The proposed scheme of free supply of essential medicines in public health facilities (PHFs’), which is likely to prove handy for the generic manufacturers in the country, may not take off as expected, with the Centre could so far allocate only a fraction of the required amount.

Against the projected cost of Rs.4875 crore per year, as calculated by the Planning Commission, the Centre has so far sanctioned an initial amount of Rs.100 crore for the current financial year of 2012-13, thus putting chances of the ambitious scheme bleak and also spoiling the dreams of small and medium scale pharma units who were looking for a boost.

As per the calculation of the Planning Commission, the cost during the 5-year Plan Period to the Centre for ‘Free medicines for all in PHFs’ would be Rs.24,374 crore, as Centre has to make a contribution of 85 percent of the total cost of Rs.28675 crore. Besides, the Centre also has to provide a capital cost of Rs.1293 crore, without any share from the states.

The government proposes to start the scheme aiming to provide affordable health care to the people by reducing out of pocket expenses on medicine. This initiative will promote rational use of medicines. The initiative is based on the Tamil Nadu model where medicines procured in bulk by the Tamil Nadu Medical Services Corporation (TNMSC), in generic name, directly from the manufacturers is supplied free of cost. The states will be asked to set up TNMSC like institutions or use existing autonomous bodies for bulk procurement of drugs.

However, sources said, the scheme will start functioning soon and the software for the supply chain management is ready. The IT-enabled supply chain management is going to be a crucial element of the scheme as drugs would be supplied by the district warehouses. The technology will facilitate a smooth supply management by tracking the stocks and enabling the distribution. It is going to be a demand sensitive passbook system instead of the traditional ‘supply driven’ inflexible system of distribution, sources said.

“Out of 100 patients needing care, currently only 80 use public or private facilities; 20 are unreached. Amongst those who access health care, currently utilization of public health services is on an average around 20-25 per cent. Based on the Tamil Nadu experience, it is hoped that it will increase to 40 per cent when free medicines and quality care will be provided in the PHFs. Infrastructure strengthening for delivery of the scheme is being separately provided for under the NRHM which will also carry out IEC activities for creating awareness about this Scheme. Secondly, the erstwhile 20 per cent unreached very poor people would also now access services in PHFs. It is therefore estimated that by the end of the 12th Plan, in different states, on an average, 52 per cent of all patients would receive care from the PHFs,” according to a report by an expert panel of the Planning Commission.

“Bulk procurement of generic medicines directly from the manufacturers will be done from a list of mainly essential medicines and some others, drawn up taking into account state-wise variations in morbidity. For this purpose the NLEM 2011 would be used a guide. The procurement of drugs needs to be made under International Non-proprietary Names (INN) only,” the report said.