Is the govt. doing enough for the Jan Aushadhi scheme?

Is the govt. doing enough for the Jan Aushadhi scheme?

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published Published on Apr 12, 2022   modified Modified on Apr 18, 2022

On Janaushadhi Diwas this year (i.e., March 7th, 2022), Prime Minister Shri Narendra Modi stated that the poor and the middle-class benefited from the 'Jan Aushadhi Kendras' that were set up to provide generic drugs at affordable prices. He said that the poor and the middle class saved around Rs.13,000 crore through these stores during the COVID-19 pandemic.

In the wake of COVID 19 crisis, the 'Bureau of Pharma PSUs of India' (BPPI) sold nearly 15 lakh face masks, 80 lakh tablets of hydroxychloroquine, and 100 lakh paracetamol tablets, which saved around Rs. 1,260 crores for the citizens, found an estimate by the Annual Report 2020-21 of the Department of Pharmaceuticals. The 29th report of the Parliamentary Standing Committee on Chemicals and Fertilizers, presented to the Lok Sabha on December 2, 2021, also confirmed that BPPI's efforts during the COVID-19 pandemic saved around Rs. 1,260 crores for the people. The BPPI sold roughly 10 lakh face masks and nearly 60 lakh tablets of hydroxychloroquine during the COVID-19 pandemic, said the Standing Committee report.

A newly released Department of Pharmaceuticals related Parliamentary Standing Committee report on the availability of medicines and medical device during the COVID-19 pandemic has mentioned that despite the need of the country, none of the Pharma Public Sector Undertakings (PSUs) under the Department of Pharmaceuticals were granted voluntary license to manufacture Remdesivir and other COVID essential drugs for public health supply. 

The Union Government revamped the ‘Jan Aushadhi Scheme’ in September 2015 as ‘Pradhan Mantri Jan Aushadhi Yojana’ (PMJAY). It was again renamed as the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP). It is essential to look at the actual spending by the Union Government on the PMBJP – a scheme that saved a lot of money for the people during the COVID-19 pandemic. The budgetary allocation (or actual spending) on the Jan Aushadhi scheme was clubbed together with other schemes under the subhead 'Others' in the Notes on Demands for Grants related to the Department of Pharmaceuticals until 2013-14. In the Notes on Demands for Grants, 2014-15 related to the Department of Pharmaceuticals, we get the allocation for Jan Aushadhi scheme separately for the first time. The actual spending on PMBJP was Rs.1.66 crore in FY 2012-13, which increased to Rs.15.2 crore in FY 2013-14 i.e., by 815.7 percent. There is no information available about the actual spending on PMBJP during FY 2014-15. 

Table 1: Expenditure on Jan Aushadhi Scheme in the Union Budget

Source:

Notes on Demands for Grants, 2014-15, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
Notes on Demands for Grants, 2015-16, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
Notes on Demands for Grants, 2017-18, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
Notes on Demands for Grants, 2018-19, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
Notes on Demands for Grants, 2019-20, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
Notes on Demands for Grants, 2020-21, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
Notes on Demands for Grants, 2021-22, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access

Notes on Demands for Grants, 2022-2023, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
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For 3 consecutive years (i.e., FY 2017-18, FY 2018-19, and FY 2019-20), the actual spendings on PMBJP were slashed (compared to the previous year). In the pandemic year 2020-21 (Actual), the spending on PMBJP was raised to Rs.65 crore from Rs.35.51 crore in FY 2019-20 (Actual). In the second pandemic year i.e., FY 2021-22 (Revised Estimate), the spending on PMBJP was Rs.68.5 crore. The budgetary allocation for 2022-23 is Rs. 72.5 crore only. The spending on PMBJP as a proportion of total spending on the Department of Pharmaceuticals (under the Ministry of Chemicals and Fertilizers) is the lowest in 2022-23 (Budget Estimate) as compared to that in the past years. Please see table-1. 

As per the latest available annual report of the Department of Pharmaceuticals, the PMBJP scheme has been approved for continuation with the financial outlay of Rs. 490 crore for the period from 2020-2021 to 2024-2025. The target is to open 10,500 PMBJP Kendras across the country by March 2025. However, no state-wise targets have been fixed under the scheme. It has also been decided to expand the product basket of PMBJP up to 2,000 medicines and 300 surgical items by March 2025.

