For smooth medicine supply , CGHS centres to now have 3 - month buffer

livemint.com · Feb 20, 2026 · Collected from GDELT

Full Article

The policy was approved for adoption 15 January 2026.(AFP)SummaryThe government has implemented a three-month buffer stock policy for medicines under the CGHS, impacting 4.2 million beneficiaries. This move seeks to alleviate shortages and enhance quality control via a digital tracking system and a demand-driven procurement model.New Delhi: The government has mandated a three-month buffer stock of medicines under the Central Government Health Scheme (CGHS), which covers 4.2 million beneficiaries across 81 cities, in a move aimed at tackling recurring shortages and potentially boosting medicine sales while also keeping an eye on quality, according to two government officials and documents reviewed by Mint.The policy was approved for adoption 15 January 2026. The CGHS Directorate is currently rolling out operational guidelines and updating its digital systems to facilitate real-time tracking and buffer stock management.The health and family welfare ministry's move comes in the backdrop of a growing number of complaints regarding medicine shortages and delayed service; with the Centre framing a comprehensive Drug Procurement Policy for the marquee health scheme. The policy seeks to replace ad hoc provisioning with a demand-driven forecasting model to ensure the uninterrupted availability of high-quality medicines; with the procurement to now take place through the Medical Stores Organisation (MSO) and the Pharmaceuticals & Medical Devices Bureau of India (PMBI).The development assumes significance given that the government procures medicines worth ₹20,000-25,000 crore annually for CGHS, according to the demand for grants for the health ministry. People in the know said that the new norms are unlikely to lead to any significant spike in fund requirements—while building initial buffer stocks will require upfront purchases, the policy aims to eventually reduce the overall cost by replacing expensive local chemist indents with cheaper bulk procurements.According to the document, the rate contracts for all such drugs, which are required for CGHS beneficiaries but are not available with the MSO or Jan Aushadhi, the CGHS shall procure the drugs by establishing its own rate contracts with manufacturers through an open tender system to be supplied on a ‘direct-to-consignee’ basis.In contingencies, procurement is permitted from central and state public sector enterprises, ensuring a steady supply of medicines across all cities under CGHS. While dietary supplements and cosmetics are excluded, authorized local chemists (ALCs) will only fill daily gaps under strict regional scrutiny to minimize non-bulk reliance. To ensure transparency, the government will perform real-time tracking of stock levels and expiry profiles.Fixing the cogs“The newly-approved policy serves to strengthen supply chain resilience and quality assurance. By focusing on bulk procurement of high-consumption drugs, the government aims to maximize resource utilization and prioritize generic medicines,” said one of the two government officials cited above, requesting anonymity.Another important component of this reform is the integration of the Healthcare Management Information System (HMIS) to oversee the entire drug distribution lifecycle. This digital infrastructure will monitor supplies and stock levels in real-time, allowing for the monthly redistribution of medicines from overstocked units to those facing shortages.“The system is specifically designed to minimize reliance on local chemists by scrutinizing regional procurement patterns and ensuring that medicines are used within their permissible shelf life," said the second official cited above, who also did not want to be named. "To prevent financial waste, buffer stocks will strictly include medicines with a shelf-life of at least one year, with a mandate to immediately utilize any stock due to expire within three to six months.”Queries on the norms emailed to the health and family welfare ministry spokesperson remained unanswered till press time.Experts said the move was much needed. Dr. Indu Bhushan, former chief executive officer of the National Health Authority (NHA) said, “Maintaining a three-month buffer stock at CGHS facilities is an important step, as stock-outs have been a recurring concern. Many CGHS beneficiaries live with non-communicable diseases that require lifelong treatment. Any disruption in availability compels patients to purchase essential medicines out of their pockets. This initiative will help ensure continuity of care. However, its success will depend on predictable and adequate funding, as CGHS has historically faced budgetary constraints.”Dr. Bhushan said while digital drug tracking is a progressive reform, its effectiveness hinges on a robust and fully integrated supply chain.“Digital oversight must be seamlessly linked to procurement and inventory management systems. For the process to be truly transparent and efficient, the tendering and procurement cycles must be supported by timely fund releases, so that the system remains responsive and reliable,” he said.India's pharmaceutical market is currently valued at about $50 billion, and is on a trajectory to reach $120-$130 billion by 2030.Quality controlThe policy also calls for rigorous quality control measures, including periodic testing of medicines through empaneled NABL (National Accreditation Board for Testing and Calibration Laboratories)-accredited laboratories to verify standards laid down in the Indian Pharmacopoeia.Any batches identified as "not of standard quality" (NSQ) will trigger immediate reporting to the Central Drugs Standard Control Organization (CDSCO) and contractual penalties for suppliers. The procurement through authorized local chemists will be monitored daily at the local wellness centre level, fortnightly by regional offices, and quarterly by the directorate.NABL is an autonomous body under the Quality Council of India (QCI) that provides formal accreditation to laboratories based on international standards. Under the new policy, periodic quality testing must be conducted through NABL-accredited laboratories to verify that medicines meet the standards laid down in the Indian Pharmacopoeia.