India Giving Free Drugs to the Poor

India Giving Free Drugs to the Poor

July 2nd, 2012 // 2:41 pm @

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As Americans debate the US Supreme Court ruling on the Affordable Care Act and how to pay for healthcare, India is taking a different tack, at least when it comes to medicines. Prime Minister Manmohan Singh has announced that medicines will be available free to everyone who needs them starting in October, and that $17.5 million has so far been set aside to finance the program through 2013, Pharma Times reports.

The government will fund 75 percent of the cost, which could run in the billions of dollars over five years, and individual states will finance the rest. The National List of Essential Medicines, which cites 348 drugs, will be used as a reference, although states will be required to establish their own lists based on local needs. About 5 percent of the funding will be available to purchase drugs that are not on these lists, Pharma Times writes. And docs working in the public sector will be required to prescribe only generics.

The move comes as out-of-pocket spending reaches 78 percent of total health expenditures, with drugs representing 72 percent of the total. Currently, 22 percent of India’s 1.17 billion population receives healthcare from the public sector, but this is expected to rise to 52 percent in 2017, according to Pharma Times. Meanwhile, the Planning Commission reported that drug prices rose 40 percent between 1996 and 2006, and those on the Essential Drugs List rose 15 percent. But the price of medicines not centrally-controlled or supplied through the list climbed 137 percent.

A study by the Public Health Foundation of India says per capita out-of-pocket spending on healthcare rose 64 percent in 2010, and per capita spending on medicines increased from 29.7 percent to 46.8 percent between 2005 and 2010 (here is the study). Medicines accounted for three-fourths of all out-of-pocket spending by the poor, while for the rich this accounted for over two-thirds of expenses.


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