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How Modi govt’s strategic plan helped open 5,000 Jan Aushadhi Kendras and deliver 1,000 medicines at less than half the market price

The endeavour of this project is to make all commonly used medicines available at all Jan Aushadhi Kendra’s and to provide a complete spectrum of healthcare products at all outlets.

How the Modi government’s strategic plan helped open 5,000 Jan Aushadhi Kendras and deliver 1,000 medicines at less than half the market price.

Medicines account for nearly 70% of treatment costs, putting access to basic healthcare out of reach of the majority of the public. To tackle escalating costs, Pradhan Mantri Bharatiya Jan Aushadhi Yojana was introduced in 2008 but failed to overcome challenges and make a difference in the lives of citizens. A renewed attempt under the Modi government has resulted in opening 5,000 stores, providing more than 1,000 medicines. This strategic push under PM Narendra Modi’s leadership has resulted in an estimated savings of more than Rs. 1,000 Crores for the public.

Introduction and Need for affordable medicines in India

Medicare is becoming significantly expensive year-on-year. Medicines account for nearly 70% of total treatment costs. Branded medicines are sold at higher prices due to the associated patent protection, advertising expenses and high-profit margins. It is estimated that branded medicines cost anywhere between 30-90% more than their equivalent generic medicines. Such high prices mean that quality branded medicines are out of reach for more than 40% of the Indian public, considering mainly the poor and disadvantaged. Guaranteeing fair prices for medicines has always been a major concern for the Government of India. Despite several regulatory and fiscal measures, the cost of medicines is still on the rise.

To combat the escalating costs of medicines, ‘Pradhan Mantri Bharatiya Jan Aushadhi Kendra’ was launched by the Government of India in the year 2008. The first Kendra was opened in Amritsar in Punjab. The initial target for implementation during the 11th five-year plan starting in 2008-09 was to cover 630 districts of the nation. Further subdivisional major towns and village centres were to be covered by 2012.

The objective of the scheme

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This scheme aims to bring down the cost of medicines and make it affordable for each and every citizen. The objective of the scheme is:

“Making quality medicines available at affordable prices for all, particularly the poor and disadvantaged through exclusive outlets ‘Pradhan Mantri Bharatiya Jan Aushadhi Kendra’, so as to reduce and redefine the unit cost of treatment per person.”

Mission

The Mission of the Pradhan Mantri Bharatiya Jan Aushadhi Parriyojana is as follows:

  • Create awareness among the public regarding generic medicines
  • Create demand for generic medicines through medical practitioners
  • Create awareness through education and awareness programme that high price need not be synonymous with high quality
  • Provide all commonly used medicines covering all therapeutic groups
  • Provide all related healthcare products under Pariyojana

Status of work done under Jan Aushadhi Pariyojana from 2008 to 2015

In house production of CPSU’s led to supply of only 139 medicines out of 319 that were supposed to be made available. Only 85 products covering 11 therapeutic groups were made available. As per the original plan, Jan Aushadhi kendras were aimed to be opened in each and every one of the 630 districts in India. But as on 2012, only 157 such kendras were opened with many of them nonfunctional.

The causes of failure were identified to be overdependence on support from State Government, poor medicine stock management, nonprescription by Doctors, lack of awareness about medicinal availability and competition with other State free medicine distribution schemes.

To overcome the initial challenges faced and provide a boost to the scheme, a new business plan was formulated with a target to open a minimum of 500 kendra’s during 2013-14. The results in 2015 also did not match initial expectations. By the end of 2014-15, only 99 Kendra’s were opened, and a number of medicines to be provided were only 200 with less than 50% availability.

Strategic overhaul and implementation by NDA

A Strategic Action Plan (SAP 2015) was prepared after the NDA Government’s complete analysis of the reasons behind the failure of the scheme. Areas studied were availability, acceptability, accessibility, affordability, awareness and effective implementation of the scheme. The scheme was later renamed as Pradhan Mantri Bharatiya Jan Aushadhi Pariyojana (PMBJP). BPPI (Bureau of Pharma PSUs of India) was established for coordinating procurement, supply and marketing of generic medicines.

The new strategy of Jan Aushadhi Kendra under the Modi government laid emphasis on the sustainability of the initiative with no dependence on government subsidies beyond the initial support. To make the scheme successful and sustainable, the government had sought collaboration with private pharmaceutical companies. Substantial incentives were also provided for entrepreneurs who were willing to open Jan Aushadhi Kendras. The budget was also allocated to create awareness regarding this initiative, and achieve scheme penetration in all villages.

Timeline of Pradhan Mantri Bhartiya Jan Aushadhi Pariyojana (PMBJP), from 2012 to 2018. Half of the stores were closed in 2012-13, since the inception of the scheme in 2008. After 2014, the pace of establishing Jan Aushadhi Kendra’s was increased exponentially. As on 22nd March 2018, 3,214 stores were established.

