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Low Cost Standard Therapeutics, or LOCOST, was set up to enable everyone, even the poor in remote areas, to access quality medicines at affordable prices
In the pharmaceuticals sector, the cost of manufacturing a drug is relatively low compared to the price it is sold at (see Profiteering in the pharma sector). By selling drugs at inflated prices, big companies and retailers pocket a large share of the money paid out by the consumer.
Low Cost Standard Therapeutics (LOCOST), founded in 1983, is a public, non-profit charitable trust registered in Baroda, Gujarat, which allows poor Indians to access drugs at affordable prices. LOCOST does not believe in making profits; any benefits are passed on to the consumer. For example Atenolol, a drug used to treat high blood pressure, is available at retail stores for Rs 20-25 a strip. LOCOST manufactures and sells the same strip of Atenolol 50 mg for Rs 3. A strip of paracetamol from LOCOST costs Rs 2; a well-known brand name like Crocin costs Rs 9.
LOCOST's small-scale manufacturing unit makes over 60 essential medicines in 80 formulations (liquid, capsule, tablet). The manufacturing procedure is relatively simple. Unlike bulk manufacturers, medicines at LOCOST are not made from the basic stages of chemical formulation. It buys the medicine in bulk, in powder form, from the bulk drug manufacturers, and then uses its own machines to formulate tablets, capsules and syrups. The organisation is extremely careful about the quality of the drugs it manufactures. It has an in-house quality-control laboratory where medicines are tested before being made available in the market. All drugs manufactured at LOCOST conform to the strict quality standards prescribed by the World Health Organisation (WHO).
LOCOST also pays its workers more than the regular wages; its wage scales are, in fact, the highest among the small-scale industries.
What's interesting is that despite all the expenses that go into maintaining a high standard, LOCOST is able to sell its drugs at one-fourth or one-tenth the price of drugs being sold in the retail market. "And we are making money, we are earning 10% profit on the drugs sold. So we are not a loss-making enterprise," says Dr Phadke.
LOCOST has been supplying drugs to over 100 civil society organisations (CSOs) for the past 23 years. The CSOs make them available to the poor. Besides Gujarat it has also managed to make inroads into Madhya Pradesh, Maharashtra and Karnataka and is slowly looking at expanding into other parts of the country.
Some of the civil society organisations which have availed of LOCOST's services and have been making these drugs available to the rural poor are Jan Swasthya Sahyog in Chhattisgarh, Dr Abhay Bang's Society for Education, Action and Research in Community Health (SEARCH), based in tribal-dominated Gadchiroli district of Maharashtra, SEWA- Rural (Society for Education, Welfare and Action - Rural) based in Jhagadia, a tribal area of Bharuch district of Gujarat, and TRU (Trust for Reaching the Un-reached) working in different parts of Vadodora.
The idea of making the LOCOST drugs available at various retail outlets is however a relatively new concept. Besides its manufacturing unit in Baroda, LOCOST has a retail store in Vadodara, a depot in Karnataka (Bangalore) and the Northeast (Guwahati) and small retail outlets in various parts of Maharashtra.
In Maharashtra, LOCOST has established itself in a number of remote regions. Aajara, a small taluka in Kolhapur district, is one, where people -- dam oustees and peasants -- live in extreme poverty and simply cannot afford to buy drugs prescribed by the local physician.
With help from a local organisation, LOCOST managed to make peasant leaders aware of the profiteering in the drugs industry. Dr Phadke says: "We told people in Aajara that if they did not insist on buying branded drugs prescribed by the local physician, and if they were ready to buy LOCOST drugs which are also of good quality, then we were ready to start a Centre in their taluka."
The villagers agreed and LOCOST, in turn, convinced a local drugstore to put its drugs up for sale along with the branded drugs. Doctors too were persuaded to prescribe relatively cheap LOCOST medicines to poor farmers. The experiment worked. Many patients are now able to buy the entire dose of medicines and complete their treatment without being burdened by exorbitant drug prices.
The decision to involve CSOs was taken in order to avoid going through retailers who snatch a huge share of the profits for themselves. "There are a number of CSOs and charitable organisations working with the poor. They are not interested in making money as they get funding from donor agencies. These organisations are our main clients," explains Dr Anant Phadke, a LOCOST trustee.
On May 15, 2005, LOCOST along with the Lok Vigyan Sangathan and Shankar Rao Bramhe Trust -- two civil society organisations -- set up the Lokayat Vaidyakeeya Kendra (Lokayat Medical Centre) in Pune.
The Centre, which is open from 6.30 pm to 8.30 pm, is not a drugstore but a clinic where people who come in with their prescriptions are examined and counselled about their disease before being given LOCOST medicines.
"At the Centre we conduct a preliminary examination and inform people about the need to visit their physician regularly while taking essential drugs...The response to the Centre has been overwhelming. In the last 33 days we have had around 216 patients," says consulting physician Dr Samir Mone.
Besides administering drugs for common ailments, the Lokayat Medical Centre also provides essential medicines to patients suffering from diabetes, hypertension, tuberculosis, anaemia etc. Noting the number of patients suffering from diabetes and hypertension, the Centre now plans to buy a glucometer -- a small, portable machine that can be used to check blood glucose concentrations -- to examine patients' blood sugar levels at a minimum cost of Rs 30.
LOCOST has also become involved in an initiative in the slums of Mangalwar Peth in Pune. Spearheaded by Dr Kalpana Jawalekar, with support from Janawadi Mahila Sangathan, a women's organisation, the project has opened a clinic in the slum that operates from 8 pm to 10 pm. Dr Jawekar charges patients a minimum of Rs 5-Rs 10 as consultation fees; LOCOST provides all the medicines stocked at the clinic.
-- Durga Chandran
Contact: Mr Krishna
-- Production Manager
-- 85, GIDC Estate
-- POR - Raman Gamdi
-- NHW 8, Dist Vadodara
-- Gujarat- 391243
-- Ph: 0265- 2830009
-- email Chinu Srinivasan:
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-- http://www.locostindia.com/
InfoChange News & Features, July 2005
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