[india-drug] Affordability of medicines in India

["Reji K Joseph" <rejikjoseph55@yahoo.com>]

Affordability of medicines in India (1)
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Hello,

The article 'Ignoring indigenous drug R&D' by Kiran Mazumdar Shah in Economic times (13th Sept 2006) has challenged the rationale of drug price control in India. But the major thrust of her argument that affordability of medicines is not a major issue because people in India have to spend only less than 20% of health expenses on drugs is based on false statistics. The 55th round of National Sample Survey show that 70% of out of pocket (OOP) health expenses in urban areas and 77% of OOP health expenses in rural areas are on drugs alone. OOP expenditure accounts for 86% of total health expenditure in India. Moreover, dividing population into different income groups show that the share of expenses on drugs is much higher in lower income groups. Drugs account for 85% and 86% of health expenditure for the bottom 20% of the population in terms of consumer expenditure (groups based on consumer expenditure can be treated as income groups because the marginal propensity to consume increases with income). Further, the NSS Morbidity surveys show that the number of people not taking treatment due to financial constraints is on the rise. In 1995-96, 21% of those did not take treatment in urban areas and 24% of those did not take treatment in rural areas was on account of financial constraints. And the percentage of people not taking treatment due to this reason in rural areas went up to 28% by 2004. The whole story is that there are increasing number of people who cannot afford any treatment when they are ill and medicine is the single item that  accounts for nearly four fifth of the health expenses. Can we still say affordability of medicine is not an issue in India?

Reji K Joseph
Centre for Development and Human Rights
Q1-A, Hauz Khas Enclave
New Delhi - 110016
India
email:rejikjoseph55@yahoo.com
Phone: +91 11 26518909 (Office)
       +91 9871566918 (Mobile)