"In what would be a landmark increase in the Indian government's spending on public health, New Delhi is completing a proposal to provide hundreds of essential drugs free to patients in government-run hospitals and clinics at a cost of nearly $5 billion over five years, officials said Thursday," Vikas Bajaj wrote in The New York Times.

"The proposal, which could receive government approval next month, would try to fill a gaping hole in the provision of health care at state-owned hospitals, many of which require patients to buy their own drugs, including substances as basic as intravenous fluids," Mr. Bajaj wrote.

Specialists say "it could also be the first step toward a more comprehensive universal health care system in India," which, with 1.2 billion people, is the world's most populous country after China, he wrote.

Drugs account for more than 70 percent of out-of-pocket medical costs for Indians. Government hospitals and clinics provide free or low-cost care, but most of them struggle to keep up with demand, and the quality of care can be poor.

For Western drug makers, which have long chafed at India's comparatively weak protection of their patents, the government's plan could be another blow. Although they only have a tiny share of the Indian market, Western drug companies are looking at India and other emerging markets as a vital source of growth as sales flatten in the United States and Europe. Under the proposal, the government would only buy cheap generic versions of drugs, making it more difficult for brand-name drugs to be sold.

The policy move is part of India's stated goal of increasing spending on health care to about 2.5 percent of its gross domestic product from about 1.4 percent. By contrast, the Chinese government spent about 2.3 percent of its G.D.P. on health care in 2009 and Sri Lanka spent about 1.8 percent.