Was PMBJP launched by the NDA Govt. at the Centre?

No, it wasn’t launched by the National Democratic Alliance (NDA) government at the Centre. In order to provide quality generic medicines at affordable prices to all, the PMBJP was launched by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers in November, 2008 i.e., when the United Progressive Alliance-1 (UPA-1) government ruled at the Centre. Under the PMBJP, dedicated outlets called Pradhan Mantri Bhartiya Janaushadhi Kendras (PMBJKs) are opened to provide generic medicines at affordable rates. As per the PMBJP portal (accessed on April 12, 2022), the product basket of PMBJP comprises 1,616 drugs and 250 surgical items. The scheme is implemented by a society registered under the Societies Registration Act i.e., Pharmaceuticals & Medical Devices Bureau of India (PMBI), erstwhile known as the Bureau of Pharma Public Sector Undertakings of India (BPPI). Aside from providing cheaper generic drugs to the citizens and reducing out-of-pocket health expenditure, another goal is to create employment by engaging entrepreneurs in opening of PMBJKs. The other two objectives of PMBJP are to popularize generic medicines among the masses and dispel the prevalent notion that low priced generic medicines are of inferior quality or are less effective, and to ensure easy availability of the menstrual health services to all women across India.

Problems with the PMBJP 

A Parliamentary Standing Committee, which reviewed the PMBJP, presented its report to the Lok Sabha on March 17th, 2021. It had recommended that in order to provide quality generic medicines at affordable rates to the poor and needy, the "budgetary grants to BPPI should be continuously given to fully meet its [Human Resources] (HR) and administrative costs till it augments its income up to the level of self-sustainability. Moreover, the expenditure on normal, additional and special incentives to the PMBJP outlets owners may also be borne by the Government till BPPI consolidates its profits to the level of self-sustainability to bear the cost of incentives under the Scheme."

Although CGHS, ESI, Railway Hospitals, PSU Hospitals, dispensaries in prisons, Army Hospitals, ECHS, and the State Government healthcare systems have very large budgets for the procurement of medicines for the beneficiaries, these institutions hardly buy Jan Aushadhi medicines. The total consumption of medicines in the country is nearly Rs. 1.5 lakh crore annually but the contribution of PMBJP was only Rs. 433.60 crore during 2019-20. The Department of Pharmaceuticals informed the Standing Committee chaired by Ms. Kanimozhi Karunanidhi that presently close to 1,800 to 2,000 people are purchasing medicines from a single PMBJP outlet in a month but it has not furnished any information regarding the average population covered by an outlet under the PMBJP.

The BPPI currently operates at 14 percent gross and 9 percent net margin on its total turnover. The Standing Committee had recommended that the number of PMBJKs to be opened and operated by the BPPI on its own should be at least one for 5 lakh population, at least 2 for 10 lakh population, at least 3 for 20 lakh population, and at least 5 for a population above 50 lakhs. The Standing Committee had advised that medicines/ injections, etc., which need to be stored at low temperatures, should be stored by wholesalers and retailers in refrigerator/ cool chambers and it should be ensured by the BPPI. 

Since the supply chain for the PMBJP is presently affected by delays, many PMBJKs are unable to maintain the stock of various generic medicines/ devices at their counters and as a result these outlets are becoming commercially non-viable as well as not able to fulfil their prime objective of providing quality generic medicines to the people. The Parliamentary Standing Committee had recommended that the BPPI should set up a chain of its own warehouses and distributors in such a way that the medicines ordered by the outlets are dispatched within a day and delivered within next two days all over the country even in remote and hilly areas. 

The Standing Committee had recommended that a committee of experts in the field, including the eminent medical practitioners, should be constituted to study the present basket of medicines and surgical instruments under the PMBJP and to suggest within three months a comprehensive basket of medicines and instruments covering all the therapeutic groups so as to offer all the medicines and surgical instruments to the people at affordable rates. 

An article published in the online magazine the-ken.com on November 25, 2021 too has found similar weaknesses in the PMBJP, which the Standing Committee had mentioned in its report. The article by Maitri Porecha states that the Jan Aushadhi scheme is ridden with low stock, low quality drugs, and an unviable business model. Titled ‘Jan Aushadhi pharmacies’ supply-quality headache that no generic can fix’, the article makes the following observations about the PMBJP: 

- For an entrepreneur or a pharmacist, who is running a Jan Aushadhi Kendra, the margin of profit is too low, which makes running the business unviable. A 2018 survey of 169 Jan Aushadhi Kendra owners (90 stores owned by entrepreneurs whereas 34 opened by unemployed pharmacists) that was conducted by Poona College of Pharmacy had found that 84.62 percent of them made a net profit of less than Rs.5,000 per month. 

