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Investment in healthcare

Our medical healthcare is one of the sectors which is always at the centre of socio-political discussion. It cannot be otherwise. It relates to the most basic concerns of all of us: our health. The government can make or break depending on the success or otherwise of the provision of healthcare, especially where it is largely provided by the state, as in the case of Malta.

The sector is also important because of the cost of its public provision. Total cost budgeted for this year approximates €450 million, including relatively low capital expenditure, which will have to rise in the not too distant future as new hospital facilities are provided.

A key element within the healthcare votes relates to the procurement and supply of medicines and surgical materials. The approved estimate for 2014 is, as usual, the largest single item in the overall fiscal cost of healthcare. Standing at €78 million it is €10 million more than the provision made for last year.

It is no wonder that such procurement is at the centre of the discussion triggered by the John Dalli report, also covered in the earlier Johns Hopkins study. Procurement needs to be made in such a manner that is timely and effective. In financial terms it has to be at the least possible cost and best value for money, allowing for the quality of the items sourced and those included as free medicines in the government formulary.

It is not certain that such sourcing is always made in the most efficient manner possible and at the least cost available taking all relevant factors into consideration. One wonders, for instance, what decisions were taken to effect additions to or changes in the formulary on the eve of the 2013 general election.

The Minister of Health often refers to what he inherited from the Nationalist government. This is one area where he has to check diligently, to ensure that abusive decisions are not carried forward by him, in which case they become his own decisions subjecting him to the consequences.

An important component of the healthcare infrastructure is the Medicines Authority. There are some queer factors relating to the authority, including the high rent it pays to operate from private premises, when it could easily be accommodated in government premises at substantial savings to the taxpayer.

It is also noteworthy that medi­cines authorities elsewhere practi­cally all operate at a profit realised from the work they generate, whereas the Maltese Medicines Authority operates at a loss. After the election a much-needed change was made at the top of the authority, with the appoin­tment of a new chairman whose name and experience are a guarantee of seriousness and integrity.

Pharmaceutical sector in Ireland is booming

Carrying forward established practices by the health authorities is not necessarily always a good idea. The authority acts too much as an inspector and hardly at all as a source of raising revenue.

Such revenue can be raised by attracting registration of medicine which is often hindered by heavy local bureaucracy. In this case the government and its human resources deployed on the job, provided they can change their attitude and culture and not act as simple inspectors of the wardens type, can benefit by following what Cyprus and Portugal are doing very successfully.

There is no reason why we too cannot attract registrations, which would enable principals to tap the rest of European Union market, provided we offer competitive terms plus essential paring down of bureaucracy and time wasting.

This is why the authority needs a root and branch overhaul. In the wider area of healthcare Malta has already made a success in attracting companies to establish production of pharmaceuticals here on the basis of the patents factor. More, however, can be done. In this particular case the example to study carefully is Ireland. Despite its recent economic and financial troubles the pharmaceutical sector in Ireland is booming.

Ireland is a leader in research and production of pharma­ceuticals, with nearly half of exports being made up of pharmaceuticals. Clearly, there is a huge market where Malta can compete more intensively. That a local producer will be cutting down on jobs this year is a signal to examine our competitivenerss. Given a good level of productivity, however, there is no reason why we cannot increase our competitive edge and attract more foreign direct investment in the sector.

Such investment is constrained by the life of the patent factor, which is why emphasis on medicines registration is required to promote a more balanced pharmaceuticals sector.

I am sure that Malta Enterprise and the Medicines Authority cooperate to devise the best way to promote the healthcare sector. It is already of great importance to the Maltese economy.

It can grow.

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