramakrishnan, and others share knowledge, has several internationally experienced professionals faculty Knowledge Capital ü Generates Knowledge capital in advanced bioinformatics Incubation of an immunologist entrepreneur Finance ü ICICI ventures in collaboration with the government Intellectual Property ü Neem sequence database, sweet proteins that can replace low calorie sweeteners Infrastructure ü World class infrastructure for bioinformatics
  21. 21. 28 LIFESCIENCE INDIA | October - November 2013 LSI SPOTLIGHT -Dr.S.Jayaprakash Innovations in Healthcare can be attributed to various factors like improvement in healthcare technology, spread of infrastructure, innovations in healthcare financing schemes, improvement in observing healthcare behavioural economics etc. Healthcare Scenario in India Innovations and Improvements
  22. 22. LIFESCIENCE INDIA | October - November 2013 29 LSI SPOTLIGHT O ptimal health of a person depends upon the habits and living conditions and availability of medical facilities. There is an adage that ‘Food itself is a medicine’. The growth of agricultural sector itself will help people to overcome various issues re- lated to malnutrition etc. India has progressed significantly due to the advancements in agriculture, health infrastruc- ture and also the availability of immunization vaccines, there are other factors that determine the health system. A few factors are as below • Demographic trends – India is second largest popu- lated country in the world, the issues related to popula- tion growth should be a problem. • Social trends – Increase of urbanization and related issues both at rural level and urban level should pose challenges in providing Healthcare. • Life expectancy - Life expectancy denotes the expected number of years that a child born today will survive. Health infrastructure and demographic issues play vital role in the life expectancy. As life expectancy at birth and at older ages lengthens, the quality of that longer life becomes a major issue. This creates a new concept of ‘Healthy life expectancy’. It refers to the av- erage number of years that a person may expect to be free of limitation of function due to one or more chron- ic disease conditions. This also warrants for creation of infrastructure for ‘Geriatric’ (old age related) diseases. • Mortality - Mortality varies from region to region and various diseases has accounted for higher rate of deaths In the pre-independence era, India has witnessed lot of deaths due to various epidemic diseases, our freedom fighters and national leaders having witnessed the same felt the need for giving more importance to the healthcare in the independent India and hence health was mentioned in the constitution of India. However, ‘Right to Health’ is not included as fundamental right in our constitution. However, it is imposed in the Directive Principles of state Policy wherein it directs the state to be responsible to take care of the health of its people. But it also kept check on the central government by placing some of the health care is- sues in the concurrent list like population control and fam- ily welfare, medical education, prevention of food adulter- ation, quality control in manufacture of drugs etc. which means that both centre and state has the responsibility to issue legislations based on the dynamics. Central Govern- ment has also taken important initiatives like Rashtriya Swasthya B ima Yojana (RSBY) in the recent past. RSBY has been launched by Ministry of Labour and Em- ployment, Government of India to provide health insur- ance coverage for Below Poverty Line (BPL) families. The objective of RSBY is to provide protection to BPL house- holds from financial liabilities arising out of health shocks that involve hospitalization. Beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000/- for most of the diseases that require hospitalization. Govern- ment has even fixed the package rates for the hospitals for a large number of interventions. Pre-existing conditions are covered from day one and there is no age limit. Cover- age extends to five members of the family which includes the head of household, spouse and up to three dependents. Beneficiaries need to pay only Rs. 30/- as registration fee while Central and State Government pays the premium to the insurer selected by the State Government on the basis of a competitive bidding. Significant Achievements in India due to Healthcare Innovations Changes in Life Expectancy at Birth Life expectancy in India has more than doubled in the last sixty years. It increased from around 30 years at the time of independence to over 63.5 years in 2002-06. Although the decadal increase has slowed from 5.7 years in the 1970s to 3.2 years in the 1990s, the overall life expectancy increased by 14.1 years in the rural areas and 9.9 years in the urban areas during the period 1970-75 to 2002-06. The wide vari- ance in performance across states is of special concern. While inKerala, a person at the time of birth is expected to live for 74 years, the expectancy of life at birthin states like Assam, Bihar, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh is in the rangeof 58-62 years Improved Child Survival India’s infant mortality rate too has shown a steady de- cline, from 129 deaths per 1,000 live births in 1971 to 53 in 2008. The rate of decline has been slowing, from 19 points in the 1970s to 16 pointsin the current decade. Currently the urban IMR is 36 as compared to the rural IMR of 58.
