Kounteya SinhaKounteya Sinha, TNN | Sep 20, 2012, 02.12AM IST

Union health minister Ghulam Nabi Azad has cleared Rs 1,300 crore under the National Rural Health Mission (NRHM) for states to support their purchase of medicines.
NEW DELHI: India has made its first major move towards providing free medicines for all.

Union health minister Ghulam Nabi Azad has cleared Rs 1,300 crore under the National Rural Health Mission (NRHM) for states to support their purchase of medicines. The largesse will not only help buy general drugs for government-run hospitals but also those needed under the Janani-Shishu Suraksha Karyakram (JSSK).

Under the JSSK, all pregnant women delivering in public health institutions are entitled to free and cashless delivery, free C-section, exemption from user charges, free medicines, blood, consumables and diagnostics and free diet for three days in case of normal delivery and seven days in case of C-section.

The minister has also asked the states to prepare a policy articulation document, an essential drugs list and standard treatment protocols and introduce a procurement system and supply chain management.

“States already have a budget to purchase drugs but it isn’t enough. The latest allocation is to support the state budget for 2012-13,” said a ministry official.

Officials said that states will have to procure drugs through an open tender. Companies applying for the tenders will have to have good manufacturing practices compliance certificate, a no-conviction certificate and should have a specified annual turnover. The drugs will also have to carry a not-for-sale label printed on the packaging.

The ministry says upto 75% of private out-of-pocket (OOP) health expenditure is on purchasing drugs of which 76% is spent on purchasing OPD drugs.

The free medicines for all the programmes are estimated to cost Rs 28,560 crore during the 12th five year plan.

At present, the public sector provides healthcare to 22% of the country’s population and it is likely to swell to 52% by 2017 once medicines are provided for free from 1.6 lakh sub-centres, 23,000 primary health centres, 5,000 community health centres and 640 district hospitals.

Planning Commission says 39 million Indians are pushed to poverty because of ill health every year.

Around 30% in rural India didn’t go for any treatment for financial constraints in 2004. In urban areas, 20% of ailments were untreated for financial problems the same year. About 47% and 31% of hospital admissions in rural and urban India, respectively, were financed by loans and sale of assets.

A ministry official said it is being made mandatory for all doctors in the public sector to prescribe generic drugs and salt names and not brands.

The Cabinet has approved the setting up of a Central Procurement Agency (CPA) for bulk procurement of drugs.

“Only a handful states will be able to roll out free medicines by this year end,” a ministry official said.

Strongly backed by Prime Minister Dr Manmohan Singh himself, the free-medicines-for-all scheme has been referred to as the “real game-changer”.

The ministry has sent the National List of Essential Medicines, 2011, (348 drugs which includes anti-AIDS, analgesics, anti-ulcers, anti psychotic, sedatives, anesthetic agents, lipid lowering agents, steroids and anti platelet drugs) to all the states to use it as reference to prepare their EDL.

Tamil Nadu has been providing free medicines in its public health centres for the past 15 years, while Rajasthan introduced it last October. Both these states have a corporation that runs the show with complete functional autonomy.

A Planning Commission panel had said drug prices have shot up by 40% between 1996 and 2006. It said that during the same period the price of controlled drugs rose by 0.02%, while those in EDL increased by 15%. The price of drugs that were neither under price control, nor under EDL grew by 137%.

States have cut down on spending to purchase drugs, adding to aam aadmi’s woes.

A study by the Public Health Foundation of India recently found that while India’s per capita OOP expenditure for healthcare costs has gone up from Rs 41.83 in 2005 to Rs 68.63 in 2010, the per capita spending on drugs increased from 29.77% to 46.86% during the same period, while hospitalization cost went up from 11.20% to 22.47%.

Outpatient expenditure also increased from 30.63% to 46.16%.

Catastrophic spending, or percentage of households spending more than 10% of their overall income on healthcare, is nearly 15% in states that have insurance in place as against 11% in those that don’t have such policies.

Times View

Indians spend heavily out of their own pockets to purchase out-patient drugs, so providing free essential medicines is a welcome move from the government. However, it will remain a meaningless gesture unless good-quality drugs are provided, doctors are monitored to ensure that they prescribe generic drugs rather than branded ones and states put in place a transparent procurement system and supply chain management.