Pradhan Mantri Bharatiya Janaushadhi Pariyojana (PMBJP)
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Jan Aushadhi scheme provides quality generic medicines, consumables and a few medical devices at very affordable prices. It has been redesigned and vastly expanded to benefit a larger group of people. It creates retail opportunities for PSU sites looking to diversify sales, private entrepreneurs and NGOs. For rapid establishment of distribution and improved viability, incentive were increased as well as the basket of drugs and diseases covered. People have complained about gaps in coverage e.g. cancer drugs, and these could be dealt with soon.
☀ Range of products - All types of diseases were covered, number of medicines expanded manifold from 100 to 630, and consumables and devices added
☀ Testing - Batch testing by accredited labs was incorporated
☀ Private sector involvement - WHO certified private pharma can become suppliers
☀ Incentives - Higher margins were allowed to distributors & retailers. Higher grants were given to establish new outlets
☀ Distribution - JA shop numbers have scaled up from 80 to 2800 'till date. PSU channels like railway stations & petrol shops, are being added for further rapid expansion. PSUs will need to hire or lease premises to qualified pharmacists.
Revenues of JA are small (Rs.74cr in 6 months of 2017/18) though growing extremely fast. National coverage is still limited. When campaign for JA stores was started in Assam, state govt agreed to open them in all govt hospitals. TN & Karnataka already have a low-cost state sponsored retail scheme in place. Yet 200 stores will be opened in KA. Kerala is very interested in JA stores (a change of stance).
Hot press 1/18: Govt has approved 36,000 new JA stores for private entrepreneurs (B Pharma/ D Pharma qualified). There are 3050 JA stores & 652 generic medicines presently. Factors driving sales in JA stores: Govt will make generic drugs compulsory & drugs sold in JA stores cost 90+% less than equivalent branded generics.
The story of Jan Aushadhi into the future
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JA stores don't sell patented or branded drugs, and stock just 630 medicines and 150 consumables. Yet these stores are gaining popularity among lower and middle classes and retirees. JA scheme has picked up pace in the last 15 months. Shop openings are racing towards the 3000 stores target to cover every tehsil or admin block. Govt has now cleared opening of stores at railway stations and petrol pumps. Maybe domestic pharma will start feeling the squeeze, just when exports have become volatile.
❦ "Jan Aushadi can be as destructive as Patanjali. All it needs is for pharma to stop bribing doctors and doctors to stop promoting branded products." ❦
PM Modi has spoken about profiteering and indeed action was taken this year on cardiac stents and knee implants. Jan Aushadhi scheme sets out to tackle the menace of overpriced drugs and consumables. A small scale trial in 2013 didn't elicit a very good response. Govt felt Jan Aushadhi could be more impactful if it covered more diseases and more people across India.
❦ "Govt could have gone national immediately via e-pharmacy. Instead it chose the route of opening stores in a phased manner and gradually building the basket of medicines." ❦
Govt decided to ramp up JA stores to 3000 by 2017, but this is too slow to make ‘affordable healthcare for all’ happen even by next decade. Looking ahead there may be 10,000 stores by 2019, but this is just 1% of chemists already in operation. Subsidy is a barrier to new store openings. Sustainability in the long-term means doing without subsidy and adopting least-cost methods of distribution.
An industry report states that e-Jan Aushadhi portal should be set up. It reasons that Digital India will provide national internet access to all citizens, and large efficiency gains in distribution will lead to much cheaper prices. Just targeting cardiac, diabetes and blood pressure drugs will bring 200m people into the scheme, provided medicines are delivered by e-Jan Aushadhi.
Entire range of medications can be added over time, through continued efforts of BPPI -- a central PSU. But distribution should be left to the market-place, accessible through multiple channels. JA stores have a role if well-sited like in hospitals & main shopping places. But e-commerce players also have vital logistics capability to offer, being very cost-effective, very reliable and already present across the country. Policy change in favour of unbranded generic prescriptions and e-Jan Aushadhi can bring rapid structural change!
