Policy analysis: PM Bharatiya Janaushadhi Pariyojana

Reading time: 8-10 minutes.

Despite the vast improvement in the government’s healthcare spending over the last 25 years, there has been no respite on steadily rising medical costs in the country. The cost of medicines constitutes a large percentage of the total medical costs of an individual. Over 30-40% of people die due to lack of money to buy medicines. In order to aid the lower class people, the government in 2008 brought the PM Bharatiya Janaushadhi Yojana.

The campaign is launched by the Department of Pharmaceuticals in association with the Central Pharma Public Sector Undertakings, which is aimed to provide quality medicines at affordable prices through dedicated outlets. These stores provide generic medicines at very less price and the potency of these are the same when compared to branded medicines available in markets. It was renamed as Pradhan Mantri Bhartiya Janaushadhi Pariyojana giving further impetus to the scheme in 2016.

Janaushadhi week was celebrated across the country from 1st March to 7th March 2020. During this week, sugar level checkup, blood pressure check-up, free doctor consultation, and free medicine distribution were hosted at the Janaushadhi Kendras. March 7th is commemorated as the Janaushadhi day to create awareness about generic medicines. Prime minister Narendra Modi interacted with the beneficiaries of the scheme and the owners of the Janaushadhi Kendras through video-conferencing. He commended the role of store holders and announced to introduce awards to recognize the contribution of people associated with the scheme.

What is Janaushadhi?

Generic nomenclature is the chemical name of a drug. Pharmaceutical companies give the medicines a brand name for its dosage form, concentration, and patent such formulations. The companies advertise their brands to make them popular, influence the prescription behavior to increase the sale of their own branded medicine, and once the brand is established, make money out of it by pricing their branded medicines exorbitantly. Compared to the branded version, its generic version is available at a lesser price. The BPSU focuses on marketing generic medicines in Janaushadhi stores by sourcing medicines from pharma CPSUs and the private sector. When the generic medicines are made available in the market, the cost of the same medicines under other brand names also drops substantially to compete.

The predecessor to the Janaushadhi Yojna is the Neethi Medial store. It was started by the Kerala State Cooperatives Federation with the help of their government in 1998. On the success of this, the Central government adopted the Janaushadhi scheme for providing unbranded generic medicines at reasonable prices. Generic medicines are drugs marketed under a non-proprietary name rather than the brand name. The quality, safety, and efficacy of medicines are ensured by the CPSUs.  Around 6000 stores are in the districts of India. Initially, the government has identified 800 essential medicines to be available in the stores, and prescription is not required to buy from such stores. It is a measure to curb the death of people due to the inability to procure medicines. The term Janaushadhi means “medicine for people”.

Benefits under the scheme

The benefit under the scheme is two-fold. With the promotional intent the government has organized the scheme such that apart from the government, any NGO or institution can open Janaushadhi Kendras (Stores). Any NGO, institution, cooperative society identified by the state governments and free space provided in the premises of government hospital or any NGO, society, trust, institution or self-help group having experience of operation in welfare activities for three years and having space and financial capacity, or any pharmacist/ medical practitioner having space and financial capacity. For the Kendras run by government agencies, financial support of Rs.2.50 lakh is given by the Department of Pharmaceuticals, of which 1 lakh exclusively for medicine and the rest for infrastructure. For the individual entrepreneurs, an extended incentive of 15% of monthly sales up to Rs.2.5 lakh in total is provided.

The main aim of the scheme is to bring down the healthcare budget of every citizen of India by providing quality generic medicines at affordable prices. It is made available through effective public-private partnerships. The scheme promoted awareness about cost-effective drugs and perception about them and encourage government doctors to prescribe generic medicines. Lastly, it enabled substantial savings in the case of poor patients who suffer from chronic ailments requiring long periods of drug use. It also promoted & encouraged private industry to sell their quality unbranded generic products through these retail outlets.

As of now, there are more than 1000 therapeutic medicines and 154 surgical and consumables available in the market. The scheme has priced the medicines at a maximum of 50% of the average price of the top three branded medicines. Therefore, the cost of Janaushadhi medicines is cheaper by at least 50-80% of the market price of branded medicines.

The beneficiaries of the yojana

As discussed the following persons will be benefited by the scheme:

  • Poor and middle-class people
  • Those with ailments which require life-long treatment

The following persons setting up stores under the scheme can avail subsidies and other benefits.

  • NGO, Co-operative societies recognized by the state government
  • NGO, trust, society, self-help groups that have space and financial capacity
  • Any individual including an un-employed pharmacist or medical practitioner.

