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Access to medicine: Aiming the SDGs

How aiming towards sustainable development could help the medical industry?


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Rimy Khurana

3 years ago | 3 min read

One of the important aspects of Universal Health Coverage is to provide access to essential health services which undoubtedly includes the provision of essential and life-saving medicines and health products.

The National Sample Survey 71st round report cited that “in 2014 at all-India level as well as state level, highest percentage of total medical expenditure for non-hospitalised treatment is made towards medicines with 72% in rural sector and 68% in urban sector”.

The World Health Organisation estimates that nearly 2 billion people globally have no access to basic medicines, causing a cascade of preventable misery and suffering. World over, governments have been trying to have the right equilibrium to achieve access to affordable quality medicines on one hand and promote research and development in pharmaceuticals on the other. According to some industry estimates, it costs USD $2.6 billion to bring a drug to market, resulting in high drug prices and making them less affordable.

The Economic Survey 2017-18 unveiled that India has been spending a meagre 0.6-0.7% of the Gross Domestic Product on R&D every year for the last 2 decades. These figures are much lower than those of the US (2.8%), China(2.1%), South Korea(4.2%) and Israel(4.3%).

India, known as the ‘pharmacy of the world’ has a pharma market size of around INR 200,000 crores by value and third-largest by volume. The country is also proud of the fact that our country has the largest number of USFDA approved pharma manufacturing facilities outside the USA.

India is, however, confined to producing mostly low-cost Generics for self and for the rest of the world. In fact, from the mid-1950s until the early 1990s, when our once glory and pride- the pharma Public Sector Undertaking (PSUs) were in pink of their health, India was largely self-reliant. It was also one of the largest manufacturers and suppliers of Bulk Drugs/ API (an active pharmaceutical ingredient in the drug).

However, with continued price controls on API and intermediates, simultaneous globalisation and WTO regime, the imports of cheaper options from neighbouring countries became more lucrative and were preferred over indigenous manufacturing. Consequently, most bulk drug manufacturers including our pharma PSUs switched over to manufacturing generics.

India is also one of the largest producers of branded generics with multiple brands available for a generic drug which are sold at varying prices, with a huge price difference in many branded drugs when compared to its generic counterpart. To add to that woe, physicians and doctors’ resort to writing brand names over generic names of their preferred brands in routine prescriptions.

The Government of India (GoI), in its efforts to make quality medicines affordable and accessible to all and promote the use of generics drugs (since they are extremely low priced), came up with a countrywide scheme on Jan Aushadhi in 2008 and initiated setting up of retail pharmaceutical outlets across States and UTs.

The scheme aimed to reduce Out of pocket expenditure (OOPE) on medicines by providing drugs at 50-90% lesser price than in retail. The pace of setting up stores in the initial few years of the scheme was sluggish achieving only 157 stores (against a target of 1 per district) until 2012. The scheme was re-launched in a new avatar and rechristened as “Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana” or PMBJP in 2013 and so far, around 5000 stores across 35 States/ UTs have seen the light of the day.

Though the achievements in terms of numbers are laudable, if one were to look at the sales of these stores, the average sales per month per store are abysmally low at <1 Lakh per month. Further, even if these stores achieve the ‘2 Lakh per month’ sales target as envisaged in this scheme and all blocks were to have at least one store each, the contribution of these stores would be around 1% by value of the total pharmaceutical market in India.

These stores not just have to face stiff competition from Non-Jan Aushadhi pharmacy shops but must also compete with other parallel Central government schemes like Affordable Medicines and Reliable Implants for Treatment (AMRIT) and similar State government lead-free drug distribution schemes. On the other hand, a deeper dive into the details of the scheme at the ground level opens a pandora’s box which needs to be tackled swiftly while the scheme is heading for a rapid expansion in the number of stores.

Parallel efforts have been made to provide free medication and treatment under health insurance schemes of various State and Central governments (limited primarily to inpatient care of the select sections of the population) and national health programs (limited reach by way of their operational and implementation challenges).

These initiatives are being carried out and managed vertically with minimal to no convergence. To enable timely achievement of Standard Development Goal 3, these multitude efforts must be orchestrated with a simultaneous push towards R&D in the sector and revival of our API industry, to ensure a continued supply of quality drugs for the masses.

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