My Thoughts
------------------
If Government E-marketplace portal is used, it will create huge volumes for the portal, though good logistics must be established for it. Secondly e-pharmacy can use pharmacists more efficiently because they work centrally and medicines can be put in temper-proof packaging. Thirdly e-pharmacy can sell to JA stores, local delivery sites or post directly to the public. JA stores in or near hospitals is a good idea. If operations are scaled up, they will be very cost-effective and highly accessible.
Jan Aushadhi scheme provides quality generic medicines, consumables and a few medical devices at very affordable prices. It has been redesigned and vastly expanded to benefit a larger group of people. It creates retail opportunities for PSU sites looking to diversify sales, private entrepreneurs and NGOs. For rapid establishment of distribution and improved viability, incentive were increased as well as the basket of drugs and diseases covered. People have complained about gaps in coverage e.g. cancer drugs, and these could be dealt with soon.
☀ Range of products - All types of diseases were covered, number of medicines expanded manifold from 100 to 630, and consumables and devices added
☀ Testing - Batch testing by accredited labs was incorporated
☀ Private sector involvement - WHO certified private pharma can become suppliers
☀ Incentives - Higher margins were allowed to distributors & retailers. Higher grants were given to establish new outlets
☀ Distribution - JA shop numbers have scaled up from 80 to 2800 'till date. PSU channels like railway stations & petrol shops, are being added for further rapid expansion. PSUs will need to hire or lease premises to qualified pharmacists.
Revenues of JA are small (Rs.74cr in 6 months of 2017/18) though growing extremely fast. National coverage is still limited. When campaign for JA stores was started in Assam, state govt agreed to open them in all govt hospitals. TN & Karnataka already have a low-cost state sponsored retail scheme in place. Yet 200 stores will be opened in KA. Kerala is very interested in JA stores (a change of stance).
Hot press 1/18: Govt has approved 36,000 new JA stores for private entrepreneurs (B Pharma/ D Pharma qualified). There are 3050 JA stores & 652 generic medicines presently. Factors driving sales in JA stores: Govt will make generic drugs compulsory & drugs sold in JA stores cost 90+% less than equivalent branded generics.
The story of Jan Aushadhi into the future
JA stores don't sell patented or branded drugs, and stock just 630 medicines and 150 consumables. Yet these stores are gaining popularity among lower and middle classes and retirees. JA scheme has picked up pace in the last 15 months. Shop openings are racing towards the 3000 stores target to cover every tehsil or admin block. Govt has now cleared opening of stores at railway stations and petrol pumps. Maybe domestic pharma will start feeling the squeeze, just when exports have become volatile.
❦ "Jan Aushadi can be as destructive as Patanjali. All it needs is for pharma to stop bribing doctors and doctors to stop promoting branded products." ❦
PM Modi has spoken about profiteering and indeed action was taken this year on cardiac stents and knee implants. Jan Aushadhi scheme sets out to tackle the menace of overpriced drugs and consumables. A small scale trial in 2013 didn't elicit a very good response. Govt felt Jan Aushadhi could be more impactful if it covered more diseases and more people across India.
❦ "Govt could have gone national immediately via e-pharmacy. Instead it chose the route of opening stores in a phased manner and gradually building the basket of medicines." ❦
Govt decided to ramp up JA stores to 3000 by 2017, but this is too slow to make ‘affordable healthcare for all’ happen even by next decade. Looking ahead there may be 10,000 stores by 2019, but this is just 1% of chemists already in operation. Subsidy is a barrier to new store openings. Sustainability in the long-term means doing without subsidy and adopting least-cost methods of distribution.
An industry report states that e-Jan Aushadhi portal should be set up. It reasons that Digital India will provide national internet access to all citizens, and large efficiency gains in distribution will lead to much cheaper prices. Just targeting cardiac, diabetes and blood pressure drugs will bring 200m people into the scheme, provided medicines are delivered by e-Jan Aushadhi.
