Thiruvananthapuram: In a bid to drive down drug costs and plug supply gaps, Kerala is now planning to team up with other states to procure medicines for government hospitals through joint tenders. The Kerala Medical Services Corporation Ltd (KMSCL) will work with its counterparts in other states to take the proposal forward.

As part of the plan, Principal Secretary for Health Sharmila Mary Joseph held discussions with the Tamil Nadu Health Secretary, who also expressed interest in the proposal. Kerala also plans to rope in states with major pharmaceutical manufacturing units and organise a conclave of medical services corporation heads to work out the details.

According to officials, the savings from such arrangements could be substantial. For instance, Kerala currently pays ₹1.39 per albendazole tablet, used to treat worm infections, while Uttarakhand procures it for 89 paise. A joint tender with Uttarakhand could help Kerala secure the drug at the lower rate, with similar savings possible on other medicines as well.

The arrangement could also help Kerala tackle periodic drug shortages. Currently, medicines procured through KMSCL tenders are packaged for use exclusively in government hospitals in the state. Under a joint procurement arrangement, the labelling would have to be revised to indicate that the medicines are intended for government hospitals across the participating states.

Demand for certain medicines can surge during floods and other weather-related emergencies. By pooling procurement with other states, Kerala hopes to access supplies already procured by them instead of competing with other buyers for fresh supplies from manufacturers during a crisis.

Meanwhile, KMSCL will revise tender conditions that often keep smaller manufacturers out of the procurement process. Under the existing rules, bidders must have an annual turnover of at least ₹20 crore and furnish a security deposit of ₹5 lakh to secure a contract.

These requirements can deter manufacturers of essential medicines, particularly when the value of a contract is low. Some medicines may be worth just ₹2 lakh to ₹3 lakh in total, making a ₹5 lakh security deposit commercially unviable for suppliers. As a result, KMSCL has been sourcing medicines from other agencies when manufacturers are unable to participate in its tenders. The proposed changes aim to allow all manufacturers supplying quality medicines to compete for government contracts, widening the pool of eligible bidders.