Birender Sangwan’s parents wanted him to be a doctor.
For two years, Sangwan even prepared for the medical entrance examinations in India before finally giving up. “I was always scared of hospitals,” he said in an interview at his modest two-room office at New Delhi’s Rohini court complex. “I still get dizzy and feel like vomiting when I go to hospitals.”
But in September 2014, he went to the Metro Hospital in Faridabad, a suburb of Delhi. A friend’s brother needed a coronary stent—wire mesh planted in an artery to open up blood flow—fitted into his heart. The hospital charged his friend more than Rs1 lakh for this, without mentioning the device’s maximum retail price. “I asked the doctor to provide us with the purchase bill for the stent,” Sangwan said. “He refused.”
That refusal is the reason why 37-year-old Sangwan is at the centre of the storm sweeping through India’s Rs6.7 lakh crore ($100 billion) healthcare industry today.
A public interest litigation (PIL) filed by the affable lawyer in 2015 coaxed the Indian government to crack the whip on the country’s Rs3,300 crore ($531 million) coronary stent industry, ending years of rampant profiteering.
In a country where 30 million people suffer from cardiovascular problems and over two million die of heart attacks and strokes each year, stents have become essential. Every year, over 200,000 heart surgeries take place in the country. But this demand has stoked a racket of extraordinary proportions: Government data published last month showed that hospitals in Asia’s third-largest economy could be selling stents at margins of up to 654%.
Not any more, though.
On Feb. 13, the National Pharmaceutical Pricing Authority (NPPA), the primary agency for fixing drug prices, notified a price cap (pdf) of Rs7,260 for bare metal stents (those without any coatings) and Rs29,600 for modern drug eluting stents. The latter have a polymer coating, which gradually releases a drug to ensure that the blockage doesn’t reoccur.
So far, the average retail price for a bare metal stent was Rs45,000, while drug eluting stents were priced at around Rs1.20 lakh.
In a five-page order, the drug pricing authority explained that the move was made after an analysis of pricing data and extensive consultations.
During deliberations, it was found that huge unethical markups are charged at each stage in the supply chain of coronary stents, resulting in irrational, restrictive, and exorbitant prices in a failed market system driven by information asymmetry between the patient and doctors, pushing patients to financial misery; and whereas under such extraordinary circumstances, there is an urgent necessity, in public interest, to fix the ceiling price of coronary stents to bring respite to patients.
Lawyer turned crusader
Born into a middle class family in Kohna, Sangwan grew up in the nondescript Haryana village till he left for the capital to study political science at Delhi University. After graduating in political science, Sangwan turned to study law from Maharshi Dayanand University in Rohtak, Haryana.
In 2007, he enrolled as a lawyer at the Rohini court, where cases from the west and north west districts of Delhi are heard. “For three years, it was a struggle, because I hardly knew anyone and it was tough to find cases. Most of the cases I attended to were criminal ones,” Sangwan said. Three years into the profession, he added civil cases and writ petitions to his repertoire. By 2013, he was handling PILs.
Then, in September 2014, Sangwan witnessed the Metro Hospital episode. “The total bill at the hospital was more than Rs3.2 lakh,” Sangwan said. “That is really expensive for a country like India.”
Soon, he filed a query under the Right to Information Act to find out the number of hospitals in Delhi that performed angioplasty. He found 54 such hospitals and the rates of stents varied across the facilities.
A month later, bothered by what he calls doctors’ brutality, Sangwan filed a complaint with India’s health ministry. In November 2014, Sangwan filed another RTI to see if stents came under the drugs category or metal category.
The crusade had begun.
The government responded in December, informing him that stents came under the Drug and Cosmetic Act, but wasn’t covered under the National List of Essential Medicines (NLEM). This list identifies medicines that must be made affordable for citizens. So, in February 2015, he filed a PIL at the Delhi high court (HC) to get stents included in NLEM. The court asked India’s chemical and fertiliser ministry—under oversees the department of pharmaceuticals—to take action.
