NEW DELHI, India – India is moving ahead with plans to spend 266 billion rupees ($5.61 billion) to supply free drugs to patients at public hospitals, AFP reported Friday (July 6th).

The government will pay 200 billion rupees ($3.61 billion), while India's 29 states will be asked to contribute a further 66 billion rupees ($1.2 billion) for the plan, which is part of the government's 2012-2017 spending programme and is expected to begin in October.

"This new initiative, if approved ... would be a giant step in vastly expanding the access to medicines," Ministry of Health joint secretary Arun Panda said in a statement.

The five-year plan is set for formal approval next month but has already received its first allocation of 10 billion rupees from the planning commission for 2012-13.

Prime Minister Manmohan Singh has already asked the health ministry to set up a central procurement agency to obtain the drugs in bulk.

Along with patients, the big winners will be India's booming generic drug companies, such as Ranbaxy, Dr Reddy's and Cipla. The programme has excluded international pharmaceutical giants, as it only will offer cheaper generic versions of branded drugs.