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Providing low cost and quality drugs at Health Facilities, Rajasthan
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Subject Area="Health financing." Objective="Availability of low cost, quality drugs at Community Health Centres (CHC)."
Details for Reform Option "Providing low cost and quality drugs at Health Facilities, Rajasthan"

Background: The state budget for drugs is inadequate and hence poor and not so poor patients in India have to buy medicines and surgical items from chemist shops at exorbitant rates. A lot of patients, especially Below Poverty Level (BPL) families, find it difficult to pay for these medicines. This leads to inadequate treatment and dropouts or incurring debts by families. In addition, it is well know that pharmaceutical companies spend a lot of money on advertisements, giving incentives to medical professionals and also some percentage goes to stockiest and distributors to buy their drugs. Also, at times when the prescribed drug is not available in chemist shops, poor quality drugs are often sold to people. In order to provide good quality medicines and surgical items from renowned pharmaceutical companies at cheap rates, the idea of opening Lifeline fluid Stores was conceived, initially in 1996 in SMS Hospital, Jaipur, Rajasthan. The success of this initiative encouraged the government of Rajasthan to start such stores within the premises of district hospitals; community health centers (CHC) and even at primary health centers (PHC). Action An unused room near the CHC entrance was identified as a suitable area to house the Life Line Drug Store. The room had been constructed by a local donor for the use of attendants and relatives of patients but was redundant because there was an inn next to the CHC which provided accommodation. As per the government of Rajasthan, patients below the poverty line do not have to pay. The CHC then used the same process adopted by district hospitals in opening such drug stores. Firstly, a market survey was done to find the differential in pricing of drugs available in the chemist shops around Sadri. A technical committee was then formed to list out the essential drugs required and to list out the manufacturers who supplied drugs within the district and other parts of the State. They also got list of companies tat supplied drugs to various hospitals. For IV fluids it was decided to buy from companies that have high quality manufacturing. An open tender was then sent to pharmaceutical companies directly inviting them to supply medicines to the CHC. They negotiated with the company to reduce the cost of drugs and supply them directly to the CHC. It was decided that the modus operandi for procuring drugs from pharmaceutical companies or stockiest at CHC level needed to be different to that followed by bigger hospitals (where products were kept on consignment basis, stocks regularly replenished and payment made after 15 days) because the medicine turnover was low and stocks only need to be replenished once a month. In order to ensure a timely supply of drugs and surgical items and also to have reserve funds the pharmaceutical companies or stockiest were asked to submit INR. 5000 as a caution deposit which would be returned to the company once contract with them got dissolved. A retired grade I male nurse from the CHC who was trained pharmacist was selected to manage the drugstore. A list of drugs available at the store was prepared with the price list. Results The Life Line Drug Store in Sadri CHC became operational from July 2005. Patients are now able to buy medicines at about 30-54% below the market rates. In the near future, the cost of each drug available at the store will be displayed on a board outside the building. The price of drugs was fixed after adding 10-15% over the purchase cost to generate an income for the CHC. The purchase and availability of drugs is monitored by storing the information on the CHC computer. The opening of the drug store has made good quality drugs affordable to patients who have often travelled long distances to attend the CHC.

Cost The room for running the lifeline store was made available by donor. The other costs include purchase of 300-litre refrigerator, closed and open cupboard, table, chair, price list display board. Recurring costs include payments to the pharmacist, electricity bills and stationary which is met through the revenue collection from selling of the drugs and RMRS.
Place At all the CHCs in Rajasthan. Government is promoting starting such stores in primary health care units.
Time Frame Three months in this case.

Cost: Availability of drugs at low cost reduces the burden on poor patients. Location: Patients do not have to go out of the health facility to get drugs - especially during night time or urgency. Necessary drugs are available round the clock within hospital premises. Resource generation for the health facility: The drug store generates an additional 10-15% on top of the cost of the medicines.


Competition: Opposition from local chemists over the cost of drugs. Availability of drugs: Timely supply of drugs in smaller and more remote places is a problem. Regular flow of drugs and payment: Due to small size of the facility the requirement of medicines is not regular. Purchase of Drugs: Patients have the ability to purchase low cost drugs. In case there are more people below the poverty line then it becomes difficult for the store to run smoothly.


Space to house the pharmacy. Availability of full time pharmacist. Continuous supply of low cost quality drugs. System to monitor the functioning of the store.

Who needs to be consulted

Officer in charge of CHC and District hospital. Pharmaceutical companies and stockiest.



Yes, because they generate an income of 10 to 15 per cent above the price of the drugs i.e., they are self-sustaining and do not require additional funds to keep them functioning. However, as it is mandatory to provide free drugs to people below the poverty line, the issue of sustainability becomes difficult without government support.

Chances of Replication




Submitted By

Dr. Nandini Roy, HS-PROD Research Consultant, National Institute of Medical Statistics, October 2005.

Status Active
Reference Files
LLDS_SIHFW Excerpts.doc
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