- S.Srinivasan LOCOST, Baroda, India Email: locost@sify.com

1. -S.Srinivasan LOCOST, Baroda, India Email: locost@sify.com Increasing the Availability of Medicines in Public Health FacilitiesEvolving Consumer-Friendly Healthcare Systems in India - improving policies and practices, 24th May 2011

2. What we are aiming at? • Good quality health care should be accessible, affordable, and available to all in need. • As a matter of human right • The poorest person in a society should get the same quality of health care as the richest person. • in even the so-called developed economies, except the US, free quality health care is a reality with nobody having to pay at the point of service and nobody denied free health care.

3. Why Medicines are Important? • In India costs of medicine are anything between 50 to 80 percent of the total cost of treatment. • In addition patients have to pay for X-Rays, lab tests, CAT scans, etc. •  There is an inbuilt market failure in health and pharma markets in India and elsewhere

4. What can be done about providing medicines to patients in a public system? • Provide it • Provide it free • Do not get into user charges

5. Our Goal • Universal Health Care for all • It can begin with free quality medicines for all in the public health facilities • This is a doable task • It will bring back the patients to public health facilities

6. If drugs are not made available free in public health services? People seeking tt will decrease If at all, patients will end up going to go to pvt practitioners and retail drug shops And get exploited With the usual result: indebtedness

7. Why should we do give medicines free? -2 Medicines account for 70% of out-of-pocket expenditure. Even if patients are able to receive a free check-up at a government clinic, they are often forced to pay out-of-pocket for the actual medicines prescribed for their illness. At the local chemist, patients often pay a price 2 to 40 times higher than the bulk cost offered by pharmaceutical companies to retailers, private hospitals, nursing homes and government agencies.

8. Impoverishment Due to OOP Payments in India (In Millions) Source: Selvaraj and Karan (2009)

9. Price Regulation by Govt. • Price control basket has come down over the years: • 350 in 1978 to less that 74 now. • Prices of inessential drugs controlled – essentials are mostly left to the market

10. Some Points Worthy of Note All govtcommitees in the last 15 years have advocated price regulation Almost all ‘advanced free market economies’ have some form of price regulation

11. Case Studies 1) State level: TNMSC 2) District Level Intervention: The Chittorgarh/Nagaur ModelOf Low Price Govt. Cooperative Medical Store

12. Some features of TNMSC 270 drugs in its EDL (2007-08) 21 fast moving drugs account for 80 % of procurement budget ‘Speciality” drugs 322 - 10 drugs account for 85.6 % One drug – Temozolamide caps - 52 % 21 % of popln utilization in 2001-02 Services top to bottom level of care Drugs are free Source: Maulin R.Chokshi. TN Drug Procurement Model, Nov 2008, WHO-SEARO

13. Some Features of Chittorgarh/Nagaur Dt Models Services govt hospitals and series of essential drug shops at retail level In fact every distribution is ‘retail’ The coop/govt have no working capital costs Runs on 30 day credit and can even return unused drugs Drugs are not free except for BPL/poor All salaries of staff are paid by sales at 20 % margin Does not reach out to PHCs (in the usual sense) Source: Dr Samit Sharma, Dt Collector, Nagaur, and personal visit

14. Drug Expenditure • For calculating drug requirements for UAHC, we need: • Unreported unserved needs • Quantum of irrationality • Extent of rational drugs being used irrationally • Costs of Distribution of medicines, ware housing etc. • The TNMSC experience is probably the best indicator •  Drug estimates for UAHC all-India is Rs 20-25000 crores

15. How much does it cost? Towards some estimates If medicines are acquired at the bulk prices (at prices mentioned above) and under certain assumptions about current utilisation: Rs 9380 crores at TN Govt Prices Rs 30,000 crores at Chittorgarh prices This is for OPD and Inpatients all over India.

17. Table 1. A Comparison of Chittorgarh, TNMSC Procurement Prices and Retail Market MRPs

18. A positive side effect! Generics advertised by pvt pharmacists!

19. Some issues • How will the existing pharma sales reorient itself? • Start with free drugs only for OPD • Inclusion of AYUSH in these estimates • Universal Price regulation incldg pricing of patented drugs • Essential drugs only • Rational therapy • Patents/IP issues, CLs, FTAs, Section 3d • Takeover of India’s generic drug industry

20. Current Concerns • The crisis that is brewing by takeover of major Indian drug companies by foreign entities will undermine all efforts at health and pharma security. This needs to be addressed as a national emergency. We are bartering hard won self-reliance and self-sufficiency in health sector. • Compulsory Licence (CL) option should be seen as an adjunct to price regulation and prevention of takeovers in this sector. • No dilution of Indian Patents Act 2005 and TRIPS plus measures thru FTAs etc. Or Agreeing to ACTA, IMPACT, Investment Measures