There was no response for months. In October 2015, Sangwan filed a contempt notice at the HC citing the government’s laxity.
It was only in July 2016 that the Narendra Modi government notified the addition of stents in the NLEM. Sangwan wasn’t done, though. In December, he filed another PIL seeking a limit on the maximum retail price of stents. This was followed by a HC order asking the government to fix the rates. Finally, on Feb. 13, the government placed the cap.
“Our fight isn’t against the stent makers,” said Sangwan, “It is against the distributors and hospitals who have been extorting patients.”
Margin mania
“If you look at a distributor, it is a highly working capital intensive industry for two reason. One is the inventory, the other is the outstanding (payments),” explained Ganesh P Sabat, CEO of Sahajanand Medical Technologies, one of India’s dozen or so domestic stent manufacturers.
The situation, according to Sabat, looks something like this. If a distributor stocks between 120 and 200 stents per hospital, with each device priced at between Rs25,000 and Rs30,000, the working capital requirement is upwards of Rs30 lakh per hospital. It’s obviously a lot more for more expensive stents. On top of that, there’s a possibility of about 10% of the stocked stents become unusable after they cross their expiry date, and approximately 5% of stents have a chance of incurring some damage during transport or storage.
Alongside, there’s the issue of outstanding payments, particularly for government healthcare schemes, where the payout can take anything between six months and a year. All through, the distributor has to pay an interest rate of about 15%.
“Because the distributor makes this substantial investment in the working capital, they end up asking for 30-40% margins,” said Sabat, “And the hospital adds its own margin on top of the distributors.”
Sangwan, too, agrees that it isn’t the manufacturers who are inflating prices. “The manufacturers have been selling at the same price for years,” he said. “The distributors, hospitals, and doctors are hand in glove with each other and they are the ones making the money. The product should come directly from the manufacturers to the patients.”
India’s healthcare service providers cannot deny that such malpractices are rampant. To start with, only about 1% of the hospitals in the country are accredited, the rest are wont to flout norms and rules. Industry leaders, speaking on the condition of anonymity, argue that once accredited, the margins of bona fide healthcare service providers come under pressure because of the cost of following prescribed norms and putting in place the required systems. And with shrinking margins, hospitals come to increasingly rely on pharmacy sales, medical devices, and medical diagnostic testing. The cap on stent pricing, therefore, will hit their balance sheets further, unless it is made up for by increasing the overall cost of cardiac procedures that use such devices.
Industry heartburn
The drastic price revision has rattled India’s stent market, especially multinational medical device manufacturers with expensive offerings.
The Advanced Medical Technology Association (AdvaMed), a Washington DC-based trade association of over 300 medical technology firms, including stent makers Abbott and Boston Scientific, said it was “deeply disappointed” by the NPPA order. In a statement, AdvaMed explained:
While the intent is to cap prices in patient interest, this pricing has the potential to block innovations and limit access to world-class medical care and options to deserving patients. The singular focus on controlling ceiling price of stents, without attempting to address the larger picture and correct inefficiencies in the healthcare ecosystem will not achieve its stated benefit, in the long run.
The decision also disregards the evolution of coronary stents over the last four decades, and blocking innovation may set our healthcare sector back by at least a decade, when there were far lesser options for Indian patients. There is a clear, measurable difference between different types of stents and their benefits. The government should have taken this categorization into consideration before regulating prices.
In the days immediately following the NPPA order, reports suggestedthat Abbott’s bioresorbable stents (which fully dissolves over time), previously priced at Rs1.6 lakh, were withdrawn from a number of Mumbai hospitals. In Kolkata, too, high-end stents suddenly went out of circulation.
The company, however, denied that anything of that sort happened. “Abbott continues to market our full range of coronary stents available in India, per the NPPA order of Feb. 13, 2017,” a spokesperson said. “We have also advised trade partners and hospital partners to abide by the ceiling prices determined by the NPPA order.”
Some part of the setback for multinational stent manufacturers is of their own making, though.
