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Survey says government has taken several steps to reduce out of pocket expenditure on medicines (Photo: PTI)
Survey says government has taken several steps to reduce out of pocket expenditure on medicines (Photo: PTI)

Economic Survey: Free medicines not really free for most patients

  • More than 60% of the patients are still forced to pay for some of the medicines they receive

New Delhi: The government’s major initiatives to provide affordable healthcare for all notwithstanding, majority of patients are forced to pay for some free medicines leading to 'out of pocket expenditure' (OOPE), the Economic Survey 2019-2020 said on Friday.

“Government has made various provisions to provide medicines free of cost in Government facilities, but in reality, a majority i.e. more than 60% of the patients are still forced to pay for some of the medicines they receive," the survey, presented by finance minister Nirmala Sitharaman in Parliament, said.

“The Government has taken several steps to reduce OOPE and burden of diseases in the country. One of the major steps taken by the Government to move towards Universal Health Coverage has been the launch of Ayushman Bharat. Free Drugs and Diagnostics Service initiatives are another key initiative to bring down OOPE," it said.

The survey also highlighted that the regulation of prices of drugs, through the Drugs Prices Control Order (DPCO) 2013, led to increase in the price of the regulated pharmaceutical drug vis-à-vis that of an unregulated but similar drug.

“The increase in prices is greater for more expensive formulations than for cheaper ones and for those sold in hospitals rather than retail shops. These findings reinforce that the outcome is opposite to what DPCO aims to do - making drugs affordable," said the survey report.

“Government, being a huge buyer of drugs, can intervene more effectively to provide affordable drugs by combining all its purchases and exercising its bargaining power. Ministry of Health and Family Welfare must evolve non-distortionary mechanisms that utilise Government’s bargaining power in a transparent manner," it said.

The survey also pointed out that the rural public health facilities across the country face difficulty in attracting, retaining, and ensuring regular presence of highly trained medical professionals.

“There exists shortfall across all cadres in the posts of doctors and specialists. There are large number of Primary Health Centres (PHC) which are functioning with one doctor or without doctor. The States where large number of PHCs are functioning with ‘one doctor and without doctor’ indicate relatively higher level of rural Infant Mortality Rate (IMR) and Maternal Mortality Ratio (MMR) compared to other States," the report said.

Moreover, the report also pointed out that what this data does not reveal is that even if the personnel are present, their level of participation in providing health services, may not be at desirable levels due to lack of supplies, inadequate infrastructure facilities, poor monitoring of the staff, and so on. “Public health services delivery in rural areas warrants better governance mechanisms through adoption of technologies, community and Local Self Government (LSG) participation and social audit," it said.

While the survey has also pointed out that the expenditure on healthcare hovers around 1% in India, public Health experts claim that the government needs to scale up the budget for health for all round improvement in the tier 1 and 2 cities. “The government should focus on creating the healthcare infrastructure and invest extensively in upgrading primary and secondary healthcare services in tier I-II cities in the country. The budgetary allocation should be enhanced on the primary health and on establishing the health and wellness centres (announced under Ayushman Bharat) which will help to reduce the disease burden," said GSK Velu, Chairman and managing director, Trivitron Healthcare, a medical device company providing equipments and products to the healthcare industry.

Despite Ayushman Bharat having helped in bringing down hospitalisation expenditure for people, most patients are still forced to purchase medicines and diagnostic services from an open market, health experts have pointed out.

“Government investments towards the provision of free essential medicines have failed to result in the desired impact. Reasons have varied from state to state: lack of capacity of public health managers to do scientific disease-burden based demand forecasting; prescription practices which focus on brand names against generic formulations; and poor warehousing and supply chain infrastructure," said Himanshu Sikka, Chief Strategy & Diversification Officer and Lead – Health, Nutrition & Wash, IPE Global,an international development consulting company.

"In the past couple of years, many states have implemented IT-based Drug Distribution Management Systems. Going forward the focus needs to be on building human capacity and looking at AI-based solutions for demand forecasting. Augmented AI or Humanistic AI, where IT systems enable humans to effectively do demand forecasting and manage supply chains could provide the ideal solution," he said.

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