Rs 105 billions squandered: Free medicine budget runs out while citizens go without medicine
KATHMANDU: Abhimanyu Nepal, a 37-year-old resident of Kavresthali in Ward 2 of Tarakeshwor Municipality, Kathmandu, says his father, who has long been on medication for high blood pressure and cholesterol, is now struggling to access essential drugs.
The blood pressure medicine Amlodipine, once freely distributed by the Kavresthali Primary Health Center, has been unavailable for the past three months. “The medicine that the government claims to provide for free and must be taken regularly is nowhere to be found. We and other locals are forced to buy it from private pharmacies,” he said.
Sitaram Dahal of Chandrapur in ward 5 of Mahankal Rural Municipality, Lalitpur, is a diabetic patient. He was receiving medicines like ‘Glimepiride’ and ‘Metformin’ for free from the health post. But he shares that he has had to buy them for the past four years, as they are no longer available. Living a livelihood through farming, he is currently spending more than Rs 1,000 per month from his own pocket to buy medicines. However, the government’s policies, programs, and budget still show that these medicines are being distributed for free to patients like them suffering from high blood pressure and diabetes.
The policy provision for the government’s free medicine distribution program was made by the Interim Constitution of 2007. After that, in 2009, the government launched the Basic Health Services program and started distributing 40 types of medicines. With the budget of the fiscal year 2022/23, the government provisioned the free distribution of 98 types of medicines through government health institutions.
In 2021, the government introduced the treatment protocol for basic health services to ensure the free provision of basic health services and uniformity in treatment and services from government health institutions across the country. As the Constitution of Nepal, 2015, ensures that every citizen receives free health service, the provision was made to provide free medicines by creating a Standard Treatment Protocol (STP) based on basic health services. The protocol states that 98 types of medicines for various diseases are to be provided free of cost from basic hospitals/primary health centers and basic health centers/health posts.
However, most of these medicines are not available in the majority of health institutions. Some of these medicines are those that patients with chronic diseases must take regularly. This shows that the government is failing to even provide basic health services. Patients report that they are forced to buy the medicines that are supposed to be free from private clinics at expensive rates. This has added a financial burden on working-class citizens.
Protocol not implemented
The STP created by the government mandates that 98 types of medicines should be made available free of cost from the health posts, primary health centers, and basic hospitals in 6,743 wards of 753 local-level units across the country. The protocol includes a list of nine service areas to be provided under basic health services, as per the Public Health Service Regulations, 2020. This also includes the list of medicines to be provided free of cost.
As per the list, 91 out of the 98 types of medicines are available for free at the Health Post, which is the Basic Health Center, while all 98 types of medicines are available at Basic Hospitals, including Health Centers and Municipal Hospitals.

Even before this protocol was issued, the government was providing 70 types of medicines through health institutions under the program to provide free basic health services. Under that, 35 types of medicines were available for free from Health Posts, 58 from Primary Health Centers, and 70 from District Hospitals. According to the new protocol, 98 types of medicines must be available at health institutions 24 hours a day. Otherwise, the health institution is subject to punishment as per the Public Health Service Act and Regulations.
The government increased the number to 98 by adding and modifying the list of medicines, taking into account diseases and problems in a timely manner. Some unnecessary medicines from the previously available 70 types have been removed, while medicines used in the treatment of non-communicable diseases, mental illnesses, and other health issues have been added.
Although the new protocol has broadened the scope of free medicines, the distribution system has proven to be unsuccessful in practice. Even though the law mandates that 98 types of medicines must be available 24 hours a day, citizens are not only failing to receive them regularly, but they have also been facing the scarcity of these medicines for months and years. The situation is similar in the case of local hospitals, not just health posts.
A budget exists; medicine does not
According to the data from the Curative Services Division of the Department of Health Services, the federal government spends around Rs 1.5 billion annually to distribute 98 types of medicines for free. This amount is disbursed to the provincial and local level governments.
For the purchase of free medicines, the federal Ministry of Finance has allocated Rs 6.5 billion to the 753 local-level units over the past six years, starting from the fiscal year 2019/20. While Rs 1.43 billion was allocated for the last fiscal year, 2024/25, this amount has been increased to Rs 2.60 billion for the current fiscal year, 2025/26. However, the necessary medicines are not available in provincial hospitals and the basic health centers, primary health centers, and municipal health promotion centers under the local levels, according to their needs.