  23. 23. 30 LIFESCIENCE INDIA | October - November 2013 LSI SPOTLIGHT Decreasing Maternal Mortality The problem in estimating MMR has been the fixing of a reliable denominator due to the comparativerarity of the event, necessitating a large sample size. However, given this constraint, data suggeststhat India had a MMR of 460 in 1984, declining to 254 deaths per 100,000 live births in 2004-2006. The Causes of Deaths Communicable diseases, maternal, peri natal and nutri- tional disorders constitute 38 per cent of deaths. Non-com- municable diseases account for 42 per cent of all deaths. Injuries and ill-defined causes constitute 10 per cent of deaths each. However, it should be noted that the incidence of diseases like Malaria, Tuberculosis, Dengue Fever (Com- municable) and Incidence of non-communicable diseases like Cancer is on the raise is a matter of concern HIV Prevention and Control India had an estimated 2.27 million HIV-positive persons in 2008, with an estimated adult HIV prevalence of 0.29 per cent. This is nearly 7 per cent of the global burden of 33 million HIV cases. Integrated Disease Surveillance Programme Disease surveillance means early detection and timely re- sponse to disease outbreaks.Which requiresconstant con- tact with multiple sources of information—health workers, laboratories and healthfacilities, and capacity for prompt investigation into each outbreak. Towards achieving this anetwork of regional laboratories have been established and the aim is to put an epidemiologist inplace in every district Trends of Communicable Diseases in India Dengue, Chikungunya, HIV-TB Co-infections, Cholera , Japanese Encephalitis, Leptospirosis, Novel H1N1 Infec- tions shows increasing trends. Diseases like Poliomyelitis, Tuberculosis, Neonatal tetanus, Measles, HIV/ AIDS shows decreasing trends. Diseases like Small pox, Guinea worm has been eradicated while Leprosy was eliminated. The Public Health Sector The provision of health care by the public sector is a re- sponsibility shared by the state government,Central Gov- ernment and local governments. General health services are the primary responsibilityof the states with the Central Government focusing on medical education, drugs, popu- lationstabilisation and disease control. The National Health Programmes of the Central Governmentrelated to repro- ductive and child health and to the control of major com- municable diseases likemalaria and tuberculosis have al- ways contributed significantly to state health programmes. Morerecently, under the NRHM, the Central Government has emerged as an important financier of statehealth sys- tems development. Government health care services are organised at different levels. Primary health care is provided through a network of over 146,036 health sub-centres, 23,458 PHCs and 4,276 CHCs. Atthe district level on an average there is a 150- bedded civil/district hospital in the main district townand a few smaller hospitals and dispensaries spread over other towns and larger villages. The Private Health Sector At the time of independence only about 8 per cent of all qualified modern medical care was providedby the private sector. But over the years the share of the private sector in the provision of healthcare has at about 80 per cent of all outpatient care and about 60 per cent of all in-patient care. The private sector in India has a dominant presence in all the submarkets—medical educationand training, medical technology and diagnostics, pharmaceutical manufacture and sale, hospitalconstruction and ancillary services and, finally, the provisioning of medical care. Over 75 per centof the human resources and advanced medical technology, 68 per cent of an estimated 15,097hospitals and 37 per cent of 623,819 total beds in the country are in the private sector. Of thesemost are located in urban areas. Of concern is the abysmally poor quality of services being providedat the ru- ral periphery by the large number of unqualified persons. Its relationship to health outcomesat the population level has never been established. The private sector’s predominance in the health sector has led to inequities in access to healthcare. Hospitalisation rates among the well-off are six times higher than those among the poor.Such inequities lead to a situation where women from families who can afford suffer unnecessary- Caesarean operations in delivery of babies —in some urban centres close to half the deliveries areC-sections—while in contrast poorer, rural women are more likely to die during childbirth due tolack of access to these operations. Health care Human Resources One international norm is a minimum of about 25 skilled health workers per 10,000 population (doctors, nurses and midwives) in order to achieve a minimum of 80 per cent coverage rate for deliveries by skilled birth attendants or for measles immunisation as seen in cross-country analysis (JLI, WHO, 2006). Workforce estimates based on the 2001 Census suggest that there are around 2.2 million health workers in India but these are based on self-reported occu- pation which is susceptible to unqualified providers being counted as qualified ones. Adjusting for this, the density of health workers falls to a little over 8 per 10,000 population of which allopathic physicians are 3.8 and of nurses and nurse-midwives are 2.4 per10,000 population. Allopathic