Legal framework of Janaushadhi

Quality aspects of medicines are regulated by the Drugs and Cosmetics Act, 1940 and Rules 1945 and pricing and availability of the drugs is governed by Drug Price Control Order 1995. An expert body called the National Pharmaceutical Pricing Authority (NPPA) also has control over the pricing of medicines. These rules have to be followed by the government and pharma dealers that have undertaken to provide generic medicines. The Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 states that every physician should prescribe drugs with generic names and ensure that there is a rational prescription and use of medicines. The National Pharmaceuticals Pricing Policy, each year is notified with the object of framing regulatory framework for pricing drugs and ensure the availability of required medicines. If these rules and regulations are followed effectively then the goal of reducing the medical expenses by 70% can be achieved.

Critical analysis

  • Progress made under the scheme

Every year, progress is being made to the scheme either small or big. The first major amendment wase earlier, kendras were opened only in government hospitals whereas now it may be opened outside the premises of the hospital also. The product basket included surgical and consumables apart from therapeutic medicines. Private suppliers were included to provide generic medicines. Grant-in-aid is provided to stores run other than government and assistance is also provided to SC/ST and differently-abled persons.

These aids serve as an incentive and attract many people to open Janaushadhi stores. This is the reason for the success of opening around 5000 stores. The scheme serves as a job creator and helps in income generation. The scheme is further focused to provide health care products and services. Possibilities of establishing Janaushadi Kendras in Kisan centers, common service centers, and other retail outlets are being encouraged. Efforts are constantly being taken to improvise the scheme and thereby achieve the mission of reducing per head medical expenses.

  • Similar health care schemes in India

The Indian government has formulated similar schemes for poor people to avail medical services. A lot of schemes are formulated to provide insurance to people on satisfying certain financial and economic conditions. Rashtriya Swathya Bima Yojana is a health insurance program for the Indian poor. The scheme aims to provide insurance to the unrecognized sector workers. This scheme was replaced by the Ayushman Bharat Yojana a scheme to revamp the medical sector. Candidates under this scheme can get free of cost medical assistance in both government and private hospitals.

An amount of Rs.5 lakh per annum per family can be availed under this scheme. Pradhan Mantri Suraksha Bima Yojana is a scheme offering accident insurance. People aged 18 to 70 having a bank account can avail benefits under this scheme. It offers an annual cover of Rs.1 lakh for partial disability and Rs.2 lakhs for total disability or death. Pradhan Mantri National Dialysis Programme as a part of the National Health Mission provides free dialysis to the poor. Patients below the poverty line can avail of these fully free of cost dialysis.

  • Failure of the scheme

The major constrain faced by the Janaushadhi scheme is the misconception among the people that cheap medicines are not original and not effective. Due to the lack of campaign and awareness among the poor people, the scheme did not reach each and every citizen. Secondly, doctors are not prescribing generic medicines. Doctors in collaboration with the pharma industry, prescribe branded medicines so that they can make a profit from those industries.

The misconception among the public that branded medicines are very good to promote the doctors to prescribe them. Medical associations and societies are benefitted by the pharmaceutical companies since they agree to fund the doctors’ scientific research activities. The attractive returns tempt the doctors to prescribe branded medicines.

Researches show that the lack of generic medicines in stores is also a reason for the failure of the scheme. Since only the branded medicines are replaced on expiry and generic medicines are not done, the pharmacists are not ready to stock up generic medicines. The fear of economic loss to be faced by the pharmacist is a corollary to the fact that people do not buy generic medicines. Moreover, a hefty margin of 201-1016% margin can be achieved in branded medicines whereas only 50-55% margin in generic medicines.


Janaushadhi scheme was a major step in encouraging the sale of generic medicines and enabling poor people to procure medicines. Effective implementation will curb the practice of prescribing branded medicines. The quality of the medicines is also good and equal to that of branded ones. Pradhan Mantri Janaushadhi Pariyojana has reached its 50% goal of opening generic medicine stores in all districts and union territories. Over 6000 plus stores are now opened in India as per the report released in 2020.

Apart from selling medicines at low cost, it has increased employment opportunities for a lot of individuals. The credit facilities and other amenities have helped even economically poor people to earn a living. The most benefitted of the scheme are the ones in the unorganized work sector and ones suffering from ailments requiring long term medication.

However, the Janaushadhi scheme is not a great success due to certain factors. A huge misconception that the only costlier medicine is effective among the public stops the consumers from buying generic medicines. There are threats and confusion that medicines that are cheap will not be effective and of not good quality. Doctors are not ready to prescribe generic medicines since they are not benefitted by it. Branded pharmaceutical companies give commissions and other kinds of gifts to doctors who prescribe this.

They indulge in indirect marketing of their medicines. This increases the cost of branded medicines. The government is also not taking steps to promote generic medicines. Awareness is not created among the people about the scheme and stores opened under it. The government needs to take better advertising steps to popularize the scheme which will increase the sale of generic medicines.

Author: Rashmi Senthilkumar from Sastra University, Thanjavur.

Editor: Arya Mittal from Hidayatullah National Law University, Raipur.

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