As a result, as on 10th March 2018, the following changes had occurred:

  • Product basket contained 1,000 medicines and 154 surgical products
  • Supply chain from suppliers to agents was streamlined for timely delivery of medicines.
  • Central warehouses were launched in Gurgaon.
  • 8 C&F agents and 55 distributors were appointed to cover all states and UT’s.
  • More than 3,200 Kendra’s were established across 33 States/UT’s.

Factors for success during NDA tenure

To enable more Jan Aushadhi Kendra’s across India, the NDA Government provided support to operating agencies. Financial support in the extent of Rs. 1 lakh for free medicines at start of Kendra, Rs. 1 lakh reimbursement for furniture & fixtures, and Rs. 50 thousand as reimbursement for computer & peripherals was provided. 2% of total sales or actual loss compensation against the expiry of medicines were also provided to stores. The credit facility was provided upto 30 days against post-dated cheques, with 60 days facility available for distributors. The government has also increased the margins from 16% to 20% for retailers and from 8% to 10% for distributors.

Indian Medical Association, an organization with 3 lakh doctors spread across 1,700 local and 30 State branches were contacted for collaboration. This association which stands for affordable, accessible and quality healthcare; collaborated with PMBJP and started promoting medicines available through Jan Aushadhi Kendra’s.

Indian Railways was roped in to open Jan Aushadhi Kendras at 1,000 railway stations and PSU-run petrol pumps.

The success of Jan Aushadhi Kendra’s under NDA Government

Due to effective strategies and successful implementation of this initiative, the following positive changes have occurred throughout the nation:

  • Currently, over 5,000 Jan Aushadhi stores have been opened, with additional 2,500 to be inaugurated by 2020
  • Jan Aushadi stores across the country are serving 10-15 lakh people per day
  • A decision has been made to celebrate March 7thas ‘Janaushadhi Diwas’ across India
  • Under the PMBJP, the government provides more than 1000 medicines and 154 surgical through Jan Aushadhi kendras
  • Average sales per store per month of Rs 1.50 lakh
  • 4 big warehouses opened at Delhi, Guwahati, Bengaluru, Chennai to ensure adequate medicine availability

The road ahead

The successful implementation of the Jan Aushadhi Yojana during the NDA tenure has led to reduction of medicinal costs of treatment. Medicines available through Jan Aushadhi Kendra’s are 4-15 times cheaper than alternative sold in the market. Anti-diabetic drug glimepiride priced at Rs 4.02 under the government scheme costs a whopping Rs 54 under a branded disguise. This anti-diabetic drug alone can save 13 times the amount if bought through Jan Aushadhi Kendras. A cap was placed on prices of stent and knee implants after they were lowered by more than 50%.

Comparison chart of medicines available through PMBJP verses similar medicines sold by leading brands. The difference between prices can be seen to be a minimum of twice the cost of medicines sold by brands. In some cases, the difference between prices is an astronomical 15 times.

PM Narendra Modi promised a legal framework to ensure that doctors prescribed low-cost generic medicines instead of expensive branded medicines. Prescribing a medicine by its molecular name rather than its brand name improves the possibility of a customer opting for a cheaper alternative to the prescribed medicine rather than buying one from a branded manufacturer with high costs.

Annual turnover of PMBJP has also increased to Rs 73.66 crore in 2017-18 (as on October 30, 2017) from Rs 33.4 crore in 2016-17 and Rs 12.43 crore in 2015-16, increasing rise in the adoption rate of this scheme. Rs. 74.16 Crores were allocated during the budget of 2017- 2018 to further boost the progress of the scheme.

The Modi Government is putting major efforts towards completing the initial vision of opening at least 1 Jan Aushadhi Kendra store in every block. As such plans are in place to open additional 2,500 Jan Aushadhi stores by 2020.

Jan Aushadhi Yojana has also resulted in the reduction of costs of Cancer treatment. As of now, the government is conducting talks with various companies to take the plan forward. Health experts, oncologists and institutes like Tata Memorial Cancer Hospital have suggested that prices of drugs for the treatment of cancer should be regulated by the government. Presently, the cost of only 51 such drugs is under price control of the government. Bringing more cancer-related medicines under price control of the government will help bring down cancer treatment costs extensively.

The endeavour of this project is to make all commonly used medicines available at all Jan Aushadhi Kendra’s and to provide a complete spectrum of healthcare products at all outlets. Accessibility to basic healthcare and medicines is a birthright of every human on the planet. PMBJP has taken bold steps towards enabling the right to medicine for every citizen and has led to savings worth Rs. 1,000 Crore for the Indian public until now. The NDA Government under the leadership of PM Narendra Modi is ensuring no step is left unturned towards providing health and medicines to every citizen of this nation.

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Dhairya Roy
Head - Project Management Office (Projects, Corporate Relations and Media), for Minister of Finance & Planning, Forests - Government of Maharashtra.

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