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Medical Tourism – boon or bane?

Updated: Jan 29

Sakdipong Sirisuttinunt (Prem)


Introduction

A costly medical operation or an expensive prescription may limit one’s access to living a long and healthy life. It seems disconcerting for a heart bypass surgical procedure to cost US$123,000 in the United States but only $15,000 in Thailand and $12,100 in Malaysia.[1] This has resulted in many patients looking to undergo a medical procedure to travel abroad – what we know now as Medical Tourism.


The increase in the number of medical tourists has certainly brought growth to the industry. However, whether this expansion represents a positive or negative trend remains a matter of great debate. If the destination country has a large inflow of medical tourists, what is the opportunity cost of accepting these foreign patients? If the outbound countries are mainly MEDCs, why are people traveling to less developed nations for a necessity? This essay will explore these questions at hand, examining “destination countries” in Southeast Asia and “origin countries” such as the United States, and the threat that drug monopolies pose to this industry.



Comparison of global drug prices [21]


Government Intervention in Medical Tourism

Southeast Asia’s medical tourism industry has been growing rapidly in recent decades, affecting both the origin and destination country’s economy. Whilst increases in the quality of life for patients and rising rankings in well-being indexes may be beneficial for both countries, critics remain skeptical due to the potential implications for domestic medical industries. Some fear that the flood of foreigners into developing countries will divert money and expertise away from state health care systems. Others claim that outbound medical tourists may act as a distraction from their countries' need to improve the quality of medical services.[2]



Destination Countries

Thailand and Malaysia are the two medical tourism hotspots in Southeast Asia. Since both are developing countries, are critics right to suggest that their governments choose to divert expertise away from state health care systems?


In Thailand, upon the completion of a 6-year medical programme, medical graduates are required to undergo a 3-year internship programme at an assigned public hospital. If a graduate chooses not to or fails to complete his/her internship, he/she will have to pay a fine of 400,000 Baht (apx 9,900 GBP).[3] However, the current government intends to increase this penalty to 2.5 million Baht (apx 62,000 GBP).[4] Instead of diverting medical expertise away from the state health care system, it appears that the Thai government is trying to compel doctors to work in public hospitals.


Furthermore, in Malaysia, a similar law[5] is also in place where medical graduates must complete a 2-year compulsory service to their country. Both governments are putting in effort to sustain the supply of doctors working in public hospitals and support the state health care system. Therefore, the statement from the critics mentioned earlier may not always hold true. It is possible for governments to set rules and regulations which ensure that medical tourism does not negatively affect the state of public health services.

Country of Origin

Using the United States as a case study – 1.6 million Americans travelled abroad for medical-related purposes in 2012. Research has found that “prescription drugs can be as much as 45% less expensive in Canada and France, and physicians in Thailand make less than one-tenth the salary of their American counterparts”.[6]


Price is a key factor that drives many Americans to seek medical treatments abroad, but this is not the only factor. Time also plays a part. People looking to undergo a non-urgent surgery may be placed on waitlists of hospitals and queued up before getting an operation scheduled. A long waitlist may, as a result, affect an individual’s decision on whether to queue-up in his/her home country or to pay an extra sum of money for a fast-track operation abroad.


However, buying a fast-track ticket to have a procedure done abroad may not always be a wise decision to make. A research article conducted on medical tourism in 2016 stated that complications from a rise in inbound medical operations are causing direct costs to taxpayers and affecting the healthcare access for local citizens.[7] Given that hospitals and clinics have a capacity limit, complications that require immediate attention may be given priority, resulting in a pushback on the waitlist for other locally scheduled operations.



Drug Monopoly

Whilst some travel abroad to undergo a complex medical procedure, others do so just for a simple drug prescription. Using Thailand as an example, the country has recently experienced a rise in a niche market: human immunodeficiency viruses HIV prevention.


PrEP and PEP are drugs that, if used correctly, can prevent one from contracting an HIV infection. A month's supply of these medications can cost anywhere between $2,000 in the United States to only $20 in Thailand.[8] PrEP/PEP is not one specific pill but a family of drugs with similar abilities. Truvada, for example, is one of the few approved PrEP/PEP drugs manufactured by Gilead biotechnology to be allowed for consumption in the United States. There are five Tenofovir disoproxil fumarate (TDF) drugs currently on the market – Viread, Atripla, Complera, Stribild, and Truvada – all made by Gilead Sciences.[18]




Activists protest Gilead’s PrEP monopoly [19]


Being called “an example of monopoly abuse,” Gilead has been accused of intentionally delaying the development of a new drug to manipulate its eligibility for a drug patent extension.9 Since the United States enables drug manufacturers to hold exclusive rights in producing a filed drug for 20 years, assuming the patent is extended, Gilead will have the ability to gain monopoly profit from its product, Truvada, for a longer period of time before going off patent and facing generic competition.[10] With it having full control over the market for HIV-prevention drugs, Gilead is a price maker where the company itself is the whole industry. The lack of competition faced by Gilead has enabled the company to charge their customers, who rely on their drugs, the highest possible prices.


