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Medicine scheme for poor, can also cure sick PSUs

Quality medicines at affordable price- that’s the objective of the government’s Jan Aushadhi (medicine for masses) programme.

india Updated: Oct 12, 2009 01:16 IST
Vinod Sharma

Quality medicines at affordable price- that’s the objective of the government’s Jan Aushadhi (medicine for masses) programme.

Launched in the twilight phase of the UPA’s first term, it’s still in a fledgling stage, not for any lack of potential, but the absence of a decisive push- expected anytime soon.

Like a double action tablet, it could restore to financial health sick public-owned pharmaceutical companies, besides putting essential drugs within the reach of the poor and the lower middle class.

The scheme’s inherent appeal is in marketing generic medicines. Such drugs, produced and distributed without patent protection, are usually priced lower than branded products.

Example: A 60 ml bottle of generic Paracetamol syrup is sold for Rs 8.10 at Aushadhi outlets. The same quantity of analgesic for treatment of cough or chest congestion costs anything between Rs 14 to 18 in branded form.

So, it’s difficult to hide the scheme’s utility. It had a humble start late last year with 20 outlets fed by five pharmaceutical companies in the public sector —IDPL, Rajasthan Drugs and Pharmaceuticals, Hindustan Antibiotics, Karnataka Antibiotics and Bengal Chemical.

The supplier firms are sick and in dire need of aushadhi (medicine) for financial revival, said Minister of State for Chemical and Fertilisers Srikant Jena. “We can do that through the generic medicine route.”

The chances of Jena’s words coming true are bright. On the PSUs’ menu are 232 medicines for common ailments. The list will expand to cover 350 (non-patent and off-patent) drugs the World Health Organisation has placed in the category of essential medicines.

Once that happens and the proposed network of 250 Aushadhi outlets is in place, the PSUs can hope to pick up good equity in the Rs 65,000 crore (Rs 650 billion) domestic drug market.

The scheme is not capital intensive like the National Rural Employment Guarantee Scheme, but it will serve the people as much with little help from states and the medical fraternity, said Jena.

Aushadhi’s business model is simple. Drugs manufactured by PSUs are sold at exclusive generic medicine outlets in district hospitals. The operation involves individual licence-holders, non-government organisations and Red Cross societies, which get 20 per cent commission on sales.

Letters have gone to all state governments from the department of pharmaceuticals, under the chemical and fertilisers ministry, for allowing Aushadhi stores in district hospitals.

Jena said he had received “excellent” field reports from Haryana, Rajasthan and Punjab that already have the outlets.

A store in Amritsar does a Rs 400,000 business every month. “Doctors in Amritsar prescribe branded drugs but patients queue up for cheaper generic options at Aushadhi,” the minister said.

In Harayna, generic medicines have helped expand the government’s ‘free medicine’ programme without extra financial liability. Rajasthan is aiming for 400 outlets.

Private companies are already exporting generic drugs to the US and European countries. They can easily compete with Aushadhi stores by reducing maximum retail prices. In that scenario, the consumer shall be the King.