  24. 24. 32 LIFESCIENCE INDIA | October - November 2013 LSI SPOTLIGHT doctors comprising 31 per cent of the workforce, followed by nursesand midwives (30 per cent), pharmacists (11 per cent), AYUSH practitioners (9 per cent) andothers. It is im- portant to note however that the overall health workforce estimates do not includethe substantial number of commu- nity health volunteers and workers introduced under the NRHMafter 2005. The nurse-doctor ratio in India is heavily skewed in favour of doctors. According to a computationfrom census there are approximately 1.2 nurses and midwives per allopathic physician. In comparison,developed countries such as USA and UK have nurse-physician ratios of 3 and 5 respectively. Almost 60 per cent of health workers reside in urban area. This mal-distribution is substantiallyexacerbated when adjusted for the larger share of the population residing in rural areas. Themajority (70 per cent) of health workers are employed in the private sector. According to the 2001 Census, almost 60 per cent of health workers reside in urban areas, which skews their distribu- tion considerably. The density of health workers per 10,000 population inurban areas (42) is nearly four times that of rural (11.8) areas. The majority (70 per cent) of healthwork- ers are employed in the private sector. Innovations in Health Economics Steps taken by India at various stages in providing health- care to the people, how health played important role in various laws and regulations etc. For any health care re- lated expenses, the role of out of pocket expenses happens at some level. Even if the health care is provided at ‘Free of Cost’ in any Government hospital, there are other health related expenses in the form of transportation, recuperating expenses etc. In this context, it is important to know about the role of Health Economics, its importance, how health- care financing happens across the globe and what are the lessons for India. Also, Health insurance is emerging as an important factor to bridge the gap in these days, thanks to the critical role played by schemes like RSBY. While the student will know about various health insur- ance models in the following chapters, it is important to know about the history and growth of health insurance in India so that they can appreciate the role of health insur- ance in the contemporary era • India is increasing its visibility in the global arena on various accounts, be it is nuclear treaties, Oil explora- tions, investment climate etc. Having the attraction and attention of the global investors and countries in various stocks & options, Analysts and analytics are revolving around the number games of stock market indices, inflation rates. The growth predicted is based on various factors like distinct demographical factors of youth population, rich natural resources etc. Accord- ing to 2011 census, India has 1.21 Billion populations and is second populous country after China and more than half of the population is young which an enviable proportion when compared to other countries is. • At this juncture, If India could take care of the health care needs and make the population as healthy, India as a country depending more on its human resources for excelling in many streams can make it possible to become the superpower. If we can assume that each citizen to be a capital asset, it is important to preserve the capital value of the individual and improve his pro- ductivity through various measures like Education, Health care etc. to keep him contributing to the Gross Domestic Product (GDP). Any lacunae in this will ei- ther (a) reduce his productivity or (b) develop the Busi- ness Continuity Risks for the nation. Even at the micro level, every organization wish to perform annual medi- cal checkup for its key employees to identify the diseas- es at the earliest and also to avoid any losses to due to health care related absence. To be in precise Economics has taken the centre stage in the contemporary politics & Governance, and hence it is the need of the hour for integrating more of economics with health by increas- ing the focus on the branches of economics viz. health economics, Behavioral Economics etc • Health Economics is a branch of Economics that deals with the efficiency factors of the health care delivery and consumption. Even the developed countries like United Kingdom or United States of America face the issue of affordable healthcare. There are still lot of wait- ing to get major surgery done in the UK hospitals that makes it difficult for those countries to get an efficient ‘Demand-Supply Equilibrium’. Even in the US presi- dential elections, Health care becomes one of the criti- cal factor in deciding the election of the president. • Due to rising cost concerns, concepts like ‘Medical Tourism’ is on the raise wherein people travel to coun- tries like India, Philippines, Thailand to get treatment at lower cost. Approximately, more than 3 lakh people travel to India every year for the medical treatments which also shows that we have best quality doctors and hospitals in the world. There are lot many learning’s for India from the models of other countries and similarly, there are various learning’s for other countries from In- dia. To be precise, no health care system can be perfect The nurse-doctor ratio in India is heavily skewed in favour of doctors. According to a computation from census there are approximately 1.2 nurses and midwives per allopathic physician
