substantially reduced. Many of the drugs were wanted in very small quantities, and central purchasing for such small quantities was uneconomical. Other drugs on the list were deemed non-essential. The Corporation decided to introduce the essential drugs concept and an essential drugs list based on WHO's Model List.

TNMSC's first task was to finalise the list of essential drugs it would procure. A committee of leading professors of medicine and therapeutics (including a WHO representative) was constituted to do this. The Committee held several meetings with drug managers and specialists, and after detailed discussions a final list of 240 generic drugs was agreed. An analysis of these drugs indicated that only about 100 drugs made up 90% of the total value of all 240 drugs. While recognising the scope for further reduction in the list, it was decided not to introduce more cuts in its first year. As services in primary health centres and sub-centre are limited, the Committee decided to standardise the drugs that can be supplied to them. The centres can only requisition drugs outside this list in special circumstances.

The reduction in the existing drugs list meant that the Corporation could procure the drugs it needed with approximately 90 per cent of its drug budget. This left other drugs to be purchased locally by the hospitals out of the remaining 10 per cent, which TNMSC divided among them. These funds cannot be used to purchase drugs which are on the Corporation's list. After further discussions, the list of drugs which can be procured locally was finalised and circulated to all hospitals. To minimise costs, the possibility of calling for tenders for such drugs was considered. But this would have reduced flexibility, been time consuming and in emergencies hospitals might not have received drugs quickly enough.

In a centralised purchase and distribution system, such as that created in Tamil Nadu, some degree of flexibility for local purchase by medical institutions is essential to meet the needs of all. The system of distributing 10 per cent of the annual budget to hospitals has helped the Corporation counter any criticism that the drugs list is inadequate.

Improving distribution

The main objective of Tamil Nadu's drug management policy is to ensure regular supply and prevent stockouts. Previously when drug companies received an order they sent supplies to the medical institution concerned. One or two companies tended to receive huge orders which they could not meet. Another problem was the considerable delay in paying companies, so that they stopped supplying. It was decided to create a chain of 'godowns', warehouses which stock all drugs. A warehouse for storage and distribution of drugs has been established in each of the State's 23 districts. Drug manufacturers are required to supply the drugs to the warehouse. A distribution schedule has been given to the hospitals, which can take drugs from the store according to that schedule. The drug godowns carry three months' stock, with hospitals permitted to draw a month's supply at a time. The safety stock limit is about one month's requirement, although this depends on the turnover of the particular drug and the lead time for obtaining supplies.

Increased availability

The Government of Tamil Nadu's innovations in drug procurement and management have improved drug availability in nearly 2000 Government medical institutions throughout the State. There is better budgetary control on drug consumption and medical institutions have become more cost conscious. There has been a significant improvement in the quality and appearance of supplies in the Government sector. The planned computerisation of the entire operation should enable even better inventory management, cost control and improved availability of drugs in hospitals.

Essential Drugs Policy in Delhi State¹

The cornerstone of the new Drug Policy of Delhi State (1994) is the List of Essential Drugs. The first step taken therefore was to prepare such a list. A Committee for Selection of this List was constituted. This contained clinicians, pharmacologists, microbiologists of the concerned hospitals, other leading experts from outside the Delhi State Hospitals and the Drugs Controller of India, the Drugs Controller and the Director of Health Services of Delhi State. After considerable discussions and after taking into account all points of view this List was prepared and widely circulated.

The list was printed on September 2, 1994 and contains a list of drugs for Out-Patients and a list for In-Patients. The medicines available for the Out-Patients - 177 in number - would be available also for the In- Patients. The total number of drugs for the In-Patients came to 275 drugs. In addition there are fourteen vaccines out of which only seven are available for the Out-Patients. There are twelve solutions for correcting water and electrolyte balance.

Several countries and hospitals have lists of essential drugs but in only a few countries are these lists enforced to introduce changes in drug policy such as was done in Iran and Bangladesh. It was essential therefore to take steps to use the list of essential drugs developed at Delhi. Immediately after the list was distributed to all hospitals they were asked not to