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The cost of production of most of the drugs is many times less than the retail price (MRP) printed on it. Generic medicines are not new types of medicines, these are abundantly available everywhere in India. These are drugs which have come out of the patent duration of 20 years and now, apart from the original innovator company, any other pharmaceutical manufacturer can produce this salt after getting due permission from the drug control authorities. In fact, 97% of the drugs in the Indian market are generics (or branded generics). But even these are sold at high prices, because they are prescribed by doctors and supplied by manufacturers under brand names. Branding limits the choice for the patient, kills competition and creates artificial monopoly, and enables the manufacturers to charge a very high MRP.

The doctor plays a key role not only in prescribing drugs by generic name but also in convincing the patients that these drugs are 100% identical to commonly used brands in quality, ie, they have the same identity, purity, strength, bioequivalence and effectiveness, provided the doctor himself is convinced of these facts. Even when you open a low-cost generic drug shop the patient won’t get the price benefit unless the doctor is inclined to help him.

The patient must also be made to understand that although he is getting a particular drug at a very low price compared to the printed MRP or his doctor’s favourite brand, it is in no way different or inferior. It will have the same effect.

Steps To Open & Operate A Fair Price Generic Medicine Shop

The hospital management or the local self-government or NGO or any other private entity should discuss the issue, evolve a consensus, take doctors and staff into confidence and adopt a resolution to provide low-cost drugs to the citizens.

Take from the doctors the list of drugs which are commonly prescribed by their generic/salt name (start with 100-200 drugs which are not available in hospital supply). Let doctors also decide the name of 15-20 companies which they consider as “good”.

Invite open tender by generic name or take drug lists of reputed drug companies (which doctors have indicated) from the authorised local stockists (the wholesalers) of these companies. Apart from the offer price the stockist lists usually also shows MRP which may be 5 to 10 times the offer price. To avoid misbranded or spurious drugs always get these from a stockist authorised by the company. Also insist for the authorisation certificate, a valid bill/cash memo and certificate of analysis (test report) for every batch of each drug. This will ensure quality standards.

Compare the prices of different companies and prepare a comparative statement. Choose the L1 (best buy) and purchase these generic drugs.

A fair price generic drug store can be opened in any suitable vacant room near/in the hospital. A registered pharmacist is required to run the store.

The licence for the shop is to be obtained from the office of the local drug control authority, for a licence fee of about Rs 3,000 (one time for 5 years).

The generic drugs received from the authorised suppliers can be sold at 10-20% profit margin which is charged at the purchase price, which will help to meet day-to-day expenses and the remuneration of the pharmacist, and no external financial help is required.

A computerised list of the available generic drugs may be displayed prominently outside the shop. Preferably the list should show the rate at which the drug is actually sold (CP+10%). You may also compare the selling price with the MRP printed on the drug, which will educate the patients about drug prices.

Similarly, surgical items like IV sets, blood transfusion sets, needles, canulas, suture items etc can be sold. Orthopaedic implants, eye lenses, cardiac stents etc can be sold at about one-fourth of the prevalent market prices.

The mere availability of low-cost drugs will not help, until the doctors can be persuaded to prescribe either the generic (salt) name of the drugs or at least prescribe those brands which are of low cost and are available at the store.

Then the patient must be properly guided and counselled to purchase drugs from the low-cost generic drug store.

In Rajasthan about 72 fair price generic medicine shops are operational in medical college hospitals, district, sub-district and satellite hospitals by the name of “Life Line Drug Stores” and are operated by Rajasthan Medicare Relief Societies, which are in fact the “Rogi Kalyan Samiti” that is the local hospital management committees.

If the state government or local body or charitable trust is ready to bear the cost (which is very low, about Rs 10 per OPD patient), then these generic drugs can be given to poor/all patients free of cost as is being done by the Government of Rajasthan, through 15,000 free drug distribution Centres, right from medical college hospital to PHCs and sub-centres. About 400 types of commonly used essential generic drugs, surgical and sutures are given free of cost in government hospitals in Rajasthan.

The above steps are merely indicative and general guidelines, and they should be modified according to the circumstances in the field. In case of any difficulty or query you can mail me on or .

More information is available on, and

Dr. Samit Sharma, MD (Paediatrics), I.A.S., is Managing Director of the Rajasthan Medical Services Corporation, Gandhi Block, Swasthya Bhawan, Tilak Marg, C-Scheme, Jaipur (Rajasthan) 302 005.

by Dr. Samit Sharma

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