The Indian Government has vowed to make drugs free for all ahead of the next election but this is not a new pledge, just its latest attempt to realise an old one. Amelia Shepherd-Smith reports.
An average 15% per annum rise in the cost of medicines across India this past decade has seen drug prices double in some cases and triple in others. For the 32% of Indians living beneath the international poverty line of US$1·25 a day, the effect has been devastating.
In 2011, 60 million people in India were forced into poverty because they could not meet their health-care costs. In 70% of cases, drug payments in India will become out-of-pocket expenses that many families just cannot afford. When health-care costs represent more than 10% of a household's total consumption they are called catastrophic payments. For more than 5·1% of Indian households this is their reality.
Ahead of the 2014 general elections, the federal government has announced it will allocate more than $3·6 billion over the next 5 years towards the provision of free medicines in government hospitals. Generic drugs are meant to be free already in these facilities, but in two-thirds of cases, doctors will prescribe expensive branded medicines to patients instead, which they will then be forced to buy outside.
The challenge is partly one of supply. Less than 30 essential medicines are available in India's public hospitals and often they are out of stock. The other problem is corruption—the direct result of a decentralised drug procurement process at the district level. Though the Indian Government offers Medical Store Depots from which the various public hospitals will order drugs, such facilities are under no obligation to stock generic alternatives, and are generally thought to lack quality controls.
Across India, a lack of drug price controls has also invited corruption at the street level. Because there is no price cap on medicines, private companies can simply sell generic drugs at the same price as the branded version, and then pocket the difference.
To tackle corruption, the central government has proposed the introduction of a transparent drug procurement process at the state level. Giving priority to generic drug sales, the system, which will require the 6—12 month phasing in of new software and warehouses, will see the government increase its market share of all procurements from 7—35%. Sakhthivel Selvaraj, health economist at the Public Health Foundation of India, explains, “The goal will be to break the oligopoly of the big pharmaceutical companies through a system of open bidding.” Though the drug industry has little reason to worry about losing money. Even if the central government met its aim to provide 400—450 drugs from the National Essential List of Medicines free of cost, this would still only represent 10—15 % of their total supply.
The free medicine concept has merit. For 15 years, the south Indian state of Tamil Nadu has run a transparent online procurement system for medicines where all bidding is done at fixed rate prices and all stocking and provisioning information is openly available. The subsequent drop in drug prices has seen the total number of people using public health-care facilities in the state rise from 20% to 40%, compared with the rest of India, where the figure is less than 25%.
At the Public Health Resource Network, executive director, Ganapathy Murugan, supports central pricing but is less confident of the scheme's roll-out, predicting an operational nightmare in reality: “India's state mechanisms are corrupt and inefficient. There is a real risk that the drugs will wind up on the black market. Ultimately, the federal government can only offer guidance.”
Upendra Bhojani, Faculty Member of the Institute of Public Health in Bangalore, is worried about another issue—doctors who currently receive kickbacks from drug companies for providing branded medicines over generics. “Ultimately there also needs to be a promotion of rational drug therapy and standard treatment guidelines.”
GK Pandey, executive director at the All India Institute of Public Health, is not confident that the amount pledged for the initiative will be enough: “We have a population of 1·2 billion people, so the total investment needs to be multiplied 1000 times.” But in a country where more than 80% of people do not have health insurance the initiative is a positive start.
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