Strong medicine

Rupali Mukherjee | July 14, 2012

The Rs 28, 000-crore plan to make essential medicines freely available at government-run hospitals and clinics is laudable. But it should be rolled out only after an overhaul of the healthcare system and measures to plug the leaks in the flawed public distribution system

It's being billed as a game changer in Indian healthcare. The government's multi-crore plan to ensure the supply of free essential medicines at government hospitals and clinics is remarkably bold and ambitious because it covers the entire gamut of therapies such as anti-infectives, pain-killers, cancer, HIV, cardiovascular, antiplatelet and anti-ulcer.

A part of the effort to introduce a comprehensive universal healthcare system in the country, the project is being promoted by the Planning Commission and the PMO. So naturally the purse strings are also being loosened. The government has allocated Rs 28, 000 crore under the 12th Five Year Plan (2012-2017 ), of which around Rs 21, 000 crore (75 per cent) will be contributed by the Centre, while the balance will come from the states. For 2012-2013, a token amount of Rs 100 crore has already been allocated. At present, the government spends a meagre Rs 6, 000 crore annually on procurement of medicines for the public distribution system.

The Union health ministry too is keenly involved in the plans. "We have set up the Central Medical Services Society, which will provide the hand-holding to the states to form the drug procurement entity and carry it forward, " says Dr Arun Panda joint secretary, Union ministry of health. The modus operandi will work thus: the states will procure the medicines through an open tender system, as is the practice in Tamil Nadu. The scheme will offer low-priced versions of branded drugs (sold under molecule name) which form a minuscule 1-2 per cent of the organised retail market of Rs 60, 000 crore.

The plan has already sparked off a big debate. The medical and pharmaceutical fraternity doubts the feasibility of the project and there are fears that it may be difficult to deliver it in rural areas and small towns with abysmal health infrastructure.
"It doesn't appear easy to do and will not be efficiently implemented. The government should produce generic medicines in their own public sector drug factories and make these available either free or at affordable prices, " says Dr YK Hamied, chairman of Cipla, which revolutionised the industry by providing affordable treatments to thousands in India and the world. He adds that the company has offered the government free technology to produce any drug.

Satish Reddy, MD and COO of drug major Dr Reddy's Labs, shares the scepticism. He, however, feels that it is a great idea to reach out to millions who cannot access basic healthcare. "But the government should ensure safety, efficacy and quality of medicines, " he says.

Given the corruption and leakages that plague India's public distribution system, this skepticism may not be misplaced. Even if the procurement of low-priced quality medicines is somehow achieved, efficient delivery will be a huge stumbling block.
Agrees Tapan Ray director general, Organisation of Pharmaceutical Producers of India (OPPI): "The huge shortages in the number doctors, nurses, paramedics and hospital beds-per-1000 population will pose a great challenge in the speedy implementation of this project. India should respond to its healthcare infrastructure developmental needs much faster now to achieve its objective of providing healthcare to all. "

In India, nearly two-thirds of the population does not have access to basic healthcare facilities which includes diagnostics, doctors and infrastructure. Problems in access to medicines stem from inefficiencies such as poor planning, incorrect projections of requirements, poor distribution and supply at treatment facilities, expiry of the use-by date on medicines and, last but not the least, corruption.

Citing the example of the CGHS (Central Government Health Scheme), experts say that it has to struggle with supply issues, long serpentine queues and even rare drug names. Surveys have shown that of the essential medicines, at least 20-30 per cent are not available at government hospitals, says Dr CM Gulati, editor, Mims India, a reputed medical journal.

To make matters worse, large domestic companies like Cipla, Dr Reddy's and Ranbaxy may not even be able to take part in the grand scheme. "Since we follow stringent quality, testing and manufacturing standards, our costs are higher and we will not be competitive as against smaller regional players, " says an industry player, who did not want to be identified.

The price of medicines is not the only factor affecting access to healthcare. Lack of diagnostic facilities, bad healthcare infrastructure and distribution systems are other problems. "Generics play an important role in the healthcare system but it is important to recognise that India lacks sufficient trained healthcare staff to dispense medicines, " says Ranjit Shahani, vice-chairman and managing director, Novartis India.

There are other conceptual concerns too. Anything offered "free" is often seen as inferior in quality and worth. "Free never works, " says N H Israni, founder of Blue Cross Labs, a mid-size pharma company. He maintains that his company will not participate in the tender process even though its drugs are at least 40 per cent cheaper than those produced by MNCs and large domestic companies.

To ensure that quality is not compromised, the government would need to set up a stringent screening process for companies to bid in the tender process. This may prove to be difficult as most smallscale companies are still not complying with basic manufacturing norms, industry experts point out.

How will a deficit-strapped government fund this grand scheme? How will cash-starved states respond to a Central initiative? There are no answers to the questions yet. Critics say the scheme is being pushed through, without any planning, with the 2014 general elections in mind.

India's public spending on health as a proportion of GDP - around 1. 2 per cent in 2009 - is among the lowest in the world. Compare this with Sri Lanka (1. 8 per cent), China (2. 3 per cent) and Thailand (3. 3 per cent). India also registers nearly 70 per cent outof-pocket expenditure on health, according to World Health Statistics 2012. The figures for other BRIC countries are much lower - Russia 37 per cent, China 47. 5 per cent and Brazil 56 per cent.

rupali. mukherjee@timesgroup. com