Intellectual Property Helps NephroPlus Improve Treatment for Chronic Kidney Disease in India

August 7, 2017

(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

(Ed. Note: This post is part of Innovate4Health, a joint project of GMU’s Center for the Protection of Intellectual Property and the Information Technology and Innovation Foundation providing case studies on how IP-driven innovation is tackling some of the world’s toughest health issues.)

Chronic kidney disease, which causes people to lose their kidney function over time, affects an estimated 12 million people in India. With the increasing incidence of diabetes, the burden of such a chronic disease is only likely to increase. But one company—NephroPlus—uses a patent-pending process at the heart of its operations to provide safe, affordable, and effective treatment in a growing number of cities across the country. The company’s experience shows that service-focused intellectual property, not just patents for pharmaceuticals, can play a role in driving healthcare innovation in developing countries.

The problem in India is that more than 90 percent of the 230,000 Indians newly diagnosed with kidney disease each year die within months due to a lack of treatment. There are many contributing factors—a lack of trained staff (India has less than a thousand nephrologists) and services that are fragmented, inefficient, potentially harmful, and largely available only in the big cities. Once kidney failure occurs, individuals require a kidney transplant or weekly dialysis treatment to stay alive. Kidney transplants—which can fail—are extremely limited due to stringent regulations, low kidney donation rates, and poor health infrastructure. Which makes dialysis the most viable alternative.

Dialysis can keep one’s body in balance by removing waste, salt, and extra water to prevent them from building up in the body, maintaining a safe level of certain chemicals in the blood, and helping to control blood pressure. But poor-quality dialysis services have plagued India. Negligent clinical processes, poor infection protocols, and insufficiently trained staff lead to cases where the blood of the donor isn’t properly screened or the dialysis units are not cleaned properly. Indicative of this, patients are at a high risk of cross infection—around 30 percent of patients in India who get dialysis for two years have a 30 percent chance they will be infected by hepatitis B or C or HIV. So serious was the state of affairs in India that on November 26, 2014, India’s Supreme Court (in response to a public-interest legal case) sought a response from the federal and state governments on the status of dialysis and renal care infrastructure in the country.

In 2010, NephroPlus’s founders, one of whom experienced chronic kidney disease, recognized the situation India and set about identifying international best practices on clinical procedures to use at the heart of a new health services company. This led to the patent-pending “Zero Infection Point Kit,” a 56-step process that allows the company to provide safe, effective, and affordable services to a growing number of Indians, especially low-income patients.

The success of NephroPlus’s intellectual property and business model is evident—in a few short years, the company has become the largest private dialysis provider in the country. Nephroplus runs 78 centers across 53 cities in 15 states, some in large cities and others in underserved, smaller cities. NephroPlus’s centers provide a complete range of healthcare services, such as hemodialysis, peritoneal dialysis, and kidney transplant services, along with counseling and diet support services as part of a holistic focus on patient care. NephroPlus designs, builds, and operates low-cost centers to provide high quality and affordable dialysis services, either as standalone clinics or in partnerships with hospitals. NephroPlus does all of this at a better price than other providers—at $25 per treatment, NephroPlus’s services are 30-40 percent, sometimes 50 percent, lower than those of large hospitals in India.

Even with a focus on lean and efficient operations, NephroPlus knew that to make its services more affordable and accessible it needed to do more given the large number of poor patients in India. So the company began to register its centers with the government, thereby allowing patients to pay via public insurance plans. As of 2015, approximately 25 percent of NephroPlus patients used public insurance to cover their costs. This figure is expected to grow to 30 percent by 2020. This has helped the company treat more of the poorest people. As testament to this, a 2016 study found that 67 percent of NephroPlus’s patients were considered to be living at the base of the income pyramid in India.

Along these lines, NephroPlus acted as an agent for change within India’s hospital system—both public and private—which had failed to supply the growing need for high-quality treatment of chronic kidney disease. Firstly, NephroPlus entered into revenue-sharing agreements with private hospitals to split revenue, also allowing lead nephrologists to become a minority investor in the partnership. Secondly, NephroPlus bid for government contracts to build dialysis centers in public hospitals. Again, being flexible in how it leveraged its core competitiveness—the patented treatment process—while also being mindful of the interests of diverse stakeholders allowed the company to expand its services.

NephroPlus’s success has attracted significant financial backing—the company raised $10 million from the International Finance Corporation and $3 million from a private venture capital fund. Over the next five years, NephroPlus aims to reach over 40,000 patients and to help create 10,000 skilled jobs, including doctors, nurses, and dialysis technicians. The company is planning to establish one clinic in every district of the country by 2018. Half of its future centers will be located in smaller cities to make dialysis services more accessible to lower-income patients. NephroPlus is also looking to go international and expand to five countries in Africa and Asia by 2020.

NephroPlus’s success has coincided with much-needed government reforms, including changes funding. In November 2016, India’s Health Minister stated that the government aimed to open 4,000 dialysis centers across the country. While there hasn’t been a separate allocation of funding for kidney disease treatment, the government is now providing funding through India’s National Health Mission for state-driven public-private partnerships (PPPs), which 30 states have used for dialysis projects. The governments pay these centers on a per-treatment basis. In this, the state and district hospitals can offer space to private service providers who bid to secure a contract for the space. As of March 2017, India’s Health Ministry has approved 519 such PPP proposals, including those from NephroPlus.

Nephroplus’s success relies on its ability to leverage its intellectual property as part of a business model that is efficient, profitable, and adaptable. It has certainly benefited from the Indian Government’s growing attention to the issue and reforms to funding, health insurance, and operational policies. This underscores how access to healthcare is a complex subject that involves many different issues and stakeholders, which in this case, has changed in recent years to vastly improve access to a better and more affordable treatment for chronic kidney disease.

NephroPlus’s story highlights the need for a broader focus on the barriers to healthcare, rather than accusing intellectual property of being the main culprit, as many in the debate around improving access to healthcare in developing countries have done, such as in the report by the United Nations High Level Panel on Access to Medicines. This blinkered approach is not only wrong, but damaging, as it distracts from the need for broader discussions about the wide range of barriers to healthcare in a given country.