  25. 25. LIFESCIENCE INDIA | October - November 2013 33 LSI SPOTLIGHT and lot of changes happen very often. Health Econom- ics tries to achieve the optimum utilization of resources in order achieve efficiency in the health care delivery mechanism and the way it is consumed as well. • In this aspect, Health Insurance should also be consid- ered as part of the health economics because; health in- surance enables the financing aspect of the health care through risk pooling mechanism. • Health Economics also gains importance in the context of lack of Demand Supply Equilibrium, Issues pertain- ing to Rising Health care cost, behavioral economics, sociological changes etc. The issues are highlighted in the following sections. Application of Behavioral Economics in Health care • In India, controls over the health insurance sector is not wholly rested with the regulator as it has limited pow- ers over the hospitals wherein Medical council of India has more controls over the hospitals. Hence it requires an integrated approach to solve the problems. Health Insurance is mostly seen as a subject of insurance & medical care and there is an immediate requirement to view the health insurance as part of the econom- ics to understand the sector in a better way. Especially given the fact that India is a multi-facetted country in terms of religion, demography, language and cultural factors this becomes very important for understanding the health care needs of the people and matching their expectations. • For an example the behavioral economics stream, which discusses about the emotional factors that influence the purchasing decisions, the extent to which it affects the market equilibrium etc? Behavioral economics present various themes like ‘heuristics’ where it says that people take most of their decisions based on the ‘rule of thumb’ and the way a problem is presented to the people will affect the action. • Some of the concepts fit very well with respect to the health insurance and especially Indian scenarios. The concept of hyperbolic discounting explains well about the claims made by the people in the first year of health insurance. Hyperbolic discounting refers to the empiri- cal finding that people generally prefer smaller, sooner payoffs to larger, later payoffs when the smaller payoffs would be imminent; but when the same payoffs are dis- tant in time, people tend to prefer the larger, even
  26. 26. 34 LIFESCIENCE INDIA | October - November 2013 LSI SPOTLIGHT though the time lag from the smaller to the larger would be the same as before. This hyperbolic discounting oc- curs to large extent such that people take health insur- ance policies and in the first year claim the possible and switch over the health insurance company taking ad- vantage of the lack of integrated data base of claimants that is shared among the insurance companies. But at the same time, if you are able to keep the policyholder away from making claim for the initial year, the prob- ability of the claims goes down. This principle was ap- plied in some of the products in India wherein the policy condition states that ‘4 claim free years’ will make poli- cyholder eligible for the coverage against pre-existing diseases. The above example is only an instance of the successful application of behavioral economics princi- ples in the insurance. Health Economics and Rising Healthcare cost • Rising healthcare costs impact the developed economy and developing economy in a different manner. While in developed economies, it is estimated by experts that it will double by 2050. Standard & Poor infact warns developed economies that it will be difficult to man- age the healthcare spending compared to developing economies. One of the reason for this may be due to the higher old age propositions of the country citizens. However, developing economies may not have such an issue of adverse old age proposition, however, they will have budgetary challenges. • To overcome any challenges related to healthcare cost and spending, it is important to leverage upon the tech- nological advances, increase preventive medical care apart from looking at the factors of increase in infra- structural challenges, sociological challenges etc. Sociological challenges and Health care and Economics. • Statistics indicate that 94% of our labor force falls un- der ‘Unorganized Sector’ which tantamount to close to 43 crores of people. 1.5 Crore families are pulled Be- low Poverty Line every year, due to Medical expenses. All macro economic factors like Inflation etc. pull more people. There are instances wherein some families mi- grated to a nearby town by selling their land and other assets in their village, for better treatment in big hos- pitals. After migrating, they usually take up other un- skilled jobs to pay for daily expenses in the city while undergoing the treatment concurrently. Unfortunately, the majority of this workforce is illiterate, impoverished and lacks any fall back plans to take care of their fami- lies when they fall sick. Most of these workers visit such hospitals only when they start to suffer from chronic diseases. By the time, they reach the hospital, it is either too late or they lack the required money for treatment. Some workers cannot afford to be hospitalised for a few days because of loss in their daily earnings. Sometimes, this also leads to social dissatisfaction among the mi- grants as they see the other segments prospering with wealth benefitted by liberalisation