Entire range of medications can be added over time, through continued efforts of BPPI -- a central PSU. But distribution should be left to the market-place, accessible through multiple channels. JA stores have a role if well-sited like in hospitals & main shopping places. But e-commerce players also have vital logistics capability to offer, being very cost-effective, very reliable and already present across the country. Policy change in favour of unbranded generic prescriptions and e-Jan Aushadhi can bring rapid structural change!
My Thoughts
If Government E-marketplace portal is used, it will create huge volumes for the portal, though good logistics must be established for it. Secondly e-pharmacy can use pharmacists more efficiently because they work centrally and medicines can be put in temper-proof packaging. Thirdly e-pharmacy can sell to JA stores, local delivery sites or post directly to the public. JA stores in or near hospitals is a good idea. If operations are scaled up, they will be very cost-effective and highly accessible.
3
1
- Patanjali moment for Indian pharma industry
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❦ "Jan Aushadi can have the same destructive impact as Patanjali because medicine are priced 50 to 90% lower than those prescribed by doctors. Inducements given for prescribing branded products will also go .... hurting doctors & pharma firms alike." ❦
JA stores don't sell patented or branded drugs, and stock just 630 medicines and 150 consumables. Yet these stores are gaining popularity among lower and middle classes and retirees. JA scheme has picked up pace in the last 15 months. Shop openings are racing towards the 3000 stores target to cover every tehsil or admin block. Govt has now cleared opening of stores at railway stations and petrol pumps. Domestic pharma is expected to suffer cuts in profits and others will be increasingly exposed to volatile export earnings.
FULL ARTICLE
The fast-moving consumer goods (FMCG) segment was shaken to the core when Patanjali, a company promoted by a yoga guru Baba Ramdev, introduced low-priced products in the market. In a price conscious market like India, the price arbitrage was too much for many consumers to shift loyalty.
The same price differentials are now taking place in the Indian pharmaceutical market. The Indian government is keen on reducing the cost of medicines as well as medical treatment. Government’s intent was clear as it undertook its step to cut prices of stent and knee surgery. The medical fraternity clearly did not like the government’s interference which would definitely have put the interfered with their practice of charging obnoxious prices.
The medical fraternity is taking a hit on various fronts. In particular, ‘incentives’ that pharmaceutical companies were giving them for prescribing their products will stop, if the government has its way. There is a Patanjali moment underway in the Indian pharmaceutical industry that is likely hurting pharmaceutical companies and everyone linked to it.
The government had revived a scheme launched in 2008 and named it Jan Aushadi which promotes the use of quality generic medicine. Initial teething troubles on account of supply-side issues took many months to overcome. But over the last 15 months, the scheme has picked up speed.
CLSA, which introduced Patanjali to the finance world through its report on the inroads that the company was making, has come out with a report on Jan Aushadi. The report points out the increasing acceptance of Jan Aushadi in cities like Mumbai.
Under the scheme, 2,091 stores in 400 districts have already been opened with a target of opening 3,000 stores by end of 2017 in order to cover every tehsil (an administrative block). Around 1,700 stores have been opened in the last 15 months alone. The scheme will gather further momentum as the government has cleared opening of stores at railway stations and petrol pumps.
CLSA in its reports mentions about its visit to a store in Mumbai which has seen its business growth and is currently handling 300 prescriptions every day. Demand for drugs for chronic illnesses (such as blood pressure and diabetes) are in greater demand than those for acute illnesses, says the report. The lower/middle-income group and the retired are its biggest patrons (with 60 percent repeat customers).
Jan Aushadhi has a list of 600 medicines (for chronic and acute illnesses) and 150 consumables. Patented drugs and branded generics are not sold in these stores. For blood pressure and diabetes, it covers the first line of therapies.
Indian pharmaceutical companies are already under pressure from declining sales in export markets, thanks to the aggressive stance taken by US regulatory authorities and structural changes in the US. Domestic markets were supposed to provide the cushion from volatile export markets, but this will be under threat if Jan Aushadi picks up.
