Jan Aushadhis, the Target of Privatisation and Saffronisation

J S Majumdar

WITH the Modi government deciding to sell or close all five Pharma PSUs in the Bureau of Pharma PSUs of India (BPPI), it is making a mockery of the name Jan Aushadi.

On December 28, 2016, the Modi ministry directed the Department of Pharmaceuticals to operationalise 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 November 1, 2017 also decided to disinvest 100 per cent GoI equity in KAPL through auction.

The direction also includes “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.”

Following are the 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.

‘Jan Aushadhi’ was introduced by Manmohan Singh government in 2008 with the stated objective to make available government-controlled low-priced quality medicines.

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).

BPPI consists of the Department of Pharmaceuticals of the GoI and five central drug public sector undertakings (PSUs) – Indian Drugs and Pharmaceuticals Ltd (IDPL), Hindustan 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.

(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 its plant at Pimpri, Pune in Maharashtra; and sSubsidiaries - Maharashtra Antibiotics and Pharmaceuticals Ltd (MAPL) at Nagpur and Manipur State Drugs and Pharmaceuticals Ltd ( MSDPL) at Imphal; (iii) Bengal Chemicals and Pharmaceuticals Ltd (BCPL) has its manufacturing plants at Maniktala and Panihati in West Bengal, Mumbai and Kanpur; (iv) Rajasthan Drugs and Pharmaceuticals Ltd (RDPL) is a joint venture company of GoI and Rajasthan State Industrial Development and Investment Corporation Limited (Government of Rajasthan) holding 51 per cent and 49 per cent shares respectively and (v) Karnataka Antibiotics and Pharmaceuticals Ltd (KAPL) is also a joint venture company with 59 per cent share of GoI and 41 per cent share by the government of Karnataka through Karnataka State Industrial and Infrastructure Development Corporation.

BPPI’s stated five responsibilities are to procure, fix prices, supply ‘Jan Aushadhi’ branded drugs, establish network of Jan Aushadhi Stores (JAS) and monitor the sale of those through JAS. BPPI itself became a medicine marketing entity of the GoI.

The Jan Aushadhi scheme envisaged five drug PSUs to produce all Jan Aushadhi medicines. Those medicines, not produced by the PSUs, may be procured from private sector through open tender.

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’. The 2016-17 budget allotted Rs 35 crore for Jan Aushadhi scheme.

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. BPPI sends tested medicines from its warehouse through its distribution network of appointed C&F agents / distributors in different states / UTs.

BPPI ultimately sells its ‘Jan Aushadhi’ branded government-controlled low-priced medicines through Jan Aushadhi Stores (JAS), appointed as franchisees of BPPI. Earlier, JAS got free space in government hospitals. Later, the 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.

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