MACROECONOMICS AND HEALTH T. .M Jacob Memorial Government College, Manimalakunnu, Koothattukulam National Conference on Recent Macroeconomic Developments in India: Issues, Challenges and Remedies – 6-7, December-2017 MACROECONOMICS AND HEALTH Merin Joy Ph.D Scholar in Economics, Government College Kottayam, joy.mmerin@gmail.com

Studies on macroeconomics and health generally try to emphasize, outline and examine the importance of health outcomes in determining the rate of economic growth of economies. We will have an overview of important national and international developments in this regard with special focus on access to essential drugs.

WHO commission of macroeconomics and health (WHO CMH 2001). Goal - strengthen economic development by investing in health. It outlines a strategy for achieving these goals by expanding investments in the health.

Most important recommendation of WHO CMH - Low and middle-income countries, in association with high-income countries should strive to increase the access of the world’s poor to essential health services Focus will be on specific interventions. The high income countries should increase financial assistance, to countries that need urgent help. The investment on health must be ‘scaled up’.

NCMH – India India constituted its National Commission on Macroeconomics and Health (NCMH) in March 2004. NMCH identified a package of essential health interventions and also list systemic constraints that need to be addressed for ensuring universal access to this package of services.

Some of Issues discussed by NCMH - India Shift in public investment to focus on prevention of disease The growth of the private sector is due to dysfunctional nature of the public health system. But it failed to provide health care at a reasonable cost. There is need to regulate these sector

To reduce government expenditures by at least 30%, rationalization and restructuring the Public Health Delivery System at the primary health care level should be taken up. Three drivers of the health system costs are Human Resources, Drugs/Medicines, and Technology.

Access to drugs and medicines drugs Sakthivel (2005) elaborates on the issue of access to essential medicines in India. Drugs and medicines form major portion of out-of-pocket spending on health among households in India Government interventions in this sector include drug price control and Public procurement of essential drugs.

The Central and State Governments spent approximately Rs 2000 crores per year for procuring drugs. Even this is grossly inadequate. For instance, in Orissa, the current level of spending per public institution is found to be extremely low: ranging from Rs 16,000 to Rs 50,000

Public procurement of essential drugs The Tamil Nadu Medical Service Corporation (TNMSC) is a pioneer in drug procurement and distribution system in India. The superiority of TNMSC model is evidenced by the lower prices (mainly due to competitive bidding and bargaining power). This is clear from Table 1.

Table 1: Drug Price Difference between retail market and TNMSC

Prices of all medicines are lower in TNMSC Prices of all medicines are lower in TNMSC. The % of price difference ranges from 114% (minimum) to a whopping 5615% This means that prices of selected drugs are low by a minimum of 114% in TNMSC. However, these developments and the success achieved by TNMSC did not induced policy ramifications at Central Government, which continues to have multiple agencies for procurement and distribution of drugs for its various health schemes

Summary and Conclusions The paper was an attempt to have a primary look into the area of macroeconomics and health with special focus on access to essential drugs. Reports of both WHO CMH and NCMH – India aims at scaling up of health expenditure

The TNMSC model has proven its merit in ensuring low priced supply of essential drugs but is unfortunately not replicated by many of the stakeholders in India’s health system. The author wish to conclude by opining that existing systems and interventions aiming at ensuring low prices of medicines/drugs may be evaluated using this benchmark.

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