Insight: Cheap generics no panacea for India's poorest

MUMBAI (Reuters) - Cheap generic drugs were meant to change the life of Nandakhu Nissar, whose mouth is swollen by a cancerous tumor. But the cashless and hungry 55-year-old sleeps on a pavement staring up at the windows of Mumbai's biggest cancer hospital.

"What is a generic drug?" shrugs Nissar, who has travelled over 1,500 km (900 miles) from his home in the hope of treatment.

"I have borrowed money from friends and relatives and it is running out fast," says Nissar, his pale eyes filling with tears.

A ruling this week that for the first time allowed an Indian drugmaker to make and sell a blockbuster cancer drug at a fraction of the market price has been hailed as a breakthrough by campaigners for cheaper medicine in the emerging economy.

The generic version of the drug, German drugmaker Bayer's Nexavar, will be produced under what is known as a compulsory license, available to nations to issue in certain cases where life-saving treatments are unaffordable.

Yet no amount of compulsory licenses will help the millions of poor Indians suffering from diseases like cancer, because even the generic version of Nexavar will be priced beyond the reach of India's poor, experts and medical professionals say.

Increased state spending on free and accessible healthcare and policies to extend insurance cover to its poorest citizens would be far more effective weapons.

"The government has to start taking cancer seriously. They haven't done anything," said Dr M. Krishnan Nair, an award-winning Indian oncologist. "Even at generic prices, the drugs are too expensive for the poor. They don't get anything."

India allocated 268 billion rupees ($5.4 billion) for healthcare in 2011-12, around a sixth the size of the defense budget. That represents 2.13 percent of total government spending, or $4.50 for each person in the country.

With around 40 percent of the population living below the poverty line, healthcare is an upper-middle-class luxury in much of India where spending in private clinics is four times the amount of that in government hospitals. The poorest would-be patients literally beg for treatment on the outside of a chronically underfunded and overstretched health system.

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Insight: Cheap generics no panacea for India's poorest