Pandemic - Happiness Conundrum

         

           What does happiness mean to us when   the  ferocity  of covid wave  hit the lives  of the people ?  Not a single day passes without hearing the loss of a person we know. What does happiness matter to a migrant worker who lost his job and income? an average middle-class family who lost their bread winner ? a poorer household without  three square meals a day?? Happiness is squandered when  Covid  withered huge psychological and emotional turmoil in the minds of people in all walks of life. SARS-CoV-2 has its origin in China and rapidly spread to countries across Europe where  there is high human development and better institutions to combat the menace. However, further spread to developing countries was beyond the control of  its institutions. Developing world is known for  less human development and it plunged into crisis  like never before, economically and psychologically.

This  human tragedy unfolds  the fact  that, as the death toll rise, only   human life is important, nothing else!  Although the economic policy makers are focused on wellbeing of the people, the  current state of the country negatively impacts  people’s happiness. Economists always correlate individual happiness with income Cantril (1965) .  Richard Easterlin (1974) explained the  paradoxical situation of Income and happiness. Philosophers like Aristotle  says  happiness is a virtue, and it is the noblest thing in the world. Thus, economists and philosopher’s enquire happiness in the lives  of the people.   

How economics inspires happiness? What makes people happy in life  is a crucial question in   happiness  research. It   relates  subject matter of  Economics with  life, or one  may call it ‘Economics of  life’ deviating from the neoclassical or mainstream economics. The works by Amartya Sen, Martha Nussbaum, Richard  Easterlin, Tibor Scitovsky etc are leading to  an enquiry into the nature of wellbeing of people than an enquiry of nature and scope of creation of wealth.  Prof. Amartya Sen tried to look at the wellbeing and happiness of the people from a development perspective.

The debatable questions in happiness research  start from the premises of  ‘are you happy’, what are the determinants of happiness. The determinants of happiness include  (1) Personality and demographic factors such as age, gender, attainment of education, political and religious factors, size of household, marital status and  health of the individuals. (2) Micro- and macroeconomic factors  such  as  income,  unemployment  and  inflation. (3)  Institutions. Institutions are responsible for the wellbeing and happiness of the people.

 

Effect of  Institutions on  Happiness

 

Empirical studies based on World Value Surveys(WVS) shows the relation  between  overall happiness and  institutions, Veenhoven (1993) and  Diener et al., (1995). It is bit  difficult to isolate the effect of  institutions on reported individual well-being and happiness because the countries differ  significantly in a great variety of aspects. In poor countries, the probability of recording the highest category of happiness increases with GDP per capita, and  not with the institutions. Easterlin (1995) observes  that in developed countries average happiness does not increase  with  the spike  in per capita GDP over time. On contrary, the developing world has not attained significant change in the institutional quality over the last decades, but they tried to advance  economically  to some extent.  Poorer countries like Malawi still fighting with malaria and smallpox, then it is not surprising to watch that the average happiness in these countries have not changed much over time. As a general rule, people living in  developed countries  with a  high  level of  human development with better institutions  tend to be happier. 

 

But, in the scenario of a pandemic, the happiness definition changes. How much income a typical individual would need  to achieve a level of happiness to compensate the loss in wellbeing resulted due to pandemic?  Happiness is related to good institutions and wellbeing of the people and good institutions can make people happy.  It is not about so much of wealth creation, but  public happiness is important.

Can Government Policy bring Happiness ?

Happiness is  considered  as a determinant of economic outcomes: it enhances  productivity, labour market performance and national output Bryson et al. (2016) and Piekalkiewicz (2017). Advocates of happiness economics assert that maximising happiness is  the art of  policymaking.  In order to ensure well-being and happiness, institutions  play a crucial role and there is a link between institutions and individual behaviour. Common man is happy when they meet basic need, away from infections and diseases and assured  vaccine - a universal public good. Like vaccine, happiness  is also a public good. We can’t be happy without  spreading  happiness in the lives of people.

