The Hindu Business Line : Govt plans pharmacy chains for making cheap drugs accessible

WITH the affordability of drugs in the product patent era being a priority for the United Progressive Alliance (UPA), the Government is toying with the idea of setting up pharmacies across the country.

Senior officials in the Ministry of Chemicals and Fertilisers said, "The National Common Minimum Programme (CMP) focuses on healthcare and access to cheap drugs. Setting up pharmacy chains, through a Centre-State initiative, is one of the options we are looking at."

However, the proposal is still in the conceptual stage with several issues that need to be ironed out.

For instance, the earlier Super Bazaars or Kendriya Bhandars formed under the Multi-State Cooperative Societies Act failed due to managerial inefficiencies and mismanagement.

"The success of the project would depend on its financial sustainability and management," officials said.

The project could be Centrally sponsored with the State Governments contributing to it. However, the ratio of the Centre-State contribution would have to be finalised, with the State Governments responsible for running the medical stores.

The Government is planning to use a successful model running in Rajasthan as its blueprint. The Rajasthan Government has encouraged the setting up of Life Line Fluid Stores (LLFS) in all hospitals with 100 or more beds.

These sell IV fluids, surgical items, injectible antibiotics and other such drugs at prices 40-50 per cent lower than the market rates.

Currently, there is no financial involvement of the State Government for the operation of these stores, as they have become self-sustainable.

The LLFS survives on 10 per cent operational margins and work on a no-profit-no loss basis.

Ministry officials said that such a system would enable the Government to tackle the issue of high margins offered by generic drug companies to traders and retailers to push their products.

Previously, these companies offered trade margins between 500 per cent and 2,000 per cent to retailers and wholesalers. This is being capped by amending the Drug (Prices Control) Order 1998.

"The Rajasthan model chain of pharmacies will bring down the prices as it would almost put an end to trade margins. Also, if bulk purchases are made, the prices would automatically come down," the officials said.

As part of the Union Government's concern about ensuring affordability and availability of drugs, a three-member panel chaired by Mr Anwarul Hoda, Principal Adviser, Planning Commission, has been constituted to explore various options other than price control.

The other members include Mr G.S. Sandhu, Joint Secretary, Ministry of Chemicals and Fertilisers, and Ms Rita Teotia, Joint Secretary, Ministry of Health and Family Planning.

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