According to Gilead, 112 countries, including Thailand, in the “TDF Territory” are able to distribute generic drugs manufactured by independent companies given that they pay a 3-5% royalty on net sales to Gilead.11 This results in brands such as Teno-EM and Tenof EM which cost $15.85 and $12.14 respectively (as of 2020) for a month’s supply to be widely available in TDF Territory nations such as Thailand.[12] The 112 countries on the TDF Territory list are mostly LEDCs and developing countries in Africa and Southeast Asia; thus, absentees such as South Korea, China, UK, US, and other MEDCs do not have access to these cheap substitutes.[13]


Given that Thailand is on the list where consumers can purchase relatively cheaper HIV-prevention drugs, medical tourists may be encouraged to travel to Thailand for their supply of such medications. With the Thai Red Cross being both the forefront provider of HIV-related medications and the operator of the King Chulalongkorn Memorial Hospital, the income accumulated from medical tourists may be used to fund the organization’s public hospital in ways which will benefit the state healthcare system.


South Korea is in an interesting position where the country is not on the TDF Territory list, but the national insurance covers PrEP/PEP for people with HIV-positive partners.[14] This means that even though the cost is high, insurance can cover a percentage of it if and only if the consumer has a high risk of contracting the virus. Some may argue that insurance should fully cover the cost of PrEP/PEP regardless of a consumer’s partner HIV status; however, this strategy may encourage citizens to be more risk averse and to better utilize protective measures such as condoms or dental dams.


The debate on whether PrEP/PEP should be fully covered by state and private insurance continues as new reports regarding such matter are constantly being published. In 2013, a research paper concluded that “risk behavior was not a consequence of PrEP use”.[15] Five years later, a contradicting paper was published stating that “PrEP…was accompanied by an equally rapid decrease in consistent condom use, which could undermine PrEP’s effectiveness.”[16]


The lack of supporting research may limit one in drawing a decisive conclusion on whether the introduction of PrEP encourages citizens to be more risk adverse. In the United Kingdom, where PrEP/PEP are not yet fully covered by the state, the NHS has reported that even if it has legal power to commission PrEP, there was “no guarantee that the annual prioritization round would result in a decision to invest millions of pounds in PrEP over new treatments and interventions in other service areas which are also competing for funding.”[17] It is the matter of a country’s opportunity cost to whether cover PrEP/PEP prescriptions for its citizen.



Map indicating countries where PrEP has been approved [20]


Conclusion

The rise of the market for medical tourism demands both outbound and destination countries to take responsive action. Countries should consider implementing relevant measures to ensure maximum satisfaction for both the economy and the people. Destination countries should respond in a way that lowers the opportunity cost of accepting foreign visitors, and origin countries should ensure that health facilities can accommodate all patients and their procedures.


Despite monopolies and cartels being labeled as illegal entities in an economy, Gilead and other drug giants are still able to allegedly abuse their monopoly power on drugs which may prevent one from contracting a fatal disease. Consequently, all governments must draft a set of policies through measures, such as insurance control, to ensure that price is not a factor prohibiting one’s access to living.



References

1. Stewart, Conor. "Cost of a Heart Bypass in Selected Countries as of 2019." Statista. 25 Feb. 2020. Web. 20 Dec. 2020. <https://www.statista.com/statistics/189966/cost-of-a-heart-bypass-in-various-countries/>.

2. "Operating Profit." The Economist. The Economist Newspaper, 14 Aug. 2008. Web. 29 Nov. 2020.

<https://www.economist.com/briefing/2008/08/14/operating-profit>.

3. Srisukho, Chanwalee. "ค่าปรับน.ศ.แพทย์ผู้ผิดสัญญา เท่าไหร่จึงจะเหมาะสม [Fines for Medical Students, How Much Is Enough]." Matichon Online. Matichon, 6 Dec. 2018. Web. 20 Dec. 2020. <https://www.matichon.co.th/article/news_1257650>.

4. Kanacharoen, Ittaporn. "Penalties of Medical Internship เตือนหมอจบใหม่เบี้ยวใช้ทุน." Dailynews. 24 Apr.

2019. Web. 29 Nov. 2020. <https://www.dailynews.co.th/regional/705687>.

5. "Housemanship and Registration." Jeffrey Cheah School of Medicine & Health Sciences. Monash

University, 25 Feb. 2020. Web. 01 Dec. 2020.

<https://www.monash.edu.my/jcsmhs/courses/undergraduate/bachelor-medical-science-

doctor-medicine/housemanship-and-registration>.

