Public health being a state subject, under the National Health Mission (NHM), financial support is provided to the States/UTs for strengthening their healthcare delivery system including support for provision of free drugs to those who access public health facilities. The Government of India has provided for NHM-Free drug service initiative under NHM.

The support under NHM is provided based on requirements posed by States/UTs in their Programme Implementation Plans under NHM. The number of free drugs provided by the States varies from State to State.

The state-wise approvals provided for drugs under NHM for financial years 2012-13, 2013-14 and 2014-15 (up to December, 2014) is given below:-

Support for Drugs Under National Health Mission

(Rs. Crore)

* Does not include kind grants. # upto December 2014. Source: State RoPs.

As regards proper monitoring of free availability of quality drugs in public health care facilities, substantial support to States/UTs for provision of free drugs under NHM is subject to the State fulfilling the following conditions:

• It notifies or has a clearly notified policy of providing free essential drugs to all patients coming to public sector health facilities at least uptodistrict hospital level,
• It has/ creates a robust procurement, logistics & supply chain system that is IT backed,
• It has differential facility-wise essential drug list depending on the nature of the facility,
• It has a sound drug regulatory and quality assurance system,
• It lays down standard treatment guidelines and provides for prescription audits to ensure rational use of drugs.

The drugs procurement and logistics systems of the States are also reviewed by the National Health Systems Resource centre.

With regard to steps taken/being taken by the Government for proper monitoring of the funds, besides provision of annual audit by Comptroller and Auditor General, some of the key monitoring mechanisms put in place by the Central Government for adherence to finance procedures and proper financial utilization are as follows:

• Submission of quarterly Financial Monitoring Reports by the States;
• Annual Statutory Audits;
• Concurrent Audits;
• Implementation of Public Management System (PFMS) in NHM. The PFMS has been developed by the office of the CGA of the Ministry of Finance for monitoring and management of funds on just in time basis. Capacity building and sensitization of staff have been done. Efforts are being made to ensure registration up to the village level.
• Regular reviews on NHM including on financial matters with State/UT government officials.
• Visits by the team of Financial Management Group of the Department to States for periodical review;
• Annual visits to States by Common Review Mission, which inter-alia, looks at financial system and mechanisms.

Further, the Ministry of Health & Family Welfare does not have any information about black marketing of drugs. However, the State Drug Controllers are empowered under the Drugs & Cosmetics Act, 1940 and Rules thereunder for initiating action against such unauthorized activities.

Pricing of drugs is dealt with by the Department of Pharmaceuticals. As per information provided by that Department, 51 cancer medicines are included in the scheduled category of Drugs Price Control Order (DPCO) out of which National Pharmaceutical Pricing Authority has already notified the ceiling prices of 47 cancer medicines. No person is authorized to sell formulations at a price higher than the ceiling price of scheduled formulations fixed under DPCO, 2013. In respect of non-scheduled formulations, not covered under price control, manufacturers are not allowed to increase the price beyond the permissible limit of ten percent on a year to year basis under the provision of DPCO, 2013.