People’s drugs booster: Jan Aushadhi to add 10,000 stores by FY27

Now, the focus is on ensuring that new stores will have enough drugs to cater to demand, and a concerted publicity push to bring in more footfalls, Ravi Dadhich, chief executive officer (CEO) of the Pharmaceuticals and Medical Devices Bureau of India (PMBI), which runs the scheme, said in an interview.

“When we increase the number of centres at the backend, we have to ensure that sufficient quantities of medicines are available for this greater demand,” Dadhich said.

Also read | After intensive care, people’s pharmacy Jan Aushadhi sees healthy sales spike

Under the scheme, registered pharmacies called Jan Aushadhi kendras are set up by independent proprietors to sell affordable generic medicines. These are 50-80% cheaper than their branded counterparts.

The scheme, which was revamped by the Bharatiya Janata Party-led National Democratic Alliance government in 2015, continued to grow at a slow pace, plagued by concerns over quality and supply constraints—until the last two years.

“Earlier, we were opening around 1,000 Jan Aushadhi kendras per year,” Dadhich said. However, in calendar year 2024, the scheme boomed, with 4,500 new centres being registered.

Mint had earlier reported how pharmacists and suppliers have seen a jump in footfalls and revenues in the last year.

The scheme sold medicines worth ₹665 crore in fiscal year 2021 (FY21), which doubled in the next two years to ₹1,236 crore in FY23. In FY24, it reported an annual turnover of ₹1,470 crore. The PMBI is aiming to complete ₹2,000 crore sales this fiscal.

“We only had a target of opening 10,000 kendras until 2024,” Dadhich said. However, given the sudden uptick in the last two years, the target was increased to 25,000 kendras by FY27. At present, there are 15,033 registered kendras across the country according to the agency website. There were 80 centres in 2014, when the scheme was revamped.

Supply, quality focus

Jan Aushadhi’s quick growth in the last few years can be credited to the agency’s focus on fixing the supply kinks. A Delhi-based supplier, who requested anonymity, had earlier told Mint that PMBI had been on a war footing for the last two years.

Pharmacists had complained for long about a shortage of supplies of key medicines. In 2023, PMBI added two new warehouses in Bengaluru and Surat to ease distribution.

Also read | Centre steps up pace of generic drug stores; one Jan Aushadhi Kendra launched every two hours

Concerns over the quality of drugs procured for the scheme have also been repeatedly raised. The agency procures generic medicines from over 200 manufacturers across the country and has increased testing to ensure uniformity.

While medicines are only procured from manufacturing sites that are World Health Organization-approved for good manufacturing practice, PMBI has an added layer of checking for companies with an annual turnover of less than ₹200 crore. “This means smaller players need to be checked again and again whether they are following those guidelines or not,” Dadhich said.

Additionally, PMBI has undertaken comparative studies of their popular medicines against their branded versions to ascertain the quality of their products, Dadhich added.

Publicity push

To ensure the sustainability of the scheme, footfalls are the most important. With 20% margins on the maximum retail price of the drugs sold at such low costs, pharmacies need volumes to turn a profit. According to a government release dated 21 October, kendras across the country see about 1 million footfalls daily.

Dadhich said the agency is taking on a concerted publicity and awareness campaign to bring in more people. “We use all kinds of media, we use social media extensively, we use all kinds of outdoor publicity,” he said.

Medical practitioners have been reluctant to prescribe generics to patients. To address this problem, the agency is conducting interactions with the medical fraternity, and sessions at pharmaceutical universities and colleges as part of their awareness campaign, Dadhich said.

Also read | Jan Aushadhi Kendras see higher sale in June this year as compared 2023

To meet the anticipated growth in stores, the agency is focusing on increasing volumes by increasing its procurements from manufacturers. However, the scheme will not see a sudden widening of its product basket. It currently has about 2,000 products, as opposed to over 80,000 in the branded segment. “We don’t want to increase this basket to a very big size, because keeping a very big product basket and its procurement can lead to multiple problems like ensuring availability,” Dadhich said. However, they will continue to add key products in the chronic segments as they go off-patent, he added.

In the last year, the kendras have grown four to five times that of previous years. As they continue to anticipate faster growth, availability of supply is key, Dadhich said.

Against retail giants

The scheme is still a tiny part of the overall pharma retail market in the country. “There are 1.2 million chemists in the country, we are only 15,000 We are only 1% or 1.25% of the entire [ecosystem],” Dadhich said.

Asked if the scheme’s projected growth will make it a contender against branded retail giants in the country, Dadhich said that was not the goal. “We have to consistently do good and ensure our presence, [but] we’ll still be a small number…for those who need it or cannot afford high costs, they will have an option,” he said.