India - Food and Drug Quality Control Project (formerly listed as Public Health Capacity Building Project)

Report No. PIC2719 Project Name India-Food and Drug Quality Control (@) Project Region South Asia Sector Health Project ID INPA10560 Borrower India, acting by its President Implementing Agency Ministry of Health & Family Welfare Mrs. Shailaja Chandra, Additional Secretary Department of Health Tel. 301 7481, New Delhi Fax. 301 4252, New Delhi Date this PID updated December 9, 1996 Projected Appraisal Date May/June 1997 Projected Board Date December 1997 1. Country and Sector Background. India has made important progress in the last several decades in implementing its national health policies, in raising life expectancy by 17 years over the last four decades to a current expectation of life at birth of 61 years, and by reducing infant mortality by more than two-thirds during the same period to 74 deaths per 1,000 live births. However, the country continues to suffer a heavy burden of both communicable and non-communicable diseases. The sector faces several key issues including the respective roles of the public and private sectors, budgetary and resource allocation issues, management of health services, quality of care, and workforce issues. Such issues are being addressed by the Union and state governments, and the country has embarked on a series of interventions to adjust its health strategies and to improve the performance of its health programs. 2. In addition to measures already underway, there is an important area of public health that is not yet being addressed. This generally concerns key public health functions that are intrinsic functions of the public sector, institutional issues, and shortage of technical skills affecting both the public and private health sectors. This gap constitutes a missing link in capacity building and involves essential public health functions in food and drug administration and quality control, logistical support for pharmaceutical supplies, disease surveillance, research and development, and technical skills in emerging areas of public health. 3. The capacity for monitoring the quality of drugs, vaccines and biologicals is limited. Similar constraints are faced in the prevention of food adulteration. The infrastructure of medical storage facilities is broken-down. Storage and logistical capacities are limited and cannot support a proper functioning of the medical supply system. Disease surveillance is weak. Training and research require support in  reorientation toward improved operational strategies and technologies where the expected social returns are highest and toward program-driven training. 4. The costs of not dealing with these issues are significant and would extend beyond the sphere of public health. Inferior and unregulated drug quality would impact health care in both public and private sectors and impede exports. The ramifications of inadequate disease monitoring would arise in various sectors and could lead to substantial economic losses during disease outbreaks. Inadequate medical supply systems decrease the efficiency and effectiveness of all health programs. Research leads to national savings by guiding operational strategies and technologies into more efficient choices. 5. Most importantly, India is undergoing a process of policy and institutional reorientation that requires enhancing core public health functions, consumer protection and related institutional capacities. This would contribute to facilitating the sectoral reform agenda. Indeed, with increasing market-oriented policies, public health service responsibilities for quality monitoring of products and practices, and for consumer protection, are increasing. Strengthening these institutional responsibilities would improve the effectiveness, efficiency, and quality of health services, and would contribute to providing a favorable enabling environment for proper sectoral performance and development. 6. Project Objectives. The ultimate purpose of the project would be to promote consumer protection by strengthening essential public health functions with a focus on quality control capacities for food and drugs. 7. Project Description. The project components would consist of incremental investments in existing programs to strengthen: (a ) quality control of drugs and biologicals, including augmenting drug and pharmaceutical testing facilities, providing additional inspection and technical staff and strengthening the communication network; (b) food quality control and safety, including augmenting food quality testing facilities, establishing a national food control information system, promoting consumer awareness, developing advisory services, enhancing field operations, and training and developing personnel to analyze, inspect and manage food; and (c) support institutional capacities in pharmaceutical supplies management, strengthening research, disease surveillance, and policy development for non-communicable diseases. 8. The project would provide, over five years, training and workshops, consultant services, contractual services, laboratory and medical equipment and supplies, research and surveillance operations, publications, civil works, vehicles, incremental salaries and operating costs on a declining basis. 9. Project Cost and Financing. The total cost of the project, which would be centrally financed, is estimated at about US$210 million equivalent. IDA would finance about US$170 million equivalent. The World Health Organization (WHO) would provide US$2 million in technical assistance as parallel grant financing. The Government of India (GOI) would finance the remaining balance. -2-  10. Project Implementation. In India, responsibility for health services under the constitution stands at three levels: the state, the center, and the concurrent list with joint responsibility for both. Health services are primarily a state responsibility. The center is responsible for developing and monitoring national policies, standards and regulations; it is responsible for health services in Union Territories (UTs) without a legislature; and it also funds national programs which are characterized by their public good aspect. Both center and state have joint responsibility for selected programs. Project interventions would be either the full responsibility of GOI, such as the regional medical supplies infrastructure network, or they would be on the concurrent list, where GOI attends to legislation, coordination, advice and monitoring; enforcement is the responsibility of state governments such as food and drug administration. Hence, the project would develop capacities at two main levels: (a) the federal level and its regional branches in the states; and (b) state-specific capacities such as in food and drug monitoring and disease surveillance. 