Govt proposes generic stores to widen access to cheaper drugs

Govt proposes generic stores to widen access to cheaper drugs
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First Published: Mon, May 12 2008. 01 16 AM IST
Updated: Mon, May 12 2008. 01 16 AM IST
New Delhi: The Union government plans to open a national chain of what it calls “generic drug stores”, one in each district, to sell inexpensive, unbranded medicine with help from the Red Cross Society, non-governmental organizations, charitable bodies and consumer groups.
Generic drugs are copy versions of off-patent drugs.
The project’s plan, first mooted by Union chemicals and fertilizers minister Ram Vilas Paswan at a meeting of the national pharmaceutical advisory forum about a fortnight ago, is now being fleshed out by his ministry.
The proposal is a second attempt by the ministry to make cheaper drugs available after its earlier scheme of creating more than 600 drug banks didn’t take off due to tepid industry participation. The drug banks plan envisaged the ministry setting up infrastructure and drug makers supplying medicines at half the retail prices. The plan didn’t gather steam as the administration proposed strict input cost-based price caps for 354 essential drugs—a measure the drug makers stiffly opposed.
This time round, the ministry plans to buy drugs from public sector pharmaceutical firms. “We are working on setting up generic stores in each district. By supplying the drugs directly from our PSUs (public sector units) right now and other drug makers subsequently, we will be able to save on trade margins, and marketing and distribution costs, and make drugs available at substantially lower prices,” said a senior ministry official, who did not want to be named.
The government might finance operating costs of these stores for four to five years, but they will have to sustain themselves over time, the official said, adding that a final cost estimate wasn’t yet ready.
Unbranded, non-patented medicines, also referred to as “generic-generic” drugs, make for some 7% of the Rs34,000 crore domestic drug sales and are sold mostly through wholesalers and retailers. Through the proposed generic drug stores, the prices of such medicines could be brought down even further, given that trade margins on these are up to 50%.
The ministry will soon issue ads inviting non-profit bodies to open generic drug stores and offer a 10-15% margin to meet expenses, the official said. The interested parties will have to begin by furnishing location details and available space. They would also need to hire a qualified pharmacist as required by law.
The Indian drug industry has supported the plan, hedging it with riders. “We are willing to run the extra mile if there is a scheme that benefits people and doesn’t eat into the companies’ profits,” said Daara Parel, secretary general of Indian Drug Manufacturers’ Association, an industry lobby of small and medium domestic drug makers.
Tapan Ray, director general of the Organization of Pharmaceutical Producers of India, a lobby of foreign-owned drug makers, said members will consider participation in the scheme if the government asks them to.
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First Published: Mon, May 12 2008. 01 16 AM IST