India's government has announced plans for a major expansion of the existing public health insurance scheme and its programme of discounted drugs in special pharmacies.
IHS Life Sciences perspective | |
Implications | The expansion of the health insurance scheme is expected to provide free health insurance to 100 million low-income families. |
Outlook | The expansion of the health insurance scheme is expected to be introduced in 2017/18, with the details of what will be offered under it yet to be revealed. In any case, it will result in an increase in demand and will boost the Indian pharmaceutical market. |
Plans announced for large expansion of public health insurance scheme
India's Ministry of Health (MoH) has revealed plans to implement an expanded version of the existing public health insurance scheme, Rashtriya Swasthya Bima Yojana (RSBY), to cover 100 million families, or approximately 500 million citizens, reports Indian Express. The responsibility for the administration of the RSBY scheme was transferred last year to the MoH from the Ministry of Labour, which founded it in 2008, and, as the source reports, the present planned expansion would be the first step to the implementation of a full, universal health insurance system. However, the source emphasises that the final details of the scheme, and its eventual name, have not been decided yet.
The choice of beneficiaries for the scheme would be based on "deprivations" as well as income, with the source reporting that more than just below-poverty-line (BPL) families would be included. The implementation will be undertaken by individual states and their governments will decide on the basket of services that will be included in the health insurance scheme.
A senior MoH official is reported by the source as saying that the ministry plans an IT-supported implementation platform to accompany the health insurance scheme, and that the ministry is in the process of deciding exactly what will be covered. The official stated that each individual state would be able to add to a basic level of coverage, and that an important element would be screening for common conditions such as hypertension, diabetes, and certain common cancers. According to Indian Express, sources in the MoH have revealed that the new restructured RSBY would probably be implemented by the financial year 2017/18, possibly under a new name.
According to the Hindustan Times, as well as the 100 million households set to receive free health and life insurance, the proposed new scheme will also make provision for the remaining households to be given annual health and life insurance cover of INR50,000 (USD735) and INR200,000, respectively, as part of the Jeevan Jyoti Yojana scheme launched last year. Premiums for these would amount to INR330 for health insurance and INR670 for life insurance. The period for implementation of cover for these households would be the same as for the BPL households.
Major expansion of programme to provide cheaper essential medicines
Separately, the Indian government has announced a major expansion of its Jan Aushadhi programme aimed at ensuring access to cheap generic medicines. The Economic Times reports that the expanded programme will offer 439 life-saving medicines, including cancer and cardiovascular medicines, and 250 medical devices, with prices discounted by 40–50%.
Furthermore, the expansion will involve the opening of 300 new Jan Aushadhi pharmacies across India by March 2016, and a further 3,000 by 2017.
The source quotes a government official stating that the expansion of the programme was due to the government's concern about "exorbitantly priced" medicines used to treat critical diseases such as diabetes, cancer, and cardiovascular conditions. The official said that the programme would allow for a reduction in the prices of essential medicines, without the need to impose direct price regulation, adding that tenders have already been called in connection with the scheme.
Outlook and implications
Under the RSBY scheme, 36.3 million families are provided with INR30,000 cover for hospitalisations due to a range of conditions, as well as being covered for pre-existing ailments. The expansion of this scheme, as well as the planned provision of health insurance to families above the poverty line, implies a considerable increase in the number of people able to access treatment, and a potentially substantial rise in demand for pharmaceuticals. The extent of this potential increase will become clear when the government reveals more details and states start to develop their own associated plans.
The Jan Aushadhi programme has been running since 2008, involving state-controlled generics-only pharmacies offering essential medicines at highly discounted prices. Over the years, new medicines have been added to the programme, with the addition of 175 announced in November 2015 (see India: 20 November 2015: Indian government adds 175 drugs to Jan Aushadhi formulary). Drugs sold in Jan Aushadhi pharmacies are unbranded generics, which can be procured at significantly cheaper prices than the branded generics that dominate India's broader pharmaceutical market.