A part of this article is   carried in the Christ University, Dehi NCR college magazine 2021

 

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Role of R&D capabilities in fostering India’s Pharma Industry

 

The second wave of  Covid  19 has spread quickly creating a public health catastrophe in India. This   put nation and individuals at great risk for want proper medical care and health  facilities. Therefore, the  challenge we face at present is different in its  nature and scope than we faced last year. There is on ongoing debate about vaccine nationalism and   government’s  failure to bolster its crumbling health care system. However, there are less discussions over state sponsored research and innovation in drug development in India.

India has a fast-growing presence in global pharmaceuticals. Hyderabad and Bengaluru are known for pharmaceuticals with high R& D capabilities and manufacturing. But during the second wave, many condemned  the state  for not  intervening successfully to provide lifesaving drugs to people though we claim India is the pharmacy of the world. And the state  failed miserably to adopt the  role of a risk taker at the time of a crisis.

Often, the role played by the centre and the various state governments are questioned in the current public health crisis. The subtle reaction of the centre suggests that the private players can accumulate their profit through vaccine production. The existing debates over accessibility and affordability of vaccines do not bring a relief to the suffering Indians. How can poor people be expected to vaccinate themselves, as they just do not have bare minimum a day?

Government is  a risk taker when it boosts state sponsored research  for drug development. Unfortunately, the  role of a losing state was evident  when it  obsessed with  the deadweight loss of the producers like Poonawalla. Even though there  was ample time to develop herd immunity from the first wave to the current period, it was not dealt effectively. In the meantime, countries in the Europe and USA  could manage the crisis.

USA is always in the forefront in extending state support  to sponsor innovation in the private sector for a common good. USA proved  state could take a massive scale risk to spur innovation. State played a significant role  in the fields of science and technology, small businesses etc. the invisible hand of the state was there in all radical areas including pharmaceuticals. The Orphan Drug Act  (2013) made it possible to develop drugs for rare diseases.

Orphan drugs

The drug which is used for a rare disease that affects less than 20000 people in a potential market cannot expand production without financial incentives is known as orphan drugs. The above-mentioned act supports the small firms to scale up production and allowing them to become a potential player in pharmaceutical industry. It is not only the small firms benefitted , but also the  giant firms such as Johnson & Johnson, Pfizer and many others was encouraged to use the same. Statistics shows 59 percent of total revenues of biopharmaceutical firms comes from sale of orphan drugs. In critical times, the government of our country can take a deliberate effort of being a subsidizer of drug development and the protector of the people of the state.

 

 

Is India really a global pharmacy hub?

Recent announcement of the prime minister of India had created discussions on India’s ability as a global factory of drug manufacturing. India is by now accounting for 16000 plus pharmaceutical firms including small and large ones. In terms of volume of production India’s pharmaceutical industry is the fourth largest globally but notably in terms of value, India rank at the 13^th position globally.  One reason for this dispersion between volume and value of production are embedded in certain specific characteristics of the pharma firms in India. An interesting observation in this regard is that by and large (though there are exceptions), Indian pharmaceutical firms are generic drug producers where the role of patents in capability accumulation is less compared to the other segments of the industry.  In the last years, more than 76 percent of the  patent applications filed in the Indian patent office are by foreign firms with USA, Japan and Germany accounting for 45 percent. This trend raises doubts over the technological capability of the Indian pharmaceutical sector in fostering the emerging needs.

Public funded innovations with fair risk-reward sharing are essential to boost capability-based drug development. The government has played an active role in the development of pharmaceutical industry in India especially through two remarkable Patent Acts. The Patent Act of 1970 permit pharma companies only for process patents but not product patents. This has encouraged firms especially generic drug producers in manufacture drug molecules cost effectively and efficiently. The Patent (Amendment) Act 2005 re-established the product patent regime after three decades. Now the need of industry lies in increased R&D capability with adequate support via public funding. University/research institutions - firm based collaborations as prevalent in developed countries can be a feasible business model in fostering the future need of the industry.