Prime Minister Narendra Modi on March 7 opened 7,500 Janaushadhi Kendra at North Eastern Indira Gandhi Regional Institute of Health and Medical Sciences (NEIGRIHMS) in Shillong.
The 7500th store is a major milestone for the Janaushadhi scheme launched in 2008 by the UPA government to provide quality generic medicines at affordable prices through its own stores.
Fledgling scheme
The scheme, however, never really took-off. A person with the knowledge of the matter told Moneycontrol that vested interests within the government didn't want the scheme to go ahead due to intense pressure from the industry.
The scheme got a new lease of life under Prime Minister Narendra Modi, as he not only saw it as a vehicle to provide affordable generics but also an employment avenue for thousands of small entrepreneurs.
The scheme was revamped as Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) scheme in 2015-16.
The reboot, clean-up
Under PMBJP, a medicine is priced on the principle of a maximum of 50 percent of the average price of the top three branded medicines. Jan Aushadhi medicines are cheaper at least by 50 percent and in some cases even at 80-90 percent of the market price of branded medicines. Licences were given to small entrepreneurs to set up Jan Aushadhi stores. They were given 15 percent of monthly sales subject to a ceiling of Rs 10,000 per month up to a limit of Rs 2.5 lakhs as incentive. There is 20 percent trade margin for retailers and 10 percent margin for distributors.
It hasn't been easy. PMBJP was marred by poor implementation, operational and supply chain issues with stores struggling to get the stock on time, lack of product range, quality issues and corruption.
The government changed three CEOs and then decided on Sachin Singh, an MBA-turned Indian Revenue Service (IRS) officer, to get things in order. Under Singh, things seemed to have changed for better.
The store count has increased from 5,140 in the financial year 2019 to 7,500 in FY21. The turnover has jumped from Rs 315 crore to Rs 600 crore (expected to close in FY21) during the period. The product basket also rose 700 to close to 1000.
The government can still do a lot to popularise the stores, improve supply chain and ensure quality of the products sold at Jan Aushadhi.