Financial Daily from THE HINDU group of publications
Saturday, Jan 11, 2003
Industry & Economy
`Investing in health will reassure foreign investors'
P.T. Jyothi Datta
Mr Jeffrey Sachs
NEW DELHI, Jan. 10
THE launch of the Indian Commission on Macroeconomics and Health (CMH) was the ostensible reason for the recent visit to India by celebrity economist Professor Jeffrey Sachs, Director, Earth Institute - Columbia University.
At a couple of high-profile meetings with the Union Health Minister, Mr Shatrughan Sinha, and the Union Finance Minister, Mr Jaswant Singh, Mr Sachs, who is also Advisor to UN Secretary-General, Mr Kofi Annan, underlined the need to scale-up the Government's health expenditure from the current level of less than one per cent of the national income.
As the Chairperson of the WHO-CMH, Professor Sachs spoke exclusively to Business Line on a range of health-related issues, including why managing public health made good economic sense.
You visited China last month to set-up the commission. How does it compare with India in terms of managing public health, particularly the spread of AIDS?
China has better health achievements than India, for instance, its life expectancy around 70 years stands compared to India's below 60. AIDS, which is significantly rising in both countries, is lower in China than in India.
Estimates in China are around one million, in a population of 1.3 billion, where as in India the estimates are around 4 million, in a population of one billion.
In both cases, the Government is just starting to address the issue after many years of considerable neglect. Both are in the early stage of coming up with a strategy.
Neither country has formulated a strategy for treating people already infected. The epidemic is prevalent, but it has not spread to explosive levels. We are urging Governments in China and India to take more corrective steps so that it does not get out of hand.
Authorities feel that India has greater health concerns such as infectious diseases, rather than HIV/AIDS. Why is India being singled out and why now?
The reactions following Gates' visit was why just focus on AIDS when there are other problems like tuberculosis (TB), respiratory diseases, lack of safe drinking water and so forth. That reaction is understandable.
However, there should be an increased focus on several killer diseases that have a major impact on India's economic growth. What I told the Finance Minister and the Health Minister is that it is time for a broad scaling up of investing in health. India needs a major increase in health investment in AIDS, Malaria, TB, safe drinking water and so on. The focus of the India Commission is to say, it's not just AIDS, but it's also AIDS.
One of the concerns is that the western world's relentless focus on our developmental problems could inhibit foreign investors.
I think foreign investors will be relieved to see India making major commitments in health and education, because foreign investors know that it is not just the infrastructure in terms of the ports and the roads, it is also a matter of the health and the quality of the labour. To see a Government taking a long view on expanding investments in healthcare and the quality of human potential would in fact be reassuring.
What is your suggestion to resolve the paradox facing India - where domestic pharma companies are active in the global anti-AIDS segment, while infected people in India are not able to afford the drugs?
Generic drug manufacturers such as Cipla can work with the Government to create a system where people infected with AIDS can access medicines at low costs.
India has an advantage as it has an active domestic industry. But poor people cannot afford those drugs, even at the low prices that Indian companies sell them abroad, at $300 per year. The Government can access funds from the Global Fund for AIDS/ TB and malaria to procure the drugs at low costs from the company and make them available through the public system.
The recent WTO meeting had US drug majors and pro-generic countries not reaching a consensus. What is the way forward?
There is a general agreement that any country can issue a compulsory licence so that its domestic companies can produce for the domestic market.
The debate is about how poor countries that do not have domestic production capacity can access generic drugs from countries such as India. While everyone agrees in principle that a poor African country without a domestic capacity should have the right to buy certain drugs from generic producers, the debate is on the scope of the principle.
Should it apply only to the poorest of the poor countries or also other low-income countries. Should it apply only to HIV/AIDS, TB and malaria drugs or to other drugs as well?
I tend to support a broader interpretation that says that lower income countries should be able to gain access to generic drugs under the trade rules for a wide range of essential purposes, not just the mentioned diseases. Under that broader interpretation, there is also the commercial role for Indian companies to sell abroad, which I support. The basic principle is that public health in the low-income countries should be ahead of the intellectual property right (IPR) guarantees to the patent-holders.
With such an opinion, do you not face a confrontation with the US drug majors?
I support their IPR in the high-income markets. They need to make profits on their research and developments and so we should have strong patent protection in high-income markets. However, they should not and cannot expect to make profits in low income countries where people are dying for lack of access to drugs.
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