How India can make cheap and quality medicines available to all
In the mid-1990s, India identified availability, accessibility and affordability of medicines as the major weaknesses in its drive for quality and affordable healthcare for all. More than a decade passed before the UPA government started the Jan Aushadhi Scheme (JAS) in 2008 to counter high prices of branded drugs with affordable generic medicines sold at dedicated JAS outlets.
However, until 2012 only 157 JAS stores were opened. The Modi government tried to galvanise JAS — renamed Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) — by increasing the number of stores and the basket of medicines. Advertising and promotions increased awareness about the benefit of buying medicines from PMBJP stores at 50-90% discount compared to branded options. Doctors in government hospitals increasingly prescribe generic medicines and encourage patients to buy from PMBJP stores. But the scheme is far from popular because PMBJP stores are few and medicines are often unavailable.
Although the number of PMBJP stores has now increased to 2,100, it is just 0.4% of the roughly 5 lakh pharmacies in India. Tangled procedures have denied approval to about 8,000 other applicants. Most PMBJP stores have only about 200 medicines at a time out of a planned list of over 600 when non-PMBJP stores stock 2,400 medicines, on average.
Medicines for chronic ailments are especially scarce at these stores, with some delivered at six month intervals. Extensive stock-outs across stores discourage patients, who already have doubts about the quality of generics, from coming back. A few PMBJP stores that I visited across Mumbai and NCR claimed their sales are at about a fifth of non-PMBJP pharmacies in their neighbourhood, and their operating costs are significantly higher than their margins. Noble as the PMBJP scheme is, it needs to be salvaged with PM Modi's pragmatic 'minimum government, maximum governance' formula.
Instead of shackling it to BPPI, the scheme's commercial operation can be auctioned region-wise to 4-5 private players. Privatisation will include responsibility for all aspects of the business, from procurement to distribution, under the price guidelines and quality controls set forth by National Authority (NPPA) and DCGI (Drug Controller General of India).
They could procure medicines from any manufacturer complying with WHO current good manufacturing practices (cGMP) but would incur heavy penalties for repeated stock-outs. Private players should be allowed to open as many PMBJP stores as they can cater to, either themselves or via franchisees, with guidelines on the minimum number of stores to be opened in rural areas.
To enlarge the distribution network, all 5 lakh pharmacies in the country, online pharmacies and ecommerce players like Amazon and Flipkart can also be licensed to sell PMBJP medicines on the condition that they will educate consumers about value buying through prominent advertisements. With its expanded distribution network and logistical muscle, PMBJP could be a game changer.
The programme can be fast-tracked by genericising the National List of Essential Medicines (NLEM) and linking it with PMBJP. Currently, over 75% of branded NLEM products are contractmanufactured but have high prices because pharma companies aggressively market them to doctors and chemists with monetary and non-monetary benefits.
For genericisation of NLEM products to work, the government will have to provide quality assurance. NPPA has the competence to set prices of generic drugs while DCGI has the expertise to certify manufacturers abiding by the compliance monitoring programme (CMP). Even then the regulatory ecosystem will need to be considerably strengthened over the next three years. The real challenge will be to get buy-in of PM Modi's vision from the powerful lobbies of pharma companies, medical practitioners and chemists.