Achieving universal health coverage through an equitable system is among the key goals of India's 12th Plan. Within the overall objective of creating an entitlement-based health care system, one of the challenges is access to medicines. The High Level Expert Group instituted by the Planning Commission on Universal Health Coverage underscores serious policy distortions and inefficiencies that stand in the way of making essential medicines accessible to all. A far-sighted programme assuring free or affordable access to drugs can make a big difference. Today household expenditure on drugs constitutes 71 per cent of all out-of-pocket spending on health. Reducing this burden requires a carefully crafted plan, the blueprint for which has been presented by the expert group chaired by Dr. K. Srinath Reddy. What it requires is greater public investment on drugs, an expanded official list of essential medicines, effective price controls for essential drugs, and a pooled procurement system that leverages the benefits of scale to drive costs down. The substantial cost benefits of centralised procurement for the government system have been convincingly demonstrated in Tamil Nadu, encouraging Kerala to adopt the same model; Bihar, Madhya Pradesh, and Orissa are in the process of replicating it.

National Sample Survey data indicate that free drugs supplied during hospitalisation declined from 31.20 per cent in 1986-87 to 8.99 per cent in 2004. The high cost of medicines from the mid-1990s resulted in out-patients not receiving drugs in one-fourth of all cases by 2004, up from 12.11 per cent in the base year. It is important therefore that the central government acts urgently on the expert group's suggestion to move to a system where essential medicines are available free of cost to everyone. It is estimated that this can be achieved through a four-fold increase in public spending on drugs. Such a programme should rely mainly on quality generic drugs produced by a revitalised public sector and compulsory licensing under the TRIPS Agreement of WTO. It is worth pointing out that in the absence of social health insurance, several patented medicines are beyond the reach of the majority of Indians. More households will come under calamitous pressure, if enhanced patent provisions forming part of bilateral agreements (such as those with the European Union and Japan) lead to higher drug prices. Rising India with its hundreds of millions of desperately poor people can ill afford to go down that path. Creating a system of standard treatment, pooled procurement, and decentralised distribution by the government, which will lead to massive savings, brooks no delay.

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