Expanding access to essential medication
Taking a page from the banking industry to create extension services for drug sales
According to WHO, 449-649 million people in India lack regular access to essential medicines. I have been thinking about this recently since I am involved with a colleague in a study on Drug Accessibility and Affordability—the two components of achieving access being physical access and affordability.
As for physical access, drugs are dispensed through retail pharmacies (80 percent), hospital-based pharmacies (12 percent), government pharmacies (5 percent), medical professionals (3 percent) and the rest through non government organization run programs, according to research carried out a few years ago by Kotak Institutional Equity Research. Critically, most of these points of sale for drugs are located in urban and semi urban settings – while most people in India, some 70%, live in rural areas.
As for affordability, the supply chain starts, of course with R&D, and winds its way down to the tiny shops where most people buy their medication, which each chink in the supply chain adding costs. The choice of which medication to take is actually not made even by the consumer but by the prescriber or in some cases by the pharmacist. The consumer is the most ignored stakeholder in the entire supply chain.
Are there lessons to be learned about expanding access from the banking industry? One of the strategies being implemented in the financial inclusion initiative is introduction of banking business correspondents. Correspondents are agents of the bank who try to extend banking services to under-served populations. According to the Reserve Bank of India, the central bank, correspondents are often groups:
“Banks may use intermediaries, such as, NGOs/ Farmers' Clubs, cooperatives, community based organisations, IT enabled rural outlets of corporate entities, Post Offices, insurance agents… for providing facilitation services. Such services may include (i) identification of borrowers and fitment of activities; (ii) collection and preliminary processing of loan applications including verification of primary information/data; (iii) creating awareness about savings and other products and education and advice on managing money and debt counseling… [etc.]”
Likewise I think we should experiment with having medication or Drug Correspondents (DC). Identification of DCs should be preceded by mapping of areas under-served by pharmaceutical services. Similarly, Tanzania Food and Drug Authority authorized, duka la dawa baridi (convenience store) to sell non-prescription drugs. These stores are dot the country where licensed pharmacies are scarce. To regulate them strictly Tanzanian government converted them into government authorized drug dispensing outlets.
Big pharma companies are also working on a rural business initiative, which apart from increasing awareness includes development of low cost rural brands. This is because in India you are not allowed to differentially price a brand across the country.
India’s pharma industry is among the world’s largest, and there is potential to reach all Indian consumers effectively. The overall health market size is estimated to be more than $50 billion. The India exports $11 billion in generics in a global pharma market size of about $82 billion. Sales through the private and not for profit sector accounts for around 94%. Government sales account for just 6% in India.
The government’s National Pharmaceutical Policy for 2002 has noble intentions: It focuses on ensuring availability, affordability, quality in production and distribution, building internal capacities, promoting research and development and creating an enabling environment to attract investments.
Yet the reality is worth focusing in on. For acute conditions medication is hard to come by, and for chronic conditions patients must come several times or continually to purchase medicines, exceedingly difficult for rural people.
Promising models exist both in the banking sector and in health sector in other countries. It can be possible to expand access -- physical and financial -- of essential medicine to all people in India.