Mon, 21 Oct 2013 06:30:00 GMT | By The Hindu Business Line

Low-cost drugs scheme modified; will it work now?

The original plan to sell low-cost medicines remained a non-starter, as State governments rolled out free medicine schemes


Low-cost drugs scheme modified; will it work now? (© AP)

Mumbai: This November will mark five years since Jan Aushadhi, the Government’s initiative to sell low-cost medicine, opened its first store in Amritsar.

But, its record in the last five years has not been good. About 100 outlets operate at present, while another 50 have shut shop. Having learnt from its mistakes, the Government is giving the venture a fresh shot at success – as a more inclusive Jan Aushadhi (JA) format attempts to reach out to private drug-makers, civil society and consumers.

The original plan to sell low-cost medicines remained a non-starter, as State governments rolled out free medicine schemes. But the JA venture has been “reinvented”, says Dilsher Singh Kalha, Secretary-Department of Pharmaceuticals (DoP). The basket of drugs on offer has been expanded and the eligibility to open JA stores has been extended to industry, registered societies (in existence for four years), non-government organisations and unemployed chemists, among others.

The venture has been sanctioned Rs 150 crore for three years by the Planning Commission, adds DoP Joint Secretary Pradeep Yadav, indicating greater commitment to the venture. The JA stores will have about 360 drugs from the National List of Essential Medicines, as compared with the earlier 102. The stores will not be housed only in Government hospitals, and medicine supplies will be sourced from public and private drug-makers.

State authorities would be roped in to monitor the scheme, he said. And Odisha, Punjab and Rajasthan seem to be showing interest. From targeting only the economically weaker sections of society, the JA shops now look to cater to anyone looking to buy a generic medicine at a low price.

About 80 per cent of medical expenses are paid out of the pocket, and a good part of that goes towards medicines, explains Yadav, on why people will gravitate towards low-cost medicines. There are incentives too, he says, as franchisees opening a JA store get a sales-linked incentive of 10 per cent of sale, every month, for the first year, among other things. A former JA worker, who wished to remain anonymous, said the Government needed to ensure that franchisees paid employees their regular salaries.

Representing large drug companies, an industry representative pointed out that the Government’s obsession with giving supply-orders to companies offering the lowest price (L1) made it difficult for them to balance low-cost and quality. Government officials clarified that quality would be ensured through routine and random tests. S. Srinivasan of voluntary agency Locost said the terms of the scheme were workable. But the Government needed to tighten logistics, warehousing etc. The initiative to supply low-cost medicines is important, as much of the medicine-related expense is from one’s pocket, he said.

But, the last mile of that initiative is the doctor, he pointed out, who needs to also prescribe the chemical or generic name of the drug, to avoid confusion at the chemists’ level.

As the stumbling blocks get removed, it remains to be seen if the new avatar JA is able to make a dent in the price-sensitive medicine market.

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