The Economic Times
9 February 2009

The recent announcement of the government to set up Jan Aushadhi stores is a welcome step. However, the decision needs to be seen in the context of the situation of access to medicines and impact on healthcare costs in the country. Over half of India’s population does not have access to essential medicines.

Studies show that about 80% of healthcare costs are accounted for by medicine costs, and the proportion increases in the poorest sections. In volume terms India is the fourth largest producer of medicines and exports medicines to over a 100 countries.

So local availability is not the issue that compromises access. The constraint is primarily financial – the poor who are likely to need medicines the most are unlikely to be able to pay for them.

The UPA government, in its CMP, had promised to control the prices of all essential drugs. Two years ago it announced the new drug policy without the portion that deals with drug prices. Since then the issue of drug price control has been referred to various committees and now lies with the group of ministers chaired by Sharad Pawar.

Given this, suspicions of back–room deals being worked out with drug companies may not be unfounded. Recent reports suggest that the Jan Aushadhi outlets shall sell medicines at a quarter to less than one–tenth of the present retail prices. This is a clear indication of profiteering, which the government does not wish to acknowledge.

While the move is welcome, a 100 outlets in a Rs 30,000–crore retail market for medicines is a drop in the ocean. At the least, all ration outlets should, over a period of time, have attached Jan Aushadhi outlets that sell all essential medicines for primary and secondary levels of care.

Unless this is done and followed up with drug price control mechanisms that cover all retail sales, the move may take the shape of an election gimmick. In which case the larger issue of drug price control would be put on the back–burner and the Jan Aushadhalayas would be just another sop that is capable, at best, of making a marginal impact while at the same time safeguarding the interests of drug companies by not imposing comprehensive price controls.

It is hoped that such is not the case, but past experience provides little room for optimism.

(*All India People’s Science Network)