Girdhar J Gyani, director general of the Association of Healthcare Providers, which represents over 400 hospitals nationwide, explained that companies were unable to make a solid case for the use of more expensive, advanced stents, as opposed to older, cheaper variants.
“Unfortunately, our cardiologist friends were not able to produce the validated report which says that the fifth or fourth generation stents will give better outcomes,” said Gyani. “I wanted a very validated report but what I’ve been able to get are reports produced as marketing tools by the stent companies.”
Although the association supports the government’s move to cap some stents, Gyani argued that the NPPA order will make it difficult for patients to get top-of-the-line stents even if they want, and can afford, them. “Our final line is, please keep this option open for the patients who are affluent and who want fourth and fifth generation stents,” he said.
There’s also the fear that the pricing-cap on stents will drive away the lucrative wave of medical tourists who have been coming to Indian hospitals in growing numbers. “If we don’t give them the option, they may not want to come to us,” Gyani added. Well-heeled Indians, too, could fly overseas for treatment if the situation persists.
Indian stent-makers aren’t buying the argument. Their stents, they insist, are just as good as those of their foreign-made counterparts. “We can innovate much faster than them and we have more advanced features,” said Sabat. “With marketing and financial muscle, they try to show that they’re the most advanced.”
In any case, it’s not that multinational stent-makers can ignore India, said the managing director of another Indian firm, speaking on the condition of anonymity. “Can any company neglect this population? No. We have 1.2 billion people,” he said. “Let’s see after a year how many patients really went out of India (for treatment).”
Sangwan, meanwhile, is raring for another fight, this time to bring down the prices of orthopaedic products, including those used in knee and hip replacement surgeries.
“I am also planning to do my PhD in law,” he said. “After all, I must fulfill my parents ambitions of me becoming a doctor.”
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The United Nations has shaped so much of global co-operation and regulation that we wouldn’t recognise our world today without the UN’s pervasive role in it. So many small details of our lives – such as postage and copyright laws – are subject to international co-operation nurtured by the UN.
In its 75th year, however, the UN is in a difficult moment as the world faces climate crisis, a global pandemic, great power competition, trade wars, economic depression and a wider breakdown in international co-operation.
Still, the UN has faced tough times before – over many decades during the Cold War, the Security Council was crippled by deep tensions between the US and the Soviet Union. The UN is not as sidelined or divided today as it was then. However, as the relationship between China and the US sours, the achievements of global co-operation are being eroded.
The way in which people speak about the UN often implies a level of coherence and bureaucratic independence that the UN rarely possesses. A failure of the UN is normally better understood as a failure of international co-operation.
We see this recently in the UN’s inability to deal with crises from the ethnic cleansing of the Rohingya Muslims in Myanmar, to civil conflict in Syria, and the failure of the Security Council to adopt a COVID-19 resolution calling for ceasefires in conflict zones and a co-operative international response to the pandemic.
The UN administration is not primarily to blame for these failures; rather, the problem is the great powers – in the case of COVID-19, China and the US – refusing to co-operate.
Where states fail to agree, the UN is powerless to act.
Marking the 75th anniversary of the official formation of the UN, when 50 founding nations signed the UN Charter on June 26, 1945, we look at some of its key triumphs and resounding failures.
Five successes
1. Peacekeeping
The United Nations was created with the goal of being a collective security organisation. The UN Charter establishes that the use of force is only lawful either in self-defence or if authorised by the UN Security Council. The Security Council’s five permanent members, being China, US, UK, Russia and France, can veto any such resolution.
The UN’s consistent role in seeking to manage conflict is one of its greatest successes.
A key component of this role is peacekeeping. The UN under its second secretary-general, the Swedish statesman Dag Hammarskjöld – who was posthumously awarded the Nobel Peace prize after he died in a suspicious plane crash – created the concept of peacekeeping. Hammarskjöld was responding to the 1956 Suez Crisis, in which the US opposed the invasion of Egypt by its allies Israel, France and the UK.
