Having set the biotech revolution with new business models, the industry has recommended that biotech products manufactured in the country be given a two-year moratorium from price control under National Pharmaceutical Pricing Authority (NPPA) to provide sufficient time to scale-up production and streamline costs.
In a representation made by the Association of Biotech-led Enterprises (ABLE), the industry has analysed that the present requirement for approval from NPPA, prior to launch, leads to substantial delay in the launch of the product. ABLE has recommended that R&D expenditure incurred on biotech products be permitted for amortization in computing costs for the purposes of price fixation.
Some of the other demands include the current provision for a 150% weighted tax deduction until March 31, 2007, u/s 35 (2AB) for R&D expenditure incurred by DSIR-recognised research laboratories, has been a great boon to incremental R&D investment. The industry has demanded weighted deduction be increased to 200% and the scheme be extended for a further period of eight years ie up to March 31, 2015. Besides, in order to acquire more technologies, the industry has recommended that import of technology by the biotech sector be exempt from withholding tax for a period up to 2010. Currently, lending to the agri-business sector as well as to venture funds is categorised as priority sector lending. Similarly, it is therefore recommended that lending to the biotechnology sector be categorized as priority sector lending. Industry experts feel that there exists a serious anomaly with respect to imported and indigenous life saving drugs and diagnostics wherein raw materials and components used by indigenous manufacturers for such products are levied customs duty and excise duty whereas the finished products are allowed to be imported duty free.
“This is detrimental to indigenous manufacturing and instead encourages trading. Further more, it puts indigenous manufacturers at an unfair disadvantage to MNC competition,?? say industry analysts.
ABLE has also recommended that components and raw materials used by indigenous m manufacturers for production of diagnostics and life saving drugs are exempt from excise and custom duty based on standard input/output norms certified by the Department of Biotechnology or alternatively duty paid on components and raw materials used in manufacture of life saving drugs be eligible for refund.
Besides, the industry has requested an exemption from customs duty on the import of anti-cancer drugs and from excise duty on the manufacture of the drug, be granted by including such anti-cancer drugs. Anti-cancer drugs like monoclonal antibodies can be used in the treatment of various tumors. The impact of custom s duty at 12.5%, excise/ CVD at 16.32%, education cess at 2% and additional duty on custom s at 4% would result in a 36.74% increase in the price of the drugs, thereby increasing the cost of treatment substantially. The industry has also called for duty exemption on diagnostic kits.
Meanwhile, the industry has also called for a provision of a central fund of Rs 200 crore to compensate states that provide subsidy, especially to provide transgenic seeds. The transgenic seeds today are priced at about 3-4 times the price of the non-transgenic counterpart. This high price is due to the investments it takes in developing/in licensing the technology and the high regulatory costs that commercialization of such technologies entails.
