Currently no one knows what the ‘Access to Modern Medicines’ in India is, in real term. Like many others, both local and global. I myself was quoting the World Medicines Situation of 2004 report, the base year of which is actually 1999. Thus there should not be even an iota of doubt in anybody’s mind that the above reported situation has changed quite significantly during the last decade in India and the statement that both the government and the industry alike has been making since then, ‘only 35% of the population of the country, against 53% in Africa and 85% in China has access to modern medicines’, is indeed quite dated. It does not make sense, at all, in the recent times of the Pharmaceutical industry in India.
More surprisingly, an updated information on the subject does not seem to be available anywhere, as yet, not even with the World Health Organization (WHO). However, the good news is, it has been reported that the ‘World Medicines Situation’ is currently being updated by the WHO.
Access to modern medicines is improving in India:
Be that as it may, CAGR volume growth of the pharmaceutical industry since the last ten years has been around 10%, leave aside another robust growth factor being contributed through the introduction of new products, every year. Encouraging growth of the Indian Pharmaceutical Market (IPM), since the last decade, both from the urban and the rural areas certainly signals towards significant increase in the domestic consumption of medicines in India. In addition, extension of focus of the Indian pharmaceutical Industry, in general, to the fast growing rural markets clearly supports the argument of increasing ‘Access to Modern Medicines’ in India. The improve in access may not exactly be commensurate to the volume growth of the industry during this period, but a major part of the industry growth could certainly be attributed towards increase in access to medicines in India.
For arguments sake, out of this rapid growth of the IPM, year after year consistently, if I attribute just 5% of the growth per year, for the last nine year over the base year, to improved access to medicines, it will indicate, at least, 57% of the population of India is currently having access to modern medicines and NOT just 35%, as I wrote in this blog earlier.
Unfortunately, even the Government of India does not seem to be aware of this gradually improving trend. Official communications of the government still quote the outdated statistics, which states that 65% of the population of India does not have ‘Access to Modern Medicines’ even today. No wonder, why many of us still prefers to live on to our past.
Be that as it may, around 43% of the population will still not have ‘Access to Medicines’ in India. This issue needs immediate attention of the policy makers and can be achieved with a holistic approach to resolve this issue. A robust model of healthcare financing for all socio-economic strata of the population, further improvement of healthcare infrastructure and healthcare delivery systems are the need of the hour.
Percentage growth in the healthcare budget is higher than that of the GDP:
With the increase of healthcare expenditure by 15% for 2008-09 and further increase in 2010-11, as announced by the Finance Minister in his recent Budget Speech, the healthcare expenditure as a percentage to GDP still remains around 1.0%, which is quite inadequate to address the key healthcare issues of the country.
The Prime Minister has already has expressed his intent that India will be able to increase its public healthcare spend to around 2.5% of the GDP, when GDP growth will touch the double digit figure of 10%, which I reckon, is no longer a pipe dream.
Explore a Public-Private Partnership (PPP) with the stakeholders of the Pharmaceutical Industry:
To address the critical issue of access to modern medicines, policy makers should now actively consider a series of closely integrated PPP initiatives. These PPP initiatives will initially include ‘Below the Poverty Line’ (BPL) families of our country, which not only constitute a significant part of our population, but also will have almost nil purchasing power for medicines. Thereafter, the scheme, slightly modified, should be extended to all ration card holders in India.
Possible impact of such PPP initiatives on improving access to medicines:
If such PPP initiatives are carefully and innovatively strategized, carefully planned and diligently executed, the access to modern medicines in India could increase from current 57% to over 63% of our population within a year’s time and to over 82% of the population over a period of next five years.
A ‘Back of the Envelope’ Strategy Outline:
The Objective:
To improve access to medicines to over 60% of the population one year after the execution of the strategy and to over 80% within the next five years. The key stakeholders, especially the pharmaceutical companies in India, will work closely with the Government under PPP initiatives for the improvement of access to modern medicines initially to the BPL families, significantly, who have almost no purchasing power for medicines.