11. The project components would build upon existing programs or institutions that are centrally funded. Drug quality control and food adulteration prevention are existing programs. The medical stores organization is a sub-system for supplies management supporting the sector at seven regional sites. 12. The project would be implemented within the existing administrative structures and mandates. GOI would coordinate the project, carry out major procurement and logistics, and develop policy and technical guidelines. Most of the project resources would flow directly to the regional branches in the states. GOI would pass to the states and UTs the goods procured and would bear all project costs. By appraisal, the Borrower would elucidate the details of the flow of resources and implementation responsibilities as well as the proposed indicators for project monitoring and evaluation. 13. Sustainability. The project design itself, which adopts a strategic framework for capacity building, would contribute to the technical and institutional sustainability of the project. Financial sustainability would not be an important issue because of the nature of the investments, which do not involve health care service delivery but rather the strengthening of skills, processes and institutions. However, operation and maintenance costs of new or enhanced laboratories are being assessed in addition to incremental salaries and, by appraisal, we would review in detail the recurrent financial implications of the project. Preliminary estimates show that the proposed investments would constitute an increment to the MOHFW recurrent budget of about Rs. 40 crores annually or 2.5 percent. This would be an extremely small share of the total public expenditure on health in India. 14. Lessons Learned. The experience of the Bank Group and other agencies in institutional development is extensive. The main conclusions to date include: (a) the importance of orchestrating institutional development within an overall strategy rather than disconnected individual efforts; (b) the need to shift the burden of quality control of food and drugs to the source; (c) the need to enhance - 3-  the borrower's role in the identification and design of interventions while incorporating wide participation; (d) the importance and efficiency of networking and partnerships in research capacity building; (e) the value added from improved donor coordination; (f) the importance of a strong project management team for generating coherence and proper monitoring of project implementation; and (g) the value of applied research in developing policies and cost-effective strategies in disease prevention and control. The project would also build on a nucleus of successful experience with WHO, the United States Public Health Service, USAID, and the Japanese OECF in technical collaboration and quality control development. 15. In the social sectors in India, IDA-assisted projects have generally been implemented satisfactorily. However, experience suggests that greater attention is warranted to attenuate late project start-up, slow procurement and disbursement, untimely flow of resources, poor maintenance of buildings and equipment, and incomplete attention to software and qualitative aspects. These generic issues would be addressed in the proposed project through adequate preparation of procurement and implementation plans, and through technical assistance for project preparation through the Japanese Grant and from WHO. 16. Environmental Aspects. The proposed project would not raise any environmental or natural resource management issues. Therefore, the environmental category C is being assigned to the project. 17. Project Benefits. Both the Borrower and the project team would attempt to quantify the benefits of the project during preparation. However, it is obvious that project benefits would accrue to the Indian society at large, since the institutions strengthened under the proposed interventions constitute the principal consumer protection agencies, particularly for the quality and safety of drugs, biologicals, vaccines and food products. These proposed enhancements would contribute to an improved quality of life. 18. Improving public health functions and advancing an institutional development strategy would contribute to the generation of sustainable development benefits for the health system. Meaningful research would facilitate informed and efficient policy choices to respond to emerging health needs. 19. Program Objective Categories. Poverty Aspects. Interventions dealing with food and drug quality would benefit the society at large, but would also benefit the poor, who are often not empowered to recognize and to deal with such issues. The project would strengthen support services of existing health programs serving the poor. The study of cost-effective options to deal with diseases and population- based risk factors that disproportionately affect the poor would assist in making better decisions, that are criteria based, for important and sometimes expensive services. Gender Dimensions of Development. The strengthening of logistical systems for drug supplies and contraceptives would benefit existing maternal and child health programs. The research agenda would address priority health problems of women. Private Sector Aspects. The project would promote an environment conducive to cost- effectiveness and enhanced product quality in the pharmaceutical and -4 -  food industries, and would support Government policies for promoting competition and fair trade practices. Contact Point: Public Information Center The World Bank 1818 H Street N.W. Washington D.C. 20433 Telephone No.: (202)458-5454 Fax No.: (202)522-1500 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. Processed by The Public Information Center week ending January 10, 1997. - 5 -