- Although more stores are being opened in the recent years thanks to the official policy, the PMBJP is confronting the problems of mismanaged supply chain and inadequate quality control. 

- According to the latest available annual report of the Department of Pharmaceuticals, the Governing Council of the Bureau in its 34th meeting held on February 26, 2020 decided to change its name from 'Bureau of Pharma PSUs of India' (BPPI) to 'Pharmaceuticals & Medical Devices Bureau of India' (PMBI) and also to constitute a Pharma Bureau within. It is only the PMBI, which is allowed to supply generic drugs to the Jan Aushadhi stores. The stores are not allowed to get generic medicines from any alternative sources. Many of the generic medicines (supplied in the Jan Aushadhi scheme) are not made by manufacturers who comply with the Good Manufacturing Practices (GMP) [as laid out by the World Health Organization (WHO)]. 

- It has been observed frequently that the drugs demanded by patients are unavailable at the Jan Aushadhi Kendra due to supply chain mismanagement. This keeps the customers away. The stock of drugs demanded by customers is supplied to the pharmacies after several months. As a result, the daily sales of generic medicines from the Jan Aushadhi outlets are usually quite low.

[The reply to Unstarred Question no 1622 answered in the Lok Sabha on February 11, 2022 shows that in order to ensure availability of medicines, an Information Technology (IT) enabled End-to-End supply chain system with Point-of-Sale (POS) application for value added services has been implemented by PMBI to monitor end to end supply chain management system. All warehouses have SAP based inventory management system and the demand forecasting is done through the said system so as to place orders as per the desired inventory levels.

According to the Parliamentary Standing Committee on the review of PMBJP, which presented its report to the Lok Sabha on March 17th, 2021, the BPPI is facing many obstacles in timely procurement of medicines due the fault of suppliers. It has been observed that around 90 percent of suppliers of BPPI are from the Micro, Small and Medium Enterprises (MSMEs) sector who are unable to absorb the fluctuations in the price of raw materials, other factors and defaults in supply during the time of stress. In order to improve the situation, the BPPI has been working on a new procurement policy to encourage large scale manufacturers to participate in tenders so that supply can be further smoothened. The Parliamentary Standing Committee had recommended that due care may be taken while formulating new procurement policy for according balanced opportunities to both large scale manufacturers and the MSME sector. [A] certain percentage of medicines/ devices or some categories of medicines/ devices may be reserved for start-ups/ MSME sector so as to encourage them [to] flourish as per the goals of “Make in India” mission, said the Standing Committee report.]

- The warehouses under the PMBJP scheme are supposed to supply the generic medicines within 48 hours of getting the purchase order. However, they take a longer time (up to 10 days) to send the order to PMBJKs. 

[The reply to Unstarred Question 3444 answered in the Lok Sabha on December 17, 2021 indicates that on receipt of an order from a store owner, it generally takes about 6-7 days to supply medicines to a Jan Aushadhi Kendra in Maharashtra depending upon payment confirmation, logistics, distance and geographical locations, etc.] 

- The PMBI has incurred economic losses between 2015-16 and 2019-20 because the loans it extended to the pharmacists were not paid back.  

- As part of reform, the PMBI has now adopted payments in advance from the Jan Aushadhi stores instead of fixing the supply chain that causes delay in fulfilling customer demand. Due to the low profit margins of the Jan Aushadhi stores and closing down of credit windows for pharmacists, the government's target of setting up 10,500 such stores by 2025 may not be realized.

- Although new stores have been added in recent years, the high Trade Receivables Ratio could negatively affect cash flows. Please note that the Trade Receivable Ratio is the ratio of Net Credit Revenue from Operations (i.e., revenues generated by an entity that it allows sales to customers on credit, less all sales returns and sales allowances) to Average Trade Receivables.

- Many pharmacists have not been able to recover their capital cost, which they incurred due to the low profit margins associated with running the Jan Aushadhi stores.     