UN peacekeeping missions involve the use of impartial and armed UN forces, drawn from member states, to stabilise fragile situations. “The essence of peacekeeping is the use of soldiers as a catalyst for peace rather than as the instruments of war,” said then UN Secretary-General Javier Pérez de Cuéllar, when the forces won the 1988 Nobel Peace Prize following missions in conflict zones in the Middle East, Africa, Asia, Central America and Europe.
However, peacekeeping also counts among the UN’s major failures.
2. Law of the Sea
Negotiated between 1973 and 1982, the UN Convention on the Law of the Sea (UNCLOS) set up the current international law of the seas. It defines states’ rights and creates concepts such as exclusive economic zones, as well as procedures for the settling of disputes, new arrangements for governing deep sea bed mining, and importantly, new provisions for the protection of marine resources and ocean conservation.
Mostly, countries have abided by the convention. There are various disputes that China has over the East and South China Seas which present a conflict between power and law, in that although UNCLOS creates mechanisms for resolving disputes, a powerful state isn’t necessarily going to submit to those mechanisms.
Secondly, on the conservation front, although UNCLOS is a huge step forward, it has failed to adequately protect oceans that are outside any state’s control. Ocean ecosystems have been dramatically transformed through overfishing. This is an ecological catastrophe that UNCLOS has slowed, but failed to address comprehensively.
3. Decolonisation
The idea of racial equality and of a people’s right to self-determination was discussed in the wake of World War I and rejected. After World War II, however, those principles were endorsed within the UN system, and the Trusteeship Council, which monitored the process of decolonisation, was one of the initial bodies of the UN.
Although many national independence movements only won liberation through bloody conflicts, the UN has overseen a process of decolonisation that has transformed international politics. In 1945, around one third of the world’s population lived under colonial rule. Today, there are less than 2 million people living in colonies.
When it comes to the world’s First Nations, however, the UN generally has done little to address their concerns, aside from the non-binding UN Declaration on the Rights of Indigenous Peoples of 2007.
4. Human rights
The Human Rights Declaration of 1948 for the first time set out fundamental human rights to be universally protected, recognising that the “inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world”.
Since 1948, 10 human rights treaties have been adopted – including conventions on the rights of children and migrant workers, and against torture and discrimination based on gender and race – each monitored by its own committee of independent experts.
The language of human rights has created a new framework for thinking about the relationship between the individual, the state and the international system. Although some people would prefer that political movements focus on ‘liberation’ rather than ‘rights’, the idea of human rights has made the individual person a focus of national and international attention.
5. Free trade
Depending on your politics, you might view the World Trade Organisation as a huge success, or a huge failure.
The WTO creates a near-binding system of international trade law with a clear and efficient dispute resolution process.
The majority Australian consensus is that the WTO is a success because it has been good for Australian famers especially, through its winding back of subsidies and tariffs.
However, the WTO enabled an era of globalisation which is now politically controversial.
Recently, the US has sought to disrupt the system. In addition to the trade war with China, the Trump Administration has also refused to appoint tribunal members to the WTO’s Appellate Body, so it has crippled the dispute resolution process. Of course, the Trump Administration is not the first to take issue with China’s trade strategies, which include subsidises for ‘State Owned Enterprises’ and demands that foreign firms transfer intellectual property in exchange for market access.
The existence of the UN has created a forum where nations can discuss new problems, and climate change is one of them. The Intergovernmental Panel on Climate Change (IPCC) was set up in 1988 to assess climate science and provide policymakers with assessments and options. In 1992, the UN Framework Convention on Climate Change created a permanent forum for negotiations.
However, despite an international scientific body in the IPCC, and 165 signatory nations to the climate treaty, global greenhouse gas emissions have continued to increase.
Under the Paris Agreement, even if every country meets its greenhouse gas emission targets we are still on track for ‘dangerous warming’. Yet, no major country is even on track to meet its targets; while emissions will probably decline this year as a result of COVID-19, atmospheric concentrations of greenhouse gases will still increase.
