NEW DELHI - India is moving ahead with ambitious plans to spend nearly US$5 billion (S$6.3 billion) to supply free drugs to patients at public hospitals - bringing the nation closer to a more inclusive health care system.
The "game-changing" scheme, in the words of one top Indian health ministry official Friday, is part of the government's most recent five-year spending programme (2012-17) and is expected to start up in October.
The centre-left Congress government will pay 200 billion rupees or US$3.61 billion while India's 29 states will be asked to contribute a further 66 billion rupees or $2 billion for the plan.
"This new initiative, if approved ... would be a giant step in vastly expanding the access to medicines," Ministry of Health joint secretary Arun Panda said in an emailed statement.
The five-year plan is set for formal approval next month but the drug scheme has already received its first allocation of 10 billion rupees from the planning commission for 2012-13.
It should be up and running by the time the country goes to the polls in 2014.
Prime Minister Manmohan Singh, a champion of the so-called "free-medicines-for-all" scheme", has already asked the health ministry to set up a central procurement agency to obtain the drugs in bulk.
Along with patients for whom medical costs can be a crippling burden, the big winners from the scheme will be India's already booming generic drug companies that include giants Ranbaxy, Dr Reddy's and Cipla.
The programme has excluded international pharmaceutical giants from the picture as it only will offer cheaper generic versions of branded drugs.
The decision may disappoint big pharma which is looking to emerging market giants such as India to boost sales, but is in line with government policy of using copycat medicines which cost a fraction of branded drugs.
Right now some 78 per cent of health expenditure comes from Indians' own pockets - one of the highest rates in the world - and 72 per cent of that spending goes on drugs from basic pain-killers to intravenous fluids.