Union Budget 2024-25 wish list: Expectations from health, pharma sector 

As the Union Budget 2024-25 approaches, leaders in the healthcare and pharmaceutical sectors are advocating for strategic measures to drive growth, innovation, and accessibility. The Indian pharmaceutical industry, aiming to reach USD 120 billion by 2030, urges the government to implement policies that will boost quality, innovation, and investment.

INDUSTRY PERSPECTIVES ON POLICY DIRECTION

“The Indian pharmaceutical industry has significantly impacted global health by supplying affordable and quality medicines. The policy direction should leverage the industry’s knowledge-driven foundation and its global manufacturing stature,” said Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance. Jain emphasised on the need to focus on quality and innovation, given the inherent challenges of research.

“Research involves high risk, long development periods, and low success rates; continuous investment is crucial. The 2024-25 Budget should introduce policies offering direct and indirect tax benefits to encourage research and investment, positioning India as a global quality benchmark,” Jain added.

SECTORAL PRIORITIES, STRATEGIC RECOMMENDATIONS

Experts have also highlighted the critical role of the diagnostics sector in India’s growth trajectory. “The diagnostics sector is vital for early disease detection and treatment customisation, essential for India’s growth. We urge the government to prioritise optimising Public-Private Partnership (PPP) models to ensure high-quality outcomes,” said Ameera Shah, Executive Chairperson and Whole Time Director of Metropolis Healthcare Limited.

Shah emphasised the need for increased funding for screening and diagnostic programs targeting Non-Communicable Diseases (NCDs) such as cancer and cardiac ailments, and advocated for investments in training healthcare professionals.

Shah also proposed specific measures for sector improvement. “Implementing a 0% GST on diagnostic services and facilitating refunds for GST paid on input tax credits can reduce costs and improve accessibility. Lowering customs duty on imported diagnostic equipment and adjusting high GST rates on lab supplies will foster R&D investments. These initiatives will significantly contribute to providing accessible, high-quality healthcare for all. We look forward to collaborating with the government to address these priorities,” she added.

STRATEGIES FOR R&D AND INNOVATION

The pharmaceutical industry has proposed a comprehensive series of recommendations aimed at propelling research and development (R&D) and innovation within India’s pharmaceutical industry.

“We commend the government’s efforts to enhance quality healthcare and are optimistic about the continued reforms and policies aimed at bolstering innovation and streamlining regulatory processes,” said Anil Matai, Director General of the Organisation of Pharmaceutical Producers of India (OPPI).

To accelerate R&D and foster innovation, Matai recommends that the government explores avenues to incentivise R&D investments. His proposals include deductions on R&D expenses, research-linked incentives for multinational corporations, and corporate tax concessions.

“Recognising the high-risk, long-gestation nature of R&D, we suggest extending the scope of section 115BAB of the Income Tax Act, 1961, to companies solely engaged in pharmaceutical research and development and providing a 200% deduction rate on R&D expenditures,” he added. “This would significantly boost our ability to undertake essential research and development, including clinical trials and patent registration,” he further said.

Matai stressed the crucial role of a robust intellectual property rights regime to stimulate growth and encourage research-based pharmaceutical companies--both global and Indian--to introduce innovative therapies in India. He advocated for incentives for centres and companies that offer specialised training programs for pharmaceutical employees, promoting growth and continuous professional development in the sector.

Focusing on rare diseases, Matai calls for increased incentives for developing treatments, enhanced management through more Centres of Excellence (CoEs), greater budget allocations for R&D on rare disease therapies, and import duty waivers. “Expanding the list of life-saving drugs eligible for GST/import duty exemptions, including all oncology medications, will further improve patient affordability,” he highlighted.

To align with the Atma Nirbhar Bharat (self reliant India) initiative and attract investment, Matai suggested providing incentives for investments in bonds issued by pharmaceutical companies. “We look forward to the government’s continued support and strategic initiatives to foster a robust and innovative pharmaceutical sector in India,” said Matai.

CHALLENGES AND REFORM IMPERATIVES

In a meeting with Finance Minister Nirmala Sitharaman, the PHD Chamber of Commerce and Industry (PHDCCI) presented their Pre-Budget Memorandum for the 2024-25 Union Budget, stressing the need to enhance India’s health infrastructure. Dr. Deep Goel, Chair of the Health Committee at PHDCCI, outlined the deficiencies in the healthcare system revealed by the Covid-19 pandemic, emphasising the crucial need for increased government expenditure on public health and rectifying disparities in affordable healthcare access across regions.

“Covid-19 has highlighted significant weaknesses in our healthcare system,” remarked Dr. Goel. “There is an urgent requirement to invest in a skilled healthcare workforce comprising doctors, nurses, lab technicians, and pharmacists. We advocate for measures to balance the availability of healthcare facilities, improve medical education in underserved states, and adopt technological advancements.”

The PHDCCI memorandum also called for strategic resource allocation to expand healthcare facilities and incentivise healthcare professionals, proposing the establishment of well-equipped primary healthcare centres and government hospitals, particularly at the Tehsil/Block level.

Similarly, Dr. Raj Nagarkar, MD & Chief of Surgical Oncology & Robotic Services at HCG Manavata Cancer Centre, articulated several focal points for increased healthcare funding. He highlighted the necessity of a significant boost in the healthcare budget to enhance infrastructure and services, catering to an ageing population and increasing chronic disease rates.

“There are notable disparities between urban and rural healthcare,” noted Dr. Nagarkar. “We advocate for improved rural services such as telemedicine and mobile health units to bridge this gap.”

Moreover, Dr. Nagarkar stressed the role of public health programs targeting malnutrition, maternal and child health, cancer, and infectious diseases. He insisted on investment in medical education and training programs to address the shortage of healthcare professionals. Further, he supported the integration of technology in healthcare, expansion of health insurance coverage for economically vulnerable populations, and proactive government support for private healthcare.

“Given the rising cases of mental health disorders, there should be an increased focus on mental health services,” urged Dr. Nagarkar.