Companies who continue to get higher revenue and profit from domestic markets will be the most vulnerable; among those, the ones who cater to chronic illness and diabetes will take the first blow.
CLSA’s study shows that in the case of IPCA, domestic sales accounts for 44 percent of overall revenue and 65 percent of its operating profit. Cipla with 38 percent of revenue coming from the domestic market and 56 percent of its operating profit are the top two Indian pharmaceutical companies with high domestic exposure.
In terms of therapy, chronic products account for nearly 75 percent of Biocon’s domestic sales and 60 percent of Torrent’s sale.
While the pharmaceutical companies might be affected on account of lower revenue and lower profits the consumers will get some relief, not from the pain but from the cost of bearing it.
REPLY Nov 12, 2017 - Jan Aushadhi: Scaling Up Through E-Pharmacy Routes
❦ "Govt could have gone national immediately via e-pharmacy. Instead it chose the slow route of opening stores in a phased manner and gradually building the basket of medicines." ❦
Present state of Jan Aushadhi--------------------------------------------------
PM Modi has spoken about profiteering and indeed action was taken this year on cardiac stents and knee implants. Jan Aushadhi scheme sets out to tackle the menace of overpriced drugs and consumables. Trial in 2013 with 90 JA stores and 85 medicines, didn't elicit an overwhelming response. It was felt that Jan Aushadhi could be more impactful if it covered more diseases and more people across India. *
*Govt decided to ramp up stores to 3000 by 2017, but this is too slow to make ‘affordable healthcare for all’ happen even by the next decade. Looking ahead there may be 10,000 stores by 2019. This is just 1% of chemists already in operation. Subsidy is a significant barrier to new store openings, as Rs.1500cr is needed for 100,000 stores. Sustainability in the long-term means doing without subsidy and adopting least-cost methods of distribution.
Reference:
http://janaushadhi.gov.in/data/new_businessplan.pdf
Case for E-pharmacy----------------------------------
An industry report states that e-Jan Aushadhi portal should be set up. It reasons that `Digital India will provide national access to all citizens, and large efficiency gains in distribution will lead to much cheaper prices. Just targeting cardiac, diabetes and blood pressure drugs will bring 200m people into the scheme, provided medicines are delivered by e-Jan Aushadhi. Entire range of medications can be added over time, as it is now, through BPPI -- a central PSU--procurements.
Distribution should be left to the market-place, accessible through multiple channels. JA stores have a place if well sited like in hospitals & main shopping places. JA shops an be sponsored in backward regions as part of govt outreach. But e-commerce players also have vital logistics capability to offer, being very cost-effective, reliable and already present across the country.
Policy change in favour of unbranded prescriptions and e-Jan Aushadhi can bring rapid structural change.
REPLY Nov 13, 2017
Janaushadhi project gets clearance to set up 36,000 stores !!
There are 3031 JA stores operating till 5/1/2018. Govt has agreed to fund 36,000 new JA stores. It has signed MOUs with States and NGOs on numbers for each state. Its an opportunity for private entrepreneurs to run these stores under BPPI rules.
✵ State-wise breakdown: UP (472 stores), Kerala (316), Delhi (41), etc
✵ BPPI under Dt of Pharma implements Jan Aushadhi scheme. It is framing rules, eg
▬ Entrepreneurs should be B Pharm or D Pharma. They can't be registered medical practitioners
▬ Billing and all sales will be done through BPPI software
JA stores makes sound business sense------------------------------------------------------------
✵ 652 medicines, 150 surgical devices and consumables
▬ common ailments like diabetes, cardiac, GI and cancer
▬ Up to 96% cheaper than branded generics. eg Gemcitabine vial injection (bladder cancer) drops from Rs6412 each to Rs631 or 90% saving.
✵ Govt's push for compulsory generic drugs will be a huge boost for revenues
REPLY Jan 8, 2018
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