India To Provide $5.4 Billion In Free Drugs To Citizens
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The Indian government has enacted a $5.4 billion policy that will provide free medicine for its citizens by the end of this year, claimed a report by Reuters on Thursday, with up to half of India’s 1.2 billion population expected to take advantage of the scheme within the next five years.
According to the report, the plan was quietly adopted last year; but had not been publicised until initial funding could be allocated, officials said.
The Indian government has enacted a $5.4 billion policy that will provide free medicine for its citizens by the end of this year, claimed a report by Reuters on Thursday, with up to half of India’s 1.2 billion population expected to take advantage of the scheme within the next five years.
According to the report, the plan was quietly adopted last year; but had not been publicised until initial funding could be allocated, officials said.
The report also noted that the free medication would only be limited to a generic drug list, with doctors likely to face punishment if they prescribed brand-name drugs.
[quote]“The policy of the government is to promote greater and rational use of generic medicines that are of standard quality,” said L.C. Goyal, additional secretary at the Indian Ministry of Health and Family Welfare.[/quote]“They are much, much cheaper than the branded ones,” he added.
At present, Indians spend close to 600 billion rupees ($10.99 billion) for pharmaceutical drugs each year, with brand name drugs making up about 40 percent of that sum, despite accounting for just 10 percent of all total sales.
Pharmaceutical giants such as Pfizer, GlaxoSmithKline and Merck for instance have long targeted the Indian market as the next area for growth, though the latest regulation would place a severe dent on their plans.
“Without a doubt, it (the new policy) is a considerable blow to an already beleaguered industry, recently the subject of several disadvantageous decisions in India,” said the European head of Chemicals and Pharmaceuticals Chris Stirling, who was referring to a decision by the Indian government in March, which granted permission to a domestic drug to reproduce a copy-cat version of Nexavar, a cancer drug developed by Germany’s Bayer.
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[quote]With emerging markets are on track to make up 28 percent of global pharmaceuticals sales by 2015, up from 12 percent in 2005, Stirling warned that “pharmaceutical firms will likely rethink their emerging markets strategies carefully to take account of this development, and any similar copycat moves across other geographies.”[/quote]Nevertheless, the benefits of the new policy for Indian citizens are clear, especially in a country where public healthcare spending was just $4.50 per person last year.
“I think this will hasten overall growth of the pharmaceutical industry, as poor patients who could not afford will now have access to essential medicines,” said Tapan Ray, director general of the Organisation of Pharmaceutical Producers in India (OPPI).
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Under various existing programmes, around 250 million people, or less than a quarter of India’s population, now receive free medicines, according to the health ministry. But the new policy, to be implemented by the end of 2012 and rolled out nationwide within two years, is expected to provide 52 percent of the population with free drugs by April 2017.
Indian state authorities will be expected to cover 25 percent of the cost of the free drugs while the central government takes care of the rest. The government hopes that its annual cost will eventually be lower due to bulk purchasing and because patients at private clinics would still pay for their own drugs.
The free generics scheme, is also expected to be fully operational by the time voters go to the polls for the 2014 general election, when the populist Congress party will seek a third straight victory.
