Thought for Today, 29 th June 2020

Life is a trip. The only problem is that it does not come with a map. We have to search our own routes to reach our destination.

Sunday, April 14, 2013

Kerala Government sells life-saving drugs at cheaper prices

The role model: Kerala Government sells life-saving drugs at cheaper prices

By S Sanandakumar, ET Bureau | 7 Apr, 2013, 04.18AM IST

Kerala tops all states in India in terms of the per capita expenditure on medicine. But the state is also a good example of how government efforts can serve as a foil for rising prices of essential drugs.

The Kerala Medical Services Corporation Ltd (KMSCL), a government-owned enterprise, offers life-saving drugs at substantially lower costs — in some cases at one-sixth of the market price — compared with the retail market (see Huge Difference).

How so? KMSCL procures medicines in bulk and drives a hard bargain while negotiating prices with drug companies. By engaging directly with these companies, the enterprise has eliminated middlemen altogether. As any successful business would tell you, that helps keep a tight lid on costs.

KMSCL sells medicines through a chain of stores called Karunya. It has so far opened five medical stores at five medical colleges in the state.

That's a small number, but the impact of these stores is reflected in the turnover — Rs 32 crore a year — from a single outlet at the Thiruvananthapuram Medical College, according to Biju Prabhakar, managing director of KMSCL.

When the first outlet opened in Thiruvananthapuram, which is in the southern tip of Kerala, people from the Malabar region (the north) travelled all the way to the outlet to procure medicines.

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