EU Budget 2024-2025 Wish List: Expectations for the Healthcare and Pharmaceutical Sectors

As the Union Budget 2024-25 approaches, healthcare and pharmaceutical leaders are advocating for strategic measures to drive growth, innovation and access. The Indian pharmaceutical industry, which aims to reach $120 billion by 2030, is calling on the government to implement policies that will boost quality, innovation and investment.

INDUSTRY PERSPECTIVES ON POLICY DIRECTION

“The Indian pharmaceutical industry has made a significant contribution to global health by providing affordable and high-quality medicines. Policy direction should leverage the industry’s knowledge base and global manufacturing strength,” said Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance. Jain stressed the need to focus on quality and innovation, given the inherent challenges in research.

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

SECTORAL PRIORITIES, STRATEGIC RECOMMENDATIONS

The experts also highlighted the critical role of the diagnostics sector in India’s growth trajectory. “The diagnostics sector is essential for early detection of diseases and tailoring treatment, which is essential for India’s growth. We urge the government to prioritize optimizing public-private partnership (PPP) models to ensure high-quality outcomes,” said Ameera Shah, Chairperson and Whole-Time Director, Metropolis Healthcare Limited.

Shah stressed the need to increase funding for screening and diagnostic programmes for non-communicable diseases (NCDs) such as cancer and heart disease, and advocated investment in training of health personnel.

Shah also suggested specific measures to improve the sector. “Introducing 0% GST on diagnostic services and facilitating refunds of GST paid on input tax credits can reduce costs and improve accessibility. Reducing customs duty on imported diagnostic equipment and adjusting high GST rates on laboratory supplies will encourage investment in research and development. These initiatives will go a long way in ensuring accessible, quality healthcare for all. We look forward to working with the government to address these priorities,” she added.

R&D INNOVATION STRATEGIES

The pharmaceutical industry has proposed a comprehensive set of recommendations aimed at boosting research and development (R&D) and innovation in the Indian pharmaceutical industry.

“We appreciate the government’s efforts to improve the quality of healthcare and are optimistic about the continuous reforms and policies aimed at strengthening innovation and streamlining regulatory processes,” said Anil Matai, Director General, Organisation of Pharmaceutical Manufacturers of India (OPPI).

To boost R&D and support innovation, Matai recommends that the government explores ways to encourage R&D investment. His proposals include R&D expense deductions, research-related incentives for multinationals, and corporate tax breaks.

“Recognizing the high risk and long duration of R&D, we suggest extending the scope of Section 115BAB of the Income Tax Act, 1961 to companies engaged solely in pharmaceutical R&D and providing 200% deduction rate on R&D expenses,” he added. “This would significantly enhance our ability to undertake necessary R&D including clinical trials and patent registrations,” he added.

Matai stressed the crucial role of a strong intellectual property rights regime in driving growth and encouraging research-based pharmaceutical companies, both global and Indian, to introduce innovative therapies in India. He advocated for incentives for centres and companies that offer specialist training programmes for pharmaceutical workers, promoting growth and continuous professional development in the sector.

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

To align with the Atma Nirbhar Bharat (Self-Reliant India) initiative and attract investments, Matai suggested providing incentives for investing in bonds issued by pharma companies. “We look forward to continued government support and strategic initiatives to foster a strong and innovative pharma sector in India,” Matai said.

CHALLENGES AND NEEDS OF REFORM

In a meeting with Finance Minister Nirmala Sitharaman, the PHD Chamber of Commerce and Industry (PHDCCI) presented its Pre-Budget Memorandum for the Union Budget 2024-25, emphasising the need to strengthen healthcare infrastructure in India. Dr Deep Goel, Chairman, Health Committee, PHDCCI, outlined the shortcomings in the healthcare system exposed by the Covid-19 pandemic, emphasising the critical need to increase government expenditure on public health and bridge the disparities in access to affordable healthcare across regions.

“Covid-19 has exposed significant weaknesses in our healthcare system,” Dr. Goel noted. “There is an urgent need to invest in a skilled healthcare workforce consisting of 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 advances.”

The PHDCCI memorandum also called for strategic allocation of resources to expand health facilities and create incentives for health workers. It proposed setting up well-equipped primary health centres and government hospitals, especially at the Tehsil/Block level.

Similarly, Dr. Raj Nagarkar, MD and Head of Oncology Surgery and Robotic Services at HCG Manavata Cancer Centre, shared several focal points for increasing healthcare funding. He highlighted the need for a significant increase in healthcare budget to improve infrastructure and services, meeting the needs of an ageing population and rising rates of chronic diseases.

“There are significant 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.”

Dr. Nagarkar further emphasized the role of public health programs targeting malnutrition, maternal and child health, cancer and infectious diseases. He urged investment in medical education and training programs to address the shortage of health workers. He further advocated integration of technology in health care, expansion of health insurance for economically vulnerable groups and proactive government support for private health care.

“Given the rising incidence of mental health disorders, more emphasis needs to be given to mental health services,” urged Dr Nagarkar.