India’s mission to provide affordable, quality medicines
The launch of the Jan Aushadhi scheme has created a system to sell high-quality, generic drugs in nearly every part of India to address the country’s enormous out-of-pocket medical expenditure
Medicines can account for nearly 90% of health care spending by the poor. According to the Health in India report, Out of all health expenditure, 72% in rural and 68% in urban areas was for buying medicines for non-hospitalised treatment. This is the situation, despite India being branded as the pharmacy of the world, producing nearly 20% of the generic medication worldwide by volume and 13th by value. Out-of-pocket expenditure is still responsible for 90% of health care spending. As doctors, we have numerous experiences where a patient discontinued treatment because of not being able to afford medicines.
Jan Aushadhi Kendras are not managed by the government, but by local entrepreneurs who own and run them. (HT/File Photo)
Western countries managed, to some extent, to control the cost of medicines by importing generic drugs from India. The generic name is the actual name of the chemical used as the drug. Drug manufacturers give medicines a brand name based on dosage, concentration, and patent rights. The companies then advertise their brand of medicines to make them popular and influence prescription behaviour of physicians, thereby increasing sales. Generic drugs are much cheaper primarily due to savings from marketing expenses.
Interestingly, when generic drugs become popular, the price of branded drugs comes down dramatically. In India, generic medicines can be legally produced when the patent rights expire.
In this backdrop, launching of the Pradhan Mantri Bharatiya Jan Aushadhi Pariyojana (PMBJP) by Prime Minister (PM) Narendra Modi not only challenged the status quo, but brought around an irreversible revolution in our health care sector. For example, the gemcitabine injection for cancer, a branded product, was sold for ₹6,000 in the market, while the generic version costs only ₹800.
Similarly, insulin for treating diabetes is sold at Jan Aushadhi Kendras for ₹71, while the branded product costs much more. Unfortunately, most pharmacies are reluctant to sell generic drugs because of the low margin. With a network of more than 8,700 Jan Aushadhi stores across the country, to a large extent, affordable quality medicines are available to the poor in most parts of the country. Behind the network of stores around the country is a governance model in itself. Built on a digital platform, the Jan Aushadhi scheme created an immaculate system to maintain the quality of drugs and address the logistics of supplying these quality drugs and disposables to thousands of Jan Aushadhi Kendras. The entire process was engineered with the help of technology which kept consumers at the centre.
It started with the tendering from recognised vendors, both private and public sector pharmaceutical companies, followed by state-of-the-art inventory management and forecasting systems with the warehouses and distributors. A rate contract mechanism was initiated for multiple vendors and suppliers so that a scenario of a stockout is avoided.
I have been reliably informed that to ensure that quality medicines were procured, a provision to blacklist vendors and suppliers was brought in. The procurement ecosystem was further bolstered by recognising and providing incentives to suppliers based on performance. The quality is assured through mandatory procurement only from World Health Organization Good Manufacturing Practice (WHO/GMP)-certified facilities. The products are further tested through laboratories accredited by the National Accreditation Board for testing and calibration.
The health care sector is the largest industry in the world. In most countries, the health care sector is the largest employer. Unfortunately, during the 75 years after Independence, our national policies never looked at the health sector as one of the largest employment generators. Thanks to PM Modi, today, the health sector has come to the forefront of national policies towards building a healthy and wealthy India.
Contrary to common perception, Jan Aushadhi Kendras are not managed by the government. They are managed by local entrepreneurs who own and run the business. Jan Aushadhi Kendras provide a vital opportunity for self-employment with sustainable earnings as the average sales of the stores have now reached ₹1.5 lakh per month.
Apart from maintaining an efficient supply chain on a credit basis, the government also offers incentives up to ₹2.5 lakhs to encourage more people to apply for Kendras. At Jan Aushadhi Kendras, sanitary napkins are sold at ₹1 and reach sales of more than 210 million. Jan Aushadhi Kendras have proven that there is a viable business model in taking care of the needs of the poor and creating millions of mini entrepreneurs. In the last three years, PMBJP has helped poor and middle-class families save nearly ₹13,000 crore. While it is not a direct cash transfer scheme, it has a similar impact on beneficiaries — crucial support from the government that impacts the disposable income of the common man.
The health care ecosystem has now evolved with some overarching welfare plans supported by individual government schemes as its pillars. Schemes like Swachh Bharat Mission, free LPG connections, Mission Indradhanush, the recognition of yoga and promotion of healthy foods such as millets are aimed at promoting a healthy lifestyle and preventing diseases.
The Ayushman Bharat health scheme has served millions of people by sponsoring secondary and tertiary health care at thousands of government and private hospitals. Until December 2021, medical procedures worth almost ₹30,000 crore have been performed under the scheme.
Today, India has the largest number of medical colleges in the world. With 605 medical colleges offering medical education to 90,825 students, we perhaps produce the largest number of doctors in the world. With financial intermediaries for the poor sponsored by the government, innovative low-cost health insurance, and affordable quality medicines, India will disrupt health care delivery.
Throughout his career, health care has always been one of the top priorities of PM Modi. Under his leadership, I do not doubt that India will become the first country in the world to dissociate health care from affluence. India will prove to the world that the wealth of the nation has nothing to do with the quality of health care its citizens can enjoy.
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