Free medicines to all patients at all government health facilities could soon be a reality, with the health ministry ready to roll out a Rs 30,000 crore ‘medicines for all’ scheme with the strong backing of the Prime Minister’s Office.

The plan got a thumbs– up at a meeting chaired by Pulok Chatterjee, principal secretary to PM, on Friday. The Sonia Gandhi–chaired NAC is set to take it up on February 17.At a meeting chaired by principal secretary to PM Pulok Chatterjee on Friday, the medicine for all scheme got a thumbs–up, with Prime Minister Manmohan Singh keen to roll out health sector initiatives. The medicine proposal will help cut India’s tremendously high out–of–pocket (OOP) expenditure on healthcare. The government wants to peg healthcare spending at 2.5% of GDP, or about Rs 2.5 lakh crore a year, in the 12th plan.

Speaking to TOI, a ministry official said, “We are ready to roll out the scheme which will provide free generic medicines to all those who visit government health care facilities across the country. This will reduce OOP expenditure and also encourage more people to visit government health facilities. However, we can’t make the announcement now with the elections on as it would violate the Election Commission’s guidelines.”

Instead of increasing public spending on drug procurement when millions of Indian households have no access to medicines because of they are unaffordable and also do not receive them free–of–cost at government health facilities, several large states have cut down funds in buying them. Consider the case of Kerala. Even though the state spent the highest in India on drug procurement last year ––12.5% of its health expenditure –– the expense was significantly less as compared to 17% in 2001. Tamil Nadu followed a similar methodology –– from 15.3% (2001) to 12.2% (2010).

The committee said low public spending on drugs and non–availability of free medicines in government healthcare facilities were major factors discouraging people from accessing public sector health facilities.

“We estimate that an increase in the public procurement of medicines from around 0.1% to 0.5% of GDP will ensure universal access to essential drugs, greatly reduce the burden on private OOP expenditures and increase the financial protection for households,” a report has said.

Drug prices have also shot up phenomenally in India over the past decade and a half. India reported a nearly 40% increase in all drug prices between the period of 1996 and 2006, thanks to the country’s price decontrol policies of the 1990s.

The sharp increase in prices of drugs has been the main reason for the rising costs of medical care, which more than tripled between 1993–94 and 2006–07.

Between 1993–94 and 2004–05, compared to a 67% increase in real per person income and an 82% rise in per person tax collections, real per person public health expenditure rose from Rs 84 to Rs 125 –– a spurt of 48%.