Nepal’s new constitution recognizes health as a fundamental right. The state, as executor of the rights set out in the new constitution will determine how it will define and implement that right. As such, the development of the nation’s health care sector is still in its infancy. However the nation’s health policies has evolved and the government has acknowledged that it has the primary responsibility to control the spread of communicable diseases, to reduce infant mortality rates, and to control the occurrence of non-communicable diseases, and to manage unpredicted health disasters. Also to be factored into the policy is the provision of quality health services to senior citizens, those who are physically and mentally challenged, and to poor and marginalized communities.
Although the concept to invest in healthcare sector is new in Nepal, signs of progress are evident and a considerable amount of private sector activity can be seen in indicators of health outcomes including life expectancy, maternal care, and rates of communicable diseases. While Nepal compares poorly against the standard global benchmarks, the situation is improving. For example, the country has recorded a consistent success rate of 90% in Tuberculosis treatment since 2009 and this exceeds the 87% global success rate. Almost 95% kidney & liver transplants success rate. Signs of progress can also be seen in the private sector’s expanding activity in pharmaceuticals, ayurvedic holistic healing, diagnostic centers and hospitals. Nearly 3,000 small, medium and large-sized commercial firms operate in these markets, and foreign investments of US$ 12.34 million have been realized since 2009.
The GoN is supportive of foreign sector investment in health care sector and the most attractive investment opportunities include hospitals and pharmaceuticals manufacturers.
While the healthcare sector has witnessed the growth of private hospitals and diagnostic centers and domestic pharmaceutical manufacturing, there remains a great deal of unmet demand. Most hospital and diagnostic infrastructure has been concentrated in larger cities including Kathmandu, Chitwan, Biratnagar, Butwal, and Pokhara. In contrast, there has been little or no increased access in rural areas. Further, the hospital and pharmaceutical industry is highly importing dependent and this increases cost of healthcare for end-consumer. Nepal imported US$ 95.4 million worth of healthcare-related commodities such as pharmaceuticals, devices, and medical supplies in 2013.
In recent years, private hospitals are coming with good infrastructure, latest technology and patient centric compliances and quality of care. Foreign joint ventures are also entering the Nepali health service market. Ayurveda and homeopathy, traditional South Asian systems of medical care, are based on the use of herbs and minerals. The GoN has recognized and supported these traditional approaches, and has a special unit called “Ayurveda and Alternative Medicine (AAM)” unit at the DoHS. This unit is responsible to develop and oversee the country’s ayurvedic and homeopathic infrastructure in the country. Although, this segment of the pharmaceutical industry is highly fragmented and un-organized, there have been some recent attempts to organize commercial scale manufacturing these drugs.
According to APPON, Nepal has 45 registered pharmaceutical companies which produce modern as well as basic medicines. Most pharmaceutical companies import APIs and then formulate, package and retail the drugs locally. Since 2010, the domestic manufacturing industry has picked up momentum. It is now estimated that Nepal manufactured drugs have captured 48% of the domestic market.
There are 2,064 registered private diagnostic centers in Nepal. Private diagnostic centers are predominantly multi-specialty in nature and offer a range of services including X-ray, ultrasound, pathological testing, cardiac testing and endoscopy.
Nepal follows a free market approach to healthcare policy and regulation. The Ministry of Health is responsible for the development of policies and regulation of the sector. A new policy strategy, the “Nepal Health Sector Program (2010-015)” has specifically identified the importance of close collaboration between the public and private sector in the delivery of health care services, and all service providers are expected to deliver quality healthcare in way that facilitates increased private-sector participation. Nepal also adheres to a number of international best practices, including guidelines for earthquake proofing of hospital buildings, mandatory free treatment for 10% of bed capacity, and environmental impact assessment norms for tertiary hospitals. Other benefits, including tax holidays and access to subsidized land for hospitals and pharmaceutical companies operating in underserved regions would also encourage increased private sector participation and improve healthcare outcomes. As a result of this positive environment, significant foreign investments have been observed since 2013, especially in private tertiary hospitals.