The Plan:
- The stakeholders, mainly the pharmaceutical industry, to work out a suitable methodology to help the Government to reach all pharmaceutical formulations covered under ‘National List of Essential Medicines (NLEM)’ to the BPL families across the country and gradually extend it to all ration card holders in India.
- The government would extend appropriate Tax cuts to the concerned companies, as an incentive towards their involvement in the PPP initiatives.
- The National Pharmaceutical Pricing Authority (NPPA) would continue to strictly implement its drug price monitoring mechanism for all categories of drugs to keep their prices well under control, always.
Key Assumptions:
- According to Planning Commission of India (2007) the population of India is 116.9 Crore or 1.169 billion.
- According to ‘Centre for Science & Environment (August 2007)’ the latest figures on poverty place 27% of India’s population below the poverty line (BPL) out of which 72% reside in rural areas.
- No price of medicines will be affordable to the BPL families.
- The National Sample Survey Organization (NSSO) report on “Public Distribution System & Other Sources of Household Consumption, 2004 – 05” shows that only 28% of the rural poor have benefited from any type of government food assistance schemes, including ‘Public Distribution System’ and for urban areas the figure is just 9.5%. That means about 72 Million people below the poverty line are having ration cards.
- According to 1995 World Bank Study, the established per capita health spending is around Rs.320 per year.
- McKinsey in their report “India Pharma 2015” has stated that expenditure on medicines is 15% of total healthcare spend i.e. Rs.48 per year.
Methodology:
- Identify the number of BPL families who hold ration cards to receive free/subsidized medicine.
- Determine the cost to be incurred by the Government for purchase of medicines under NLEM.
- Devise a system of generating commensurate funds to improve access to BPL families.
- Operationalize the distribution of medicines to BPL families with public transparency
- Increase penetration of ‘Jan Aushadhi’ outlets simultaneously as a supportive incremental measure
Projected increase in ‘Access to NLEM Drugs’:
|
Million |
|
| Population of India |
1169 |
| 27% of Population is BPL |
316 |
| 72% rural |
228 |
| 28% urban |
88 |
| 28% of 228 million have ration cards |
64 |
| 9.5% of 88 million have ration cards |
8 |
| Total BPL ration card holders |
72 |
| Current Access to Modern medicines of 57% |
666 |
| When all ration card holders get NLEM drugs the access improves to: |
738 |
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SO, IF AT LEAST THE BPL RATION CARD HOLDERS GET NLEM MEDICINES, ACCESS IMPROVES FROM 57% TO 63.2%.
Cost implications of Increasing Access from 57% to 63.2%:
- 72 million ration card holders will need Rs.48 worth medicines per year i.e. Rs.3456 million or Rs.346 Crores.
- If Industry contributes 0.6% of its turnover which will attract full tax (both direct and indirect) exemptions from the Government, the industry contribution works out to Rs.170 Crores.
- A similar amount should be provided by the Government for purchase of free/subsidized medicines for exclusive dispensing to the BPL families.
To operationalize improved ‘Access to Medicines’:
- All ration card holders to be provided with a separate card (if not a smart card) for issue of medicines with a Unique Identification Number.
- Each ration shop will have a separate counter named ‘Jan Aushadhi’ for medicine, which will cater to only registered BPL families.
- Government to arrange to train the Ration Shop owners/employees in Pharmaceutical storage and dispensing
- Doctors of Primary Healthcare Centers, Block Dispensaries will be directed to provide free treatment and prescribe NLEM medicines to the members of BPL families holding such ration cards.
- Subsidized/free supply of medicines will be made against prescriptions from the ‘Jan Aushadhi’ counters of the Ration Shops to these families.
- The doctors’ prescriptions with a copy of the bill will be retained by the respective Ration Shops to account for such purchases of medicines by the BPL families.
- More & more members of BPL family will be encouraged to register for ration cards and be eligible for free / subsidized medicines.
Conclusion:
On completion of this scheme for BPL families and after covering all ration card holders, overall the access to modern medicines in India could increase from 57% to over 80% over a period of 5 years.
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.