6. Boyd, Jennifer B. "Emerging Trends in the Outsourcing of Medical and Surgical Care." Archives of

Surgery. JAMA Network, 01 Jan. 2011. Web. 29 Nov. 2020. <https://jamanetwork.com/journals/jamasurgery/article-abstract/406615>.

7. Kim, David H, Caroline E Sheppard, Christopher J De Gara, Shahzeer Karmali, and Daniel W

Birch. "Financial Costs and Patients' Perceptions of Medical Tourism in Bariatric Surgery." Canadian Journal of Surgery. Journal Canadien De Chirurgie. 8872147 Canada Inc., Feb. 2016. Web. 01 Dec. 2020. <https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4734921/>.

8. Rashid, Raphael. "Thai Medical Tourism Expands into New Area: HIV Prevention." Nikkei Asia.

Nikkei Asia, 09 Mar. 2020. Web. 20 Nov. 2020. <https://asia.nikkei.com/Spotlight/Asia-Insight/Thai-medical-tourism-expands-into-new-area-HIV-prevention>.

9. Rowland, Christopher. "Gilead Delayed Safer HIV Drug to Extend Monopoly Profits, Advocates

Allege." The Washington Post. WP Company, 05 Dec. 2019. Web. 22 Nov.2020. <https://www.washingtonpost.com/business/economy/gilead-delayed-safer-hiv-drug-to-extend-monopoly-profits-advocatesallege/2019/12/05/71d4d6ae-1538-11ea-8406-df3c54b3253e_story.html>.

10. Myhre, James, and Dennis Sifris. "Why Are There So Few Generic HIV Drugs?" Verywell

Health. Ed. Latesha Elopre. 24 Sept. 2020. Web. 22 Nov. 2020. <https://www.verywellhealth.com/why-are-there-so-few-generic-hiv-drugs-4137290>.

11. Gilead Sciences, Inc. "TDF License Agreement." Gilead.com. Gilead Sciences, July 2011. Web.

23 Nov. 2020. <https://www.gilead.com/~/media/Files/pdfs/other/ExpandedTermsLicenseAgreement.pdf>.

12. Thai Red Cross AIDS Research Centre, comp. Drug List of Anonymous Clinic TRCARC.

Bangkok: Thai Red Cross, 2020. Print.

13. see note 11 above

14. Kim, Yun-mi. "HIV Prevention Pill to Get Insurance Benefit in Korea." Korea Biomedical

Review. 30 May 2019. Web. 23 Nov. 2020. <http://www.koreabiomed.com/news/articleView.html?idxno=5849>.

15. Marcus, Julia L., David V. Glidden, Kenneth H. Mayer, Albert Y. Liu, Susan P. Buchbinder, K. Rivet Amico, Vanessa McMahan, Esper Georges Kallas, Orlando Montoya-Herrera, Jose Pilotto, and Robert M. Grant. "No Evidence of Sexual Risk Compensation in the IPrEx Trial of Daily Oral HIV Preexposure Prophylaxis." PLOS ONE. Public Library of Science, 18 Dec. 2013. Web. 20 Dec. 2020. <https://journals.plos.org/plosone/article?id=10.1371%2Fjournal.pone.0081997>.

16. Wise, Jacqui. "Pre-exposure Prophylaxis May Increase Risky Behaviour When Introduced, Study Finds." TheBMJ. 6 June 2018. Web. 21 Dec. 2020. <https://www.bmj.com/content/361/bmj.k2514.full>.

17. Khomami, Nadia. "NHS Refusal to Fund HIV Prevention Treatment Is Shameful, Say Charities." The Guardian. Guardian News and Media, 31 May 2016. Web. 20 Dec. 2020. <https://www.theguardian.com/society/2016/may/31/nhs-refusal-fund-hiv-aids-prevention-treatment-shameful-say-charities>.

18. “TDF HIV DRUGS.” ClassAction.com. May 2018. < https://www.classaction.com/tdf-hiv-drugs/>

19. “Generic Licensing: the Only Path Through the Maze of Gilead and U.S. Patents that Achieves Access to Affordable PrEP.” 20 Nov. 2019. < https://healthgap.org/generic-licensing-the-only-path-through-the-maze-of-gilead-and-u-s-patents-that-achieves-access-to-affordable-prep/>

20. Hodges-Mameletzis, Ioannis. Global State of the Science and Implementation Summary for Oral PrEP. Geneva: Dorthy Gibbs, 2017. PPT. https://slideplayer.com/slide/12054728/

21. TNN. "Indian Drug Prices among the Cheapest in the World: India News - Times of India." The Times of India. TOI, 23 Nov. 2019. Web. 01 Jan. 2021. <https://timesofindia.indiatimes.com/india/indian-drug-prices-among-the-cheapest-in-the-world/articleshow/72196203.cms>.






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