- For drug quality testing, samples collected at the Jan Aushadhi warehouses are sent to NABL-certified labs empanelled with PMBI instead of Drugs Controller General of India at Central Drugs Standard Control Organisation (CDSCO). Transparency is absent in the way drug quality is tested.   

- Although half of the budget for the Jan Aushadhi scheme has been set aside for incentives to the store owners in FY 2021-22, the incentive amount has not been fully utilised. Since incentives are linked to the amount of goods purchased by the pharmacists from the PMBI, one can observe delay in supply leading to a delay in providing incentives. 

- The number of stores owned by unemployed pharmacists, women entrepreneurs and eligible people from the marginalised communities is just 3 percent of the total Jan Aushadhi stores in India, according to a review of the PMBJP by the Standing Committee on Chemicals and Fertilizers.

[The reply to Starred Question no 332, answered in the Lok Sabha on March 25, 2022 reveals that in order to encourage receipt of applications from individual entrepreneurs/ private players for opening of PMBJK, the normal incentive under the scheme has been enhanced from Rs. 2.50 lakhs to Rs. 5.00 Lakh, subject to a ceiling of Rs. 15,000/- per month. On top of that, additional one-time incentive of Rs. 2.00 lakh has been introduced for Kendras opened in aspirational districts, Himalayan, Island territories and North-Eastern States or for the PMBJKs opened by women entrepreneurs, divyangs (handicapped), Scheduled Castes (SCs), and Scheduled Tribes (STs).]

- About 70 percent of the generic medicine sales as of 2019 took place in just 5 states i.e., Karnataka, Uttar Pradesh, Kerala, Tamil Nadu, and Gujarat. Only 155 stores operated at a threshold of Rs. 2 lakh worth of sales per month, noticed NITI Aayog.  

[The reply to Starred Question no 332, answered in the Lok Sabha on March 25, 2022, reveals that the PMBI recently invited applications for opening of PMBJKs in 265 districts of various states where the coverage of PMBJKs is relatively less.]

- Doctors are often reluctant about prescribing generic medicines. That too is a reason behind low demand for generic drugs from the Jan Aushadhi stores.     

The 29th report of the Parliamentary Standing Committee on Chemicals and Fertilizers, presented to the Lok Sabha on December 2, 2021 observed that while the BPPI kept adequate stocks of the medicines, which are currently under demand, such as face masks, hand sanitizers, hydroxychloroquine, paracetamol and azithromycin, etc., oximeters, which were in high demand during the peak of pandemic, are not in the basket of medical devices under PMBJP.

Current status of PMBJP

The Inclusive Media for Change staff has put together the following facts about the PMBJP from various documents related to the Parliament of India:  

Table 2: Progress made by PMBJP scheme

Source: Annual Report 2020-21, Department of Pharmaceuticals, Ministry of Chemicals & Fertilizers, please click here to access  

* Starred Question no 332, Answered in the Lok Sabha on March 25, 2022, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
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- The total number of PMBJKs has increased from only 86 in 2014-15 to 7,018 in 2020-21 (as on January 05, 2021), and further to 8,689.00 in 2021-22 (as on February 28, 2022). The total sales of Jan Aushadhis at maximum retail price (M.R.P.) value went up from Rs.7.29 crore to Rs.473.7 crore between 2014-15 and 2020-21 (as on January 05, 2021). Kindly look at table-2. 

- Till February 28th 2022, nearly 8,689 PMBJKs have been opened covering all the districts of India. Out of 8,689 PMBJKs, roughly 1,064 kendras have been opened in government premises, while the remaining 7,625 PMBJKs have been opened by the private players, i.e., individuals/ societies/ NGOs/ institutions, etc. As said earlier, a target of opening 10,500 PMBJP Kendras by March 2025 has been fixed by the Union Government. 

Note: *Medicines are directly supplied to the administration of Union Territory of Lakshwadeep

Source: Unstarred Question no. 3283, Answered on March 16th, 2021, Lok Sabha, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
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- Nearly 433 PMBJKs were closed down as on March 10, 2021. Most number of PMBJKs were shut down in Gujarat (105), followed by Uttar Pradesh (66), and Rajasthan (38). Please see chart-1. 

