On 15 January 2026, the Government of India announced a new Drug Procurement Policy for the Central Government Health Scheme (CGHS), which has long been awaited to introduce a change in the way medicines are procured, supplied and monitored. The policy aims at enhancing the supply of medicine, quality, and minimising the supply disruptions in CGHS Wellness Centres. This revision is not only an administrative reform to lakhs of beneficiaries who rely on CGHS to receive regular treatment, but it has a direct impact on the daily access to healthcare, its reliability, and safety.

Background and Need for the CGHS Drug Procurement Policy

The Central Government Health Scheme has been steadily growing over the years, with a beneficiary population of approximately 42 lakh people spread across 81 cities with approximately 350 Wellness Centres. As this growth came with it were more strains on the current medicine procurement systems, most of which were based on fragmented purchasing and local systems. Such practices frequently resulted in the unequal distribution, sluggish deliveries, and unnecessary reliance on commercial chemists.

Over the last few years, the increasing use of medicine, the frequent changes in treatment regimes, the necessity to control costs, etc. demonstrated the drawbacks of ad-hoc procurement. Wellness Centres were also faced with the problem of demand forecasting, and authorities were not given a real-time insight into stock quantities and expiry risk. The beneficiaries, on the other hand, were left in a state of uncertainty where the prescribed medicines were not easily obtained.

With these challenges realised, the Ministry of Health and Family Welfare resolved to implement a structured technology-based policy that is structured. The aim was to establish a standard procurement system that is affordable yet of quality, enhances the supply chain, and introduces accountability to all processes between purchase and delivery to patients.

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Objectives of the CGHS Drug Procurement Policy, 2026

The CGHS Drug Procurement Policy, 2026, is created to enhance the management of medicine under CGHS by filling the gaps in the supply, governance and quality concerns. The policy aims at establishing a stable, transparent, and patient-centric procurement process that will promote a consistent healthcare delivery in all CGHS Wellness Centres.

• Assured medicine availability: The policy will ensure that the essential medicines are always available at CGHS Wellness Centres, treatment will not be interrupted, beneficiaries will not visit the facility so frequently, and reliance on pharmacies to obtain the prescribed medication will be reduced.
• Transparent procurement system: It creates standard procurement processes that minimise discretionary purchasing, enhance traceability, and make all procurement processes subject to approved rules and subject to audit by appropriate means.
• Demand-driven planning: The policy will be based on the real trends of medicine usage, which will allow making accurate forecasts, eliminating frequent shortages, and eliminating unnecessary overstocking with subsequent waste or expiry.
• Cost-effective procurement: The policy aims to maximise the expenditure on public healthcare by encouraging bulk purchase of widely prescribed generic medicines, but the medicines must be safe, effective, and suitable for long-term patient use
• Quality and safety control: The policy imposes high-quality standards to ensure that only those medicines produced according to the accepted regulatory norms are purchased and distributed via the CGHS system.
• Improved governance oversight: It enhances coordination and monitoring within CGHS units through the integration of transparency in procurement regulations with electronic systems that facilitate informed decision-making at the regional and central levels.

Key Features and Procurement Framework under the New Policy

The new CGHS Drug Procurement Policy presents a simple and consistent procurement framework to substitute the inconsistent practices. It highlights the process of selecting, sourcing, and supplying medicines, which are reliable, accountable and consistent across all the CGHS Wellness Centres.

• Generic medicine preference: The policy is based on bulk buying of generic medicines to enhance affordability, but only in response to a valid prescription given by the government or CGHS-empanelled health institutions.
• Formulary-led procurement: All medicine procurement is directed by the CGHS Formulary, which is regularly revised to incorporate accepted treatment regimens and changing clinical needs throughout CGHS facilities.
• Authorised procurement sources: Medicines are purchased by authorised channels like MSO, PMBI, CGHS rate contracts, and public sector undertakings, eliminating ad-hoc or decentralised purchases.
• Restricted medicine controls: There are restricted medicines that are only available under special rate contracts or individual approvals, which provide a more rigorous control and limit their use.
• Regulated local purchases: Local buying of medicines by approved chemists is only allowed under the condition that medicines are not available at Wellness Centres, and is considered a monitored and additional facility.
• Eligibility and exclusions: Only drugs that have passed the prescribed regulatory and manufacturing standards can be procured, with non-permissible products, including supplements, cosmetics, and devices, being excluded.

Role of HMIS in Ensuring Transparency and Supply Chain Efficiency

The new CGHS procurement framework is supported by the Healthcare Management Information System, which transforms routine medicine data into actionable insights and enhances visibility, coordination, and control throughout the whole supply chain. The role of HIMS includes:

• Livestock Tracking: HMIS displays real-time stock positions at each Wellness Centre, enabling staff to identify shortages early and initiate replenishment before patient services are disrupted.
• Accurate demand forecasting: By capturing actual dispensing data, HMIS supports realistic demand projections, helping authorities plan procurement volumes based on real usage rather than estimates.
• Expiry Management: This system tracks shelf life and notifies centres of expiries nearing to enable timely rotation or redistribution of medicines to minimise wastage and financial loss.
• Inter-centre Coordination: HMIS allows the redistribution of stocks between Wellness Centres, so that medicines are transferred to the areas where they are most required, and the overall usage is better across centres.
• Layered Oversight: Structured reviews through HMIS facilitate daily centre-level assessments, periodic regional reviews, and central reviews, enhancing accountability across the CGHS supply chain.

Impact of the Policy on CGHS Beneficiaries and Healthcare Delivery

For CGHS beneficiaries, the 2026 Drug Procurement Policy would translate into real-life gains in terms of daily healthcare access and trust.

• It is anticipated that medicines will be more readily available at Wellness Centres, eliminating the need to visit the facility repeatedly and rely on personal purchases.
• Increased utilisation of quality-assured generic drugs assists in regulating the cost of treatment without compromising the therapeutic efficacy.
• Greater quality checks enhance patient safety and minimise the chances of getting poor quality or almost expired drugs.
• The open procurement and monitoring systems will improve confidence in CGHS services and minimise administrative ambiguity.
• Better supply chain planning enables physicians to prescribe more confidently since medicines have a higher chance of being available.

Conclusion

The CGHS Drug Procurement Policy, 2026, is a turning point towards an organised, responsible, and patient-centric healthcare provision in the Central Government Health Scheme (CGHS). The policy fills the long-standing gaps that had been experienced in medicine availability and reliability by integrating bulk procurement, high standards of quality, and technology-based monitoring. Furthermore, it puts the welfare of the beneficiaries at the core of the procurement decision as opposed to medicines being treated as inventory. The actual worth of this policy will be quantified in the number of shortages reduced, safer medications, and increased trust in millions of people who turn to CGHS to meet their healthcare requirements.