Privatisation & Saffronisation of Jan Aushadhis : Comrade J.S. Majumdar

[ Comrade J.S. Majumdar is All India Vice-President of Centre of Indian Trade Unions (CITU). He has more than three decades of experience of trade union work among the medical representatives and hence is well poised to understand the dynamics of the policy changes in the pharmaceutical industry and the health sector. In a FB note Comrade Majumdar explains in detail the sinister agenda of the Modi government to privatize and saffronize the medicines in the name of providing affordable medicines to the masses. The website of the ‘Jan Ausadhi’ scheme has a message by PM Modi that states the mission of the scheme as follows : “To bring down the healthcare budget of every citizen of India through providing “Quality generic medicines at Affordable Prices” “. Socialist India is reproducing the entire note in full, given the importance that it has. ]


Privatisation & Saffronisation of Jan Aushadhis

About Jan Aushadhi Scheme

1. ‘Jan Aushadhi’ scheme was an appreciable attempt by Man Mohan Singh government in 2008 with stated objective to make available government controlled low-priced quality medicines to all, particularly the economically vulnerable sections.

2. It is a direct market intervention by the Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers, Government of India (GoI). The implementation agency is the “Bureau of Pharma PSUs of India” (BPPI)

3. BPPI consists of the Department of Pharmaceuticals of the GoI and 5 central drug public sector undertakings (PSUs) – Indian Drugs and Pharmaceuticals Ltd (IDPL), Hindusthan Antibiotics Ltd (HAL), Bengal Chemical and Pharmaceuticals Ltd (BCPL), Karnataka Antibiotics and Pharmaceuticals Ltd (KAPL) and Rajasthan Drugs and Pharmaceuticals Ltd (RDPL) – with its headquarter at IDPL head office at Gurgaon and was registered under ‘Societies’ Act in 2010.

4. BPPI’s stated responsibilities are to (i) procure, (ii) fix prices and (iii) supply “Jan Aushadhi” branded drugs; (iv) establish network of Jan Aushadhi Stores (JAS); and (v) monitor the sale of those through JAS. BPPI itself became a medicine marketing entity of the GoI.

5. The Jan Aushadhi scheme envisaged 5 drug PSUs to produce all Jan Aushadhi medicines without any marketing and distribution responsibility. Those medicines, not produced by the PSUs, may be procured from private sector through open tender.

6. The scheme is fully funded by the GoI with a rider that as and when the scheme is established, BPPI will “make efforts to recover as much as possible of its expenses incurred on its salary, wages, office expenses, and publicity expenses through trade margin. To that extent Government support will stand reduced.” 2016-17 budget allotted Rs.35 crore for Jan Aushadhi scheme.

7. BPPI is supposed to get each batch of procured medicines duly tested from NABL (National Accreditation Board of Testing and Calibration Laboratories) empanelled laboratories before supply to sales network.

8. The GoI has already setup central warehouses for BPPI in Gurgaon. GoI also plans to set up another five regional warehouses. (Times of India; 10.06.2018.)

9. BPPI sends tested medicines from its warehouse through its distribution network of appointed C&F Agents / Distributors in different States / UTs.

10. BPPI ultimately sales it’s ‘Jan Aushadhi’ branded government-controlled low-priced medicines through Jan Aushadhi Stores (JAS), appointed as franchisees of BPPI.

11. Earlier, JAS got free space in government hospitals. Later Central government amended guidelines so that JASs can be opened in any government owned building premises like Railways, State Road Transport, Urban Local Bodies, Panchayat Institutions, Post Offices, Defence Establishments and PSUs.

12. In addition, each JAS gets Rs.2.5 lakh financial support from BPPI as cost of initial establishment expenses including Rs.1 lakh free ‘Jan Aushadhi’ medicines; 30 days credit facilities (C&F and distributors 60 days). C&F gets full and distributor 2% of sale as compensation against expired medicines. Expired medicines are not called back.

13. Number of JAS as on January 2018 was 3,041 (in 26 States/UTs). BPPI’s MRP level Jan Aushadhi sale was Rs.112 up to December, 2017 estimated to be Rs.120 Crore in FY 2017-2018.


Privatisation of Jan Aushadhi Scheme in Modi Regime

1. Modi government decided to sale or close all five Pharma PSUs in BPPI (Bureau of Pharma PSUs of India) making the name itself a joke.

2. On 28 December, 2016, Modi ministry directed the Department of Pharmaceuticals to operationlise its decision of selling surplus land of HAL, IDPL, RDPL and BCPL to meet the liabilities first and then go for strategic sale of HAL and BCPL; and to close IDPL and RDPL. The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 1.11.2017 also decided to disinvest 100% GoI equity in KAPL through auction.

3. The direction also include “While taking a decision to close the PSUs, the Department may also explore the possibility of hiving off the subsidiary companies of HAL and IDPL for private participation.”

