Industry Insights

The following interview is based on insights shared in a report co-authored by Alstonia Impact and KOIS, titled ‘Tackling latent Tuberculosis in India to bend the curve’. To read this report, please click here.

1. As shared in your report, public finance has been playing a strong role in funding tuberculosis healthcare and also extending free TB drugs, through the Public–Private Interface Agencies (PPIAs).

Given this scenario, what are some of the challenges of the TB healthcare value chain that would benefit most from private capital coming in and complement the efforts of the government?

India’s fight against tuberculosis (TB) has witnessed significant progress, underscored by a ~4x increase in domestic funding since 2017 and pioneering explorations of public-private collaborations. While TB mortality rates have declined (-2% CAGR from 2017 to 2022), the reduction in active TB cases has been more gradual (<1% CAGR reduction during the same period). Present strategies prioritize the usage of the limited available resources for finding active TB cases and its treatment. In particular, attention and resources for latent TB are limited, with only 12% of eligible patients receiving latent TB treatment in 2021. By mobilizing private capital to bolster early healthcare interventions focused on prevention (including latent TB treatment), we would create an opportunity to bend the curve on the number of new infections, not only saving thousands of lives, but also achieving substantial cost savings for public finances in the medium term, as many treatments will not be needed anymore as the number of active TB cases significantly drops. The challenge is that the upfront investment on prevention will be large and public capital needs to be coupled with private capital.

2. What are some of the public-private partnerships that could come up, to address the problem of latent TB detection and cure?

What could be complementary roles for public finance and private capital?

Patients exposed to an active TB carrier have a 5-10% chance of developing active TB within 2 years. Those with weakened immune systems, like HIV-positive individuals or children under 5, are at higher risk. Treating latent TB before it progresses to active TB could prevent further infections entirely, making it crucial for curbing the disease. With advancements like shorter 3-month treatment regimens, e.g., the 3HR (3-month daily doses of Hisoniazid plus Rifampin) and 3HP (3-month weekly doses of Hisoniazid Plus rifapentine), and cost-effective diagnostic tests (Cytokine Tuberculosis, “Cy-TB”), there is a prime opportunity to target latent TB. As mentioned above, the public sector is only starting to address this, with the current process of “household contacts” management identifying only an average of 2.6 people for each active TB case and even fewer are treated as per guidelines. Private players and capital could step in, and the system can be designed to foster competition, thus forcing the stakeholders to constantly improve to optimize the delivery model and to drive costs down. Attracting the necessary upfront capital to be able to materialize later savings due to avoided treatment is a role blended finance can play.

We already have a clear success story in the Public–Private Interface Agency (PPIA) model which is currently used by the National TB program in India. Under this model, private facilities carry out detection, diagnosis and treatment of TB patients, in alignment to government guidelines, and are paid based on outputs and outcomes (e.g., detected or treated patients).

3. In the past, blended finance in healthcare has been leveraged to support innovative early-stage solution providers who are seeking concessional capital.

Do you see a pipeline of such solutions coming up, which are providing higher quality and more affordable TB healthcare and could also potentially benefit from concessional loans and subordinated equity support?

If yes, could you share some examples of such for-profit solution providers?

TB prevention in general, and attention to latent TB in particular, has seen limited attention in the last years, with limited innovation in both the private and public domain. The major innovations in this space have been the approval of the Cy-TB test for latent TB in 2022, developed and manufactured by the Serum Institute of India, and the introduction of the faster 3HP treatment, whose development and introduction has been supported by the Aurum Institute, CHAI and Unitaid. It is also worth mentioning that Everwell, an Indian company, developed a digital platform to improve treatment adherence (for TB and other diseases). Broadening the view to include screening, the development of artificial intelligence-based algorithms to assist in the diagnosis of TB from chest X-rays has been a major enabler, maximizing the capacity of the very limited number of radiologists in low-medium income countries.

Looking at the pipeline of new promising innovations, “Plasmonic Diagnostics” (USA) is developing a fast non-invasive detection system for infectious diseases (which would include TB as well) and “Quratis” (South Korea) is developing a novel TB vaccine; if confirmed, they could be a game changer in the fight against TB. Closer to home, a new recombinant BCG vaccine is being tested in India. Valetude Primus Healthcare Pvt. Ltd has introduced a device streamlining sputum collection, enhancing efficiency. The Centre for Health Research and Innovation is creating an ecosystem conducive to swift diagnosis and treatment for TB patients.

4. Your report talks about the high savings in healthcare expenditure that timely detection and cure of latent TB could enable.

Given this, what are some of the impact metrics that blended finance practitioners need to keep in mind while structuring an outcome-based financing structure?