policies. • Statistics indicate that nearly one million Indians die every year due to inadequate healthcare facilities; Some 700 million people have no access to specialist care, as 80 per cent of the specialists live in urban areas. With a world average of 3.96 hospital beds per 1000 individuals India stands just a little over 0.7 hospital beds per 1000 people. • Despite the fact that it is the second most populated country in the world, the budget allocated for health care by the government of India is currently less than 2 per cent of the GDP currently. Consequently, the pub- lic’s out-of-pocket expenses are around 4.75 per cent of the GDP. Every year millions of people fall below the poverty line (BPL) due to their personal spending on healthcare. With the down turning factors of reces- sion, economic volatility, inflation and unemployment there are chances that even more people will fall into poverty. A quick analysis indicates that the majority of those who are pulled to BPL belong to the unorganised sector. • Needless to say, the workforce forms the basis of any nation’s economy. The National Sample Survey Or- ganisation had recorded total employment in both the organised and unorganised sectors as 45.9 Crore work- ers (2004-2005), of which unorganized workers formed 94 per cent. Out of the 43.3 Crore unorganised workers, 26.9 Crore workers were employed in the agriculture sector, 2.6 Crore in construction and the remaining in manufacturing activities, trade and transport, commu- nication and services. A large number of unorganised workers were home based and were engaged in occupa- tions like bidi-making, agarbatti-making, papad mak- ing, tailoring, servant maids and embroidery work (list is only indicative). Sociological dynamics and its impact • A few decades ago, the joint family system was highly present in India to take care of the needs of an ailing family member. But with sociological changes, the joint Health Insurance is mostly seen as a subject of insurance & medical care and there is an immediate requirement to view the health insurance as part of the economics to understand the sector in a better way
  27. 27. LIFESCIENCE INDIA | October - November 2013 35 LSI SPOTLIGHT family system is slowly disappearing in India leaving the family in a lurch. • India is predominantly an agriculturally based econ- omy. Agricultural labourers form the majority of the unorganised sector. A drop in the agricultural based income for these labourers made many of them migrate to nearby cities for jobs. The government of India rec- ognised this and subsequently launched a scheme, ‘Na- tional Rural Employment Guarantee Act’ (NREGA). • The NREGA scheme aims to enhance the livelihood security of people in rural areas by guaranteeing one hundred days of wage-employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. Under this scheme, approxi- mately Rs.100 per day were guaranteed for 100 days of work per year. However, this also has side effects. The agricultural labourers who stayed in villages moved to places that ran NREGA schemes for better wages leav- ing challenges for the landlords to hunt for replacement agricultural labourers. Even if the landlords could get the labourers, the wage demand of those labour- ers increased by more than 100 per cent compared to the past, as they guaranteed higher wages under the NREGA scheme. The end result is the increase in the cost of agricultural produce, the increase in purchasing power of the rural mass which is also one of the factors for inflation in rural India. • To save poor people from spending on healthcare that usually leads to bankruptcy, the government of India has introduced a laudable scheme ‘Rashtriya Swasthya Bima Yojana’ (RSBY) scheme which is health insurance for the poor. Beneficiaries under RSBY are entitled to hospitalisation coverage of up to Rs. 30,000/- for most of the diseases that require hospitalisation. The govern- ment has even fixed the package rates for hospitals for a large number of interventions. Pre-existing conditions are covered from day one and there is no age limit. Cov- erage extends to five members of the family which in- cludes the head of household, spouse and up to three dependents. Beneficiaries need to pay only Rs. 30/- as registration fee while the central and state government pays the premium to the insurer selected by the state government on the basis of competitive bidding. It has to be mentioned that both NREGA and RSBY have various implementation challenges as well and NREGA beneficiaries are also covered under RSBY scheme thus making India as a country having widest coverage of Health Insurance beneficiaries in the world. Stitching the gap for the unorganised segment. • Though RSBY is definitely a welcome move, this does not deter the poor from falling sick. If we consider that Phase A is a period wherein these workers contract diseases and Phase B is a period wherein they require secondary care treatment, then the RSBY scheme takes care of Phase B but only Rs.30000. There is no scheme to take care of Phase A. • Care during Phase A is provided by medical camps run by voluntary organisations. Without access to care, unorganised workers may contract contagious or life threatening diseases that remain undiagnosed and un- treated. Until severe symptoms show, they usually work at a gruelling pace to earn their daily bread. These are the people who will later sell their eyes to buy a ‘paint-