- The generic medicines sold under the PMBJP scheme are priced on the principle of a maximum of 50 percent of the average price of the top three branded medicines. So, the price of Jan Aushadhi medicines is cheaper by at least 50 percent and in some cases by 80 percent to 90 percent of the market price of the branded medicines

- Kindly click here to access the list of districts in various states/ UTs where the PMBJKs were functional as on December 12, 2021. 

Source: Unstarred Question 3668, Answered in the Lok Sabha on August 10, 2021, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access
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- As on August 04, 2021, about 11.74 lakh users were connected with the Jan Aushadhi Sugam App. The users of the App are able to find details about name and price of medicines, comparison of prices between generic drugs and their equivalent branded drugs, location of nearby PMBJKs, quality assurance and transaction details, etc. Kindly consult chart-2. 

It is to be noted that when the Inclusive Media for Change staff tried to access the location of functional PMBJP Kendras in Uttar Pradesh during the first week of April 2022, it confronted server error time and again. Please click here to access the screenshot.

References:

Union Budget (various years), Ministry of Finance, please click here to access

31st report: Availability of Medicines and Medical Devices for COVID Management, Standing Committee on Chemicals and Fertilizers (2021-22), Department of Pharmaceuticals, Presented to Lok Sabha on March 21, 2022/ Laid in Rajya Sabha on March 21, 2022, please click here to access

English rendering of PM’s address at the interaction with beneficiaries of Jan Aushadhi Yojana, Press Information Bureau, Prime Minister's Office, March 7, 2022, please click here and here to access  

Action Taken by the Government on the Observations/ Recommendations of the Committee contained in their Seventeenth Report (Seventeenth Lok Sabha) on ‘Review of Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP)', 29th Report of Standing Committee on Chemicals and Fertilizers (2021-22), Department of Pharmaceuticals, Presented to Lok Sabha on 02 December, 2021/ Laid in Rajya Sabha on 02 December, 2021, please click here to access  

Review of Pradhan Mantri Bharatiya Janaushadhi Pariyojana (PMBJP), 17th Report of Standing Committee on Chemicals and Fertilizers (2020-21), Department of Pharmaceuticals, Presented to Lok Sabha on 17th March, 2021/ Laid in Rajya Sabha on 17th March, 2021, please click here to access 

Annual Report 2020-21, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here and here to access 

Unstarred Question no 3801, Answered in the Lok Sabha on March 25, 2022, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access

Starred Question no 332, Answered in the Lok Sabha on March 25, 2022, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access 

Unstarred Question no 1622, Answered in the Lok Sabha on February 11, 2022, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access

Unstarred Question 3444, Answered in the Lok Sabha on December 17, 2021, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access

Unstarred Question 3372, Answered in the Lok Sabha on December 17, 2021, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access 

Unstarred Question 3293, Answered in the Lok Sabha on December 17, 2021, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access

Unstarred Question 3668, Answered in the Lok Sabha on August 10, 2021, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access

Unstarred Question no. 3283, Answered in the Lok Sabha on March 16th, 2021, Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, please click here to access

Poor, Middle Class Benefitted From The 'Jan Aushadhi Kendras': PM Modi, PTI/ NDTV.com, 7 March, 2022, please click here to access  

Jan Aushadhi Yojana came as a silent revolution in India: Mansukh Mandaviya, PTI/ The Hindu, 7 March, 2022, please click here to access  

Booster shot elusive -Chandrakant Lahariya, The Tribune, 3 February, 2022, please click here to access  

Jan Aushadhi pharmacies’ supply-quality headache that no generic can fix -Maitri Porecha, the-ken.com, November 25, 2021, please click here to access

Now, sanitary pads for Rs 1 at Jan Aushadhis -Sushmi Dey, The Times of India, 28 August, 2019, please click here to access  

Modi govt’s flagship drugs scheme has worked well only in five states -Himani Chandna, ThePrint.in, July 25, 2019, please click here to access

Milked: Even medicines -GS Mudur, The Telegraph, 7 August, 2018, please click here to access  

Jan Aushadhi: Not yet a generic choice -PT Jyothi Datta, The Hindu Business Line, 23 October, 2017, please click here to access  

State to provide cheaper generic drugs -Sharad Vyas, The Hindu, 17 May, 2016, please click here to access  

There is a cure -Pragya Singh, Outlook Magazine, 27 July, 2009, please click here to access  
 

Image Courtesy: Press Information Bureau, Ministry of Chemicals and Fertilizers, please click here to access  



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