Having the focus on the early stages of the care cascade, it would be beneficial to stick to operational indicators which can be directly influenced by implementers. In addition to this, assuming a significant drop in the number of absolute cases, relative figures which are normalized by the number of active TB cases should be preferred over absolute figures. In practice, indicators such as the number of contacts tested and treated for latent TB for each notified active TB case would be a good measure. In addition to this, the treatment success rate for all latent TB patients which start a treatment and complete it successfully with a negative test can be considered as well.

Looking outside the health space, about 50% of TB patients (about 1.3 million per year in India) and their households face total costs (direct medical expenditures, non-medical expenditures and indirect costs such as income losses) that are catastrophic (>20% of total household income), with immediate impact on living conditions, health, and education for the whole family; a significant reduction in TB cases could prevent that.

5. You have suggested setting up pilot projects for management of latent TB at scale.

What are some of the deeper nuances (specific to TB in India) that practitioners need to be aware of?

This will help them account for such aspects, in the blended finance structure, right from the design stage.

At this stage we see 4 major challenges.

• First, as it is already visible in the current implementation, tracking down and managing household and other contacts can be very challenging: those contacts have limited incentive to be found and to become part of the process, which can be time consuming, and can lead to a stigma from their communities.
• Second, as is the case for most preventative health initiatives, patients who are still healthy could have little incentive to go through a complete treatment, which will take their time and could actually make them feel less well in the short term.
• Third, since new tools (e.g., Cy-TB test) and a new operating model will be used, the healthcare personnel will need to be trained and, probably, re-trained as the operating model is adjusted.
• Finally, a steady supply of the treatment drugs and testing technologies is highly essential – during our research we came across instances where implementers mentioned shortages in supply of the 3HP treatment.

Nevertheless, the pilot projects will be needed to be able to solve the practical challenges which might emerge. The promising factor is that there are a number of non-profits and social enterprises who have been working in this domain and would be likely partners for a pilot.

6. Given KOIS’s experience with healthcare focused financial services, are there any blended finance programs in other geographies, addressing latent diseases, which could be adapted for TB cure in India?

Blended finance models have demonstrated significant success in addressing healthcare challenges in various regions, especially in tackling latent diseases. Programs such as the procurement guarantees for COVID-19 supplies in LMICs and emergency loan facilities for healthcare SMEs in Sub-Saharan Africa offer adaptable frameworks that could potentially be applied to enhance tuberculosis (TB) treatment efforts in India.

During the COVID-19 pandemic, low and middle-income countries (LMICs) faced significant shortages of personal protective equipment (PPE) and medical supplies. To address this, MedAccess and the Bill and Melinda Gates Foundation each provided a $50 million procurement guarantee to UNICEF. This financial support enabled UNICEF to repurpose funds from its Vaccine Independence Initiative Revolving Fund, allowing pre-financing commitments of $313 million for vital COVID-19 supplies in LMICs. These guarantees ensured a sustainable supply chain and mitigated the risk of increased infections, morbidity, and mortality due to inadequate medical resources.

Similarly, healthcare SMEs in Sub-Saharan Africa faced significant operational challenges due to decreased revenues. To support these SMEs, the Health Finance Coalition, alongside partners like Malaria No More and the Rockefeller Foundation, developed the Open Doors African Private Healthcare Initiative (ODAPHI). This initiative, operating through the Medical Credit Fund, offered $30 million in emergency loans to healthcare providers in countries such as Ghana, Kenya, Nigeria, Tanzania, and Uganda. ODAPHI's efforts, supported by $17 million in loan guarantees from the U.S. President’s Malaria Initiative and other foundations, ensured continuous delivery of essential health services, including malaria testing and treatment, benefitting millions, especially women and children at high risk for malaria.

7. In your opinion, what are some of the challenges in building a scalable and sustainable blended finance program for tuberculosis in India? How could some of these challenges be mitigated?

Building a scalable and sustainable blended finance program for tuberculosis (TB) in India presents distinct challenges, largely due to its perception as a public sector responsibility, which limits private sector engagement. The primary focus of government and public funds has traditionally been on downstream aspects of TB care, such as diagnosis and treatment, rather than on upstream prevention efforts. This focus reduces the incentives for private investment in early intervention and prevention strategies, which are crucial for controlling the spread of TB effectively.

To mitigate these challenges, a shift in strategy is necessary. By framing TB prevention and early intervention as opportunities for impact investment, private capital can be attracted to fund innovative solutions that complement government efforts. This approach can be supported by highlighting the cost-effectiveness of addressing latent TB and demonstrating potential savings in healthcare costs.

Moreover, aligning TB intervention strategies with broader Sustainable Development Goals (SDGs) such as reducing poverty, promoting gender equality, and ensuring sustainable communities can enhance the appeal to private investors. By showing how TB impacts various aspects of life and community well-being, private sector entities may be more inclined to invest, recognizing the broader societal and economic benefits of their engagement. This strategy not only addresses the immediate health challenge but also promotes a holistic approach to sustainable development.