While its bad news for some, its good news for certain others. As drug makers' margins are likely to take a hit with the recently mooted national pharma pricing policy, Gujarat's public drug procurement and distribution agency is in for some windfall gains.
As prices of 348 essential drugs have come under price control as per the new policy, it would benefit the drug procurement budget of Gujarat Medical Services Corporation (GMSC).
As the Group of Minister (GoM) recommended to fix the prices of 348 essential drugs at the weighted average price of brands with more than one per cent market share, major drugmakers in the country who have significant share of net sales coming from domestic formulations would take a hit in the margins.
Meanwhile, state level drug procurement and distribution agencies like the GMSC stand to benefit from the move.
"As prices of essential drugs would be fixed, when we float tenders for procurement, companies cannot quote higher prices, and this would definitely benefit our budget", said Rajesh Kishore, principal secreatary, health, government of Gujarat.
He added that the GMSC's this year's drug procurement budget is in excess of Rs 150 crore.
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The state government has been procuring drugs through open tender and distributing it amongst public hospitals through the Central Medical Stores Organisation (CMSO). Thanks to the initiative, drug was distributed through public health institutions for free.
Only recently the state government has granted autonomy to the CMSO in order to increase efficiency of the system. The autonomous body is called the GMSC.
H G Koshia, commissioner of the Gujarat Food and Drugs Control Administration (FDCA), said, "The Tamil Nadu Medical Services Corporation (TNMSC) is considered amongst one of the most efficient systems to procure and distribute drugs at an affordable cost. The GMSC has been formed along those lines."