This illustrates a core conundrum of the UN in that it opens the possibility of global cooperation, but is unable to constrain states from pursuing their narrowly conceived self-interests. Deep co-operation remains challenging.
Five failures of the UN
1. Peacekeeping
During the Bosnian War, Dutch peacekeeping forces stationed in the town of Srebrenica, declared a ‘safe area’ by the UN in 1993, failed in 1995 to stop the massacre of more than 8000 Muslim men and boys by Bosnian Serb forces. This is one of the most widely discussed examples of the failures of international peacekeeping operations.
On the massacre’s 10th anniversary, then UN Secretary General Kofi Annan wrote that the UN had “made serious errors of judgement, rooted in a philosophy of impartiality”, contributing to a mass murder that would “haunt our history forever”.
If you look at some of the other infamous failures of peacekeeping missions – in places such as Rwanda, Somalia and Angola – it is the limited powers given to peacekeeping operations that have resulted in those failures.
2. The invasion of Iraq
The invasion of Iraq by the US in 2003, which was unlawful and without Security Council authorisation, reflects the fact that the UN is has very limited capacity to constrain the actions of great powers.
The Security Council designers created the veto power so that any of the five permanent members could reject a Council resolution, so in that way it is programmed to fail when a great power really wants to do something that the international community generally condemns.
In the case of the Iraq invasion, the US didn’t veto a resolution, but rather sought authorisation that it did not get. The UN, if you go by the idea of collective security, should have responded by defending Iraq against this unlawful use of force.
The invasion proved a humanitarian disaster with the loss of more than 400,000 lives, and many believe that it led to the emergence of the terrorist Islamic State.
3. Refugee crises
The UN brokered the 1951 Refugee Convention to address the plight of people displaced in Europe due to World War II; years later, the 1967 Protocol removed time and geographical restrictions so that the Convention can now apply universally (although many countries in Asia have refused to sign it, owing in part to its Eurocentric origins).
Despite these treaties, and the work of the UN High Commission for Refugees, there is somewhere between 30 and 40 million refugees, many of them, such as many Palestinians, living for decades outside their homelands. This is in addition to more than 40 million people displaced within their own countries.
While for a long time refugee numbers were reducing, in recent years, particularly driven by the Syrian conflict, there have been increases in the number of people being displaced.
During the COVID-19 crisis, boatloads of Rohingya refugees were turned away by port after port. This tragedy has echoes of pre-World War II when ships of Jewish refugees fleeing Nazi Germany were refused entry by multiple countries.
And as a catastrophe of a different kind looms, there is no international framework in place for responding to people who will be displaced by rising seas and other effects of climate change.
4. Conflicts without end
Across the world, there is a shopping list of unresolved civil conflicts and disputed territories.
Palestine and Kashmir are two of the longest-running failures of the UN to resolve disputed lands. More recent, ongoing conflicts include the civil wars in Syria and Yemen.
The common denominator of unresolved conflicts is either division among the great powers, or a lack of international interest due to the geopolitical stakes not being sufficiently high. For instance, the inaction during the Rwandan civil war in the 1990s was not due to a division among great powers, but rather a lack of political will to engage.
In Syria, by contrast, Russia and the US have opposing interests and back opposing sides: Russia backs the government of the Syrian dictator Bashar al-Assad, whereas the US does not.
5. Acting like it’s 1945
The UN is increasingly out of step with the reality of geopolitics today.
The permanent members of the Security Council reflect the division of power internationally at the end of World War II. The continuing exclusion of Germany, Japan, and rising powers such as India and Indonesia, reflects the failure to reflect the changing balance of power.
Also, bodies such as the IMF and the World Bank, which are part of the UN system, continue to be dominated by the West. In response, China has created potential rival institutions such as the Asian Infrastructure Investment Bank.
Western domination of UN institutions undermines their credibility. However, a more fundamental problem is that institutions designed in 1945 are a poor fit with the systemic global challenges – of which climate change is foremost – that we face today.