Solution on out-of-pocket expenditure on medicines: BUDGET 2018?

Dr Susmita Reddy K

TN Medical College and BYL Nair Ch. Hospital

Out of pocket expenditure on medicines: an enormous problem which has been under public radar since years, especially in developing countries like India, finally seems to have a solution with the finance minister announcing the Flagship National Health Protection Scheme in the Union Budget 2018, which seeks to provide health insurance cover worth over Rs5 lakh per family to over 10 crore economically vulnerable families. It is expected that around 50 crore will be benefitted from this scheme. However, is it so simple and easy as it seems? Let us have a look!

At the first glance, it does seem to be a really good plan. Out of pocket expenditure or OOPE is a huge burden on the common man.


But have we ever given a thought about why we have to incur these costs even when treatment at a public hospital is supposedly free? It is because these hospitals neither have the proper infrastructure nor budget to provide complete free treatment. So, wouldn’t it be better to allocate this money for their development rather than spending on health insurance? Furthermore, in the absence of good health care in public sectors, people would utilise this public-financed health insurance money to seek treatment in the private sector, thus boosting them.

Also, what those earning marginally over 5 lakhs but having multimorbidity or the elderly? It is a known fact that medicines constitute the largest proportion of OOPE and current health care systems, even in the advanced nations like USA, fail to provide protection financially for medicines. Hence it is really crucial that our policy makers consider other things like cost sharing policies, where the employer is also responsible for the insurance and integrating this plan with the existing health care policies and other subsidies. Moreover, there is a need for better guidelines for doctors on prescription of unessential drugs, especially for long term illnesses to cut down these costs.

Well, as always, raising questions is simpler than finding answers. However, since India is still at the stage of formulating this policy, it is very much possible to take into account all these factors and come up with a plan which is strong enough to take care of our health care needs in the decades to come.


  1. Sum G, et al. BMJ Glob Health 2018;3:e000505.doi:10.1136/bmjgh-2017-000505.
  1. Budget 2018:Make health insurance an essential product.
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