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The Bill and Melinda Gates Foundation (BMGF) called it the “decade of vaccines”. In 2010, the foundation pledged some $10 billion to help research, develop and deliver vaccines in developing countries, including in India. It spent more in India—$282.5 million—in 2017 as compared to any other country, pouring all of it into building a supply chain and ensuring demand for vaccines in the country.

And now it wants to withdraw, leaving the Indian government to foot an enormous bill. This is one of the main reasons the government’s healthcare expenditure could shoot up in the coming years. 

BMGF and the network of vaccine makers it funded is just the tip of the iceberg. The past decade has seen a slow march towards privatisation of healthcare. This, in a country that sorely needs government intervention to provide for the millions in need but without the means to access quality healthcare. 

The 2011 census put the population of India at 1.2 billion. That number is expected to rise to 1.37 billion by 2020. That’s an addition of nearly 170 million people—if it were a country, it would be the world’s eighth most populous.

Per capita public expenditure on health has grown in the same period. It has gone up from Rs 621 ($8.7) at the turn of the decade to Rs 1,657 ($23.2) in 2017-18. However, as a percentage of GDP, allocations for health continue to remain inadequate, lagging behind neighbouring countries. Including expenditure by states, this amounts to 1.4% of GDP. Nepal, on the other hand, spends 2.3%, while Sri Lanka spends 2%.

With the government taking up more of the burden of preventative healthcare—vaccinations—on its shoulders, it passed the burden of curative healthcare on to hospitals. The onus, therefore, was on private players to provide healthcare to those who cannot afford it.

Through its ambitious $1.54 billion health insurance scheme, Ayushman Bharat, the government fixed treatment prices, racking up a hefty bill for insurance premiums in its quest to make healthcare affordable for nearly 500 million people. In parallel, hospitals had to lose money in the process, too. They were already reeling after the implementation of the Drugs (and Prices) Control Order (DPCO) 2013, which placed caps on the prices of various essential drugs.

As a result, both large and small hospitals have either faced losses or been put up for sale in recent years. The private equity net kept snapping them up. Meanwhile, e-pharmacies remained in legislative limbo, fighting battles with brick-and-mortar pharmacies that wanted to keep the retail drug industry, worth some $13.4 billion, to themselves.

Big banner, big problems

In the first three years of its first term, the NDA government accused hospitals as well as other private healthcare players in the drugs and devices market of profiteering. 


Janane Venkatraman

Janane is part of The Ken’s four-member desk team and is based in Chennai. Formerly with The New Indian Express and The Hindu, she decided to let go of her obsession with the 24-hour news cycle to sink her teeth into a good story. She has over 10 years of experience in the newsroom, along with a year-long stint at publishing house Orient Blackswan.

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