4. Following are establishments of Pharma PSUs which are going to be sold out to private corporates. Two other Central Pharma PSUs – Bengal Immunity Limited and Smith Stanistreet Pharmaceuticals Ltd. – both in West Bengal, are already declared as closed.

i. IDPL has its manufacturing plants at Gurgaon and Rishikesh; and subsidiaries – IDPL (Tamil Nadu) Ltd, Chennai; Bihar Drugs & Organic Chemicals Ltd, Muzaffarpur; and Orissa Drugs and Chemicals Ltd.

ii. Hindustan Antibiotics Ltd. (HAL) has is plant at Pimpri, Pune in Maharashtra; and Subsidiaries – Maharashtra Antibiotics and Pharmaceuticals Ltd (MAPL) at Nagpur and Manipur State Drugs and Pharmaceuticals Ltd ( MSDPL) at Imphal.

iii. Bengal Chemicals & Pharmaceuticals Ltd. (BCPL) has its manufacturing plants at Maniktala and Panihati in West Bengal, Mumbai and Kanpur.

iv. Rajasthan Drugs & Pharmaceuticals Ltd. (RDPL) is a joint venture company of GoI and Rajasthan State Industrial Development & Investment Corporation Limited (Govt. of Rajasthan) holding 51% and 49% shares respectively.

v. Karnataka Antibiotics & Pharmaceuticals Ltd. (KAPL) is also a joint venture company with 59% share of GoI and 41% share by the Government of Karnataka through Karnataka State Industrial and Infrastructure Development Corporation.

Outsourcing of Distribution and JASs

1. BPPI has now appointed M/s. Ethics Infinity Pvt. Ltd. “for providing End to End supply chain management” to Jan Aushadhi Stores.

2. In January, 2017 GoI and its favoured National Yuva Cooperative Society (NYCS) entered into an agreement to set up 1,000 JASs across the country.

Modi Government’s Misleading Propaganda on Drug Prices

1. Modi government itself adopted double standard in fixing drug prices, but launched misleading propaganda to divert attention of the people from the real issues.

2. For ‘Jan Aushadhi’ medicines, the producers have no responsibility of marketing and distribution. The burden of cost of marketing and distribution is of BPPI, facilitated and entirely funded by the GoI.

3. Jan Aushadhi medicine prices are BPPI determined government-controlled prices, subsidized by GoI through BPPI as enumerated above. BPPI issues Jan Aushadhis price list. It has nothing to do with NPPA fixed prices under DPCO, 2013.

4. Whereas, the prices of essential medicines in the market are determined by the National Pharmaceutical Pricing Authority (NPPA) under the same Department of Pharmaceuticals as per current Drug Prices (Control) Order (DPCO), 2013 issued by the same Government of India.

5. As per DPCO, 2013, there is no difference between brands and generics to determine the prices of medicines. Clause 4 of the DPCO, 2013 states that the ‘ceiling prices of the medicines’ shall be determined on the basis of “Total number of such brands and generic versions of the medicine having market share more than or equal to one percent of total market turnover on the basis of moving annual turnover for that medicine.” On that basis NPPA determined 700 essential medicine prices in 2017 which the Prime Minister Modi highly appreciated and claimed as his government’s achievement. (underline added for emphasis)

6. DPCO, 2013 also allows companies to increase 10% rise over NPPA ceiling prices in April each year without Government’s approval.

7. Through DPCO, 2013, the Government allowed the private companies to freely increase the prices of both brand and generic medicines which are outside the National List of Essential Medicines (NLEM).

8. The real reason of drug prices increase lies in defective and diluted DPCO and fixation of GST Rate Schedule of pharmaceutical products.

Saffronisation of Jan Aushadhi Scheme

1. ‘Jan Aushadhi’ scheme of Man Mohan Singh government, launched in 2008, was renamed by Modi government first in 2015 as “Pradhan Mantri Jan Aushadhi Yojna” (PM-JAY); and again in 2016 renamed it as “Pradhan Mantri Bhartiya Janaushadhi Pariyojana” (PM-BJP) and the Jan Aushadhi Stores as “PM-BJP Kendras”.

2. Each pack of medicines having ‘Jan Aushadhi’ brand has now a new brand as “Pradhan Mantri Bhartiya Janaushadhi Pariyojana” (PM-BJP).

3. Not only PM-‘BJP’ is being embossed on each pack of Jan Aushadhi medicines, ‘BJP’ has been highlighted in saffron colour in each pack of medicines and project activities in Hindi to reach in each house hold.


“Public health activists have criticised the government for using the Jan Aushadhi scheme to “advertise” the name of the Bharatiya Janata Party. All medicines being sold through this scheme across the country carry a logo that highlights the Hindi letters “Bha”, “Ja” and “Pa” in saffron the in the scheme’s acronym (see image).” (Times of India; Aug 4, 2018)

“Public health activists have criticised the government for using the Jan Aushadhi scheme to “advertise” the name of the Bharatiya Janata Party. All medicines being sold through this scheme across the country carry a logo that highlights the Hindi letters “Bha”, “Ja” and “Pa” in saffron the in the scheme’s acronym (see image).” (Times of India; Aug 4, 2018)

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