According to the Curative Services Division of the Department, in the current fiscal year, a budget of up to Rs 1.4 million has been allocated for Rural Municipalities, some Rs 2.4 million to Rs 2.5 million for Municipalities, and Rs 4 million to Rs 5 million for Sub-Metropolitan Cities under the free medicine title. However, Public Health Inspector Kamlesh Kumar Mishra of the Curative Services Division of the Department of Health Services explains that the conditional grant (grant under basic and emergency services) going to the local and provincial levels has decreased for the past two years due to the reduction in the federal budget, which has created problems in purchasing free medicines in most local bodies.
According to Mishra, the federal government currently purchases 23 types of medicines. Similarly, the provincial government has to purchase 56 types of medicines, and the local levels have to purchase 66 types themselves. However, Mishra states that due to insufficient budget, they are not in a position to purchase the medicines intended for free distribution.
The Curative Services Division of the Department is responsible for monitoring the availability of free medicines. But Public Health Inspector Mishra of the Division explains that since the provincial and local levels themselves purchase and send the free medicines to the health institutions, the central government has not prioritized monitoring. On the other hand, he says that they have not been able to monitor everywhere due to the lack of sufficient budget. He says, “With the budget allocated for monitoring, it is only possible to visit a maximum of 25 to 30 health institutions throughout the year; there is also insufficient manpower for monitoring.”
Mishra says the project has faced additional challenges since the transfer of Division Chief Dr. Sudha Devkota some three months ago.
Even big hospitals do not provide them
After the implementation of federalism, with the formation of three tiers of government, health posts have become basic health centers. Primary health centers have become basic hospitals. According to the government’s ‘Standard Treatment Protocol,’ patients should receive 98 types of medicines free of cost and easily at government and basic health institutions. However, the country’s major government hospitals do not even provide this facility.
The protocol mentions that even large hospitals should provide the specified medicines for free in coordination with the local levels. But this arrangement for citizens’ health facilities has been neither implemented by the hospitals nor given attention by the concerned local levels.
Major government hospitals in the federal capital Kathmandu that see a crowd of impoverished citizens for treatment, such as Bir Hospital, Tribhuvan University Teaching Hospital, Patan Hospital, and the Trauma Center, have almost all the medicines that the government has instructed to distribute for free. However, these hospitals state that they cannot provide them to patients for free because the local governments have not provided the funds. Even the government’s decision to provide 70 types of medicines for free before the protocol was formed in 2021 was not fully implemented. Citizens are also unaware of exactly which medicines are available for free.
Spokesperson for Tribhuvan University Teaching Hospital, Dr. Gopal Sedhain, states that they have not been able to provide the medicines to patients for free because the Curative Services Division of the Department of Health Services does not provide them. He says, “Despite our attempts to initiate coordination with the local levels through the Division, there has been no interest. We have not been able to provide them for free due to a lack of budget.”
Public Health Expert Dr. Mahesh Maskey states that arrangements for free medicine should be made immediately in the large government hospitals of Kathmandu due to the high patient load. He says, “Since people from remote areas come to the hospitals here, if free medicines can be easily made available, many citizens will benefit.”
Health expenses increasing poverty
A study has shown that annually, more than 574,000 citizens in Nepal are falling below the poverty line due to expensive healthcare costs. According to the World Health Organization (WHO), 574,294 Nepalis are pushed below the poverty line every year due to out-of-pocket health expenses.
The WHO South-East Asia Region report, ‘Progress on Universal Health Coverage and Health-Related Sustainable Development Goals,’ 2022, mentions that 3 million people face financial hardship for healthcare every year. The report states that 10.7 percent of citizens have to spend 10 percent of their income on treatment.
According to data listed in the 10-year distribution policy of the Ministry of Health and Population, 57.2 percent of health expenses in Nepal are out-of-pocket. Of this, 75 percent is spent only on pharmaceutical products. Studies have shown that a lack of government support for treatment, and especially for pharmaceutical products, is pushing the general public towards poverty.
The government is running programs like health insurance, healthcare for impoverished citizens, free medicines, and other basic health services through social health protection measures to reduce the rate of out-of-pocket expenses. However, public health expert Dr. Maskey states that the social health protection programs currently in operation have not been effective. He says, “This has kept citizens far from accessing easily available and free health services.”