Cancer drugs to be spared duties

New Delhi, Nov 22 | Updated: Nov 23 2005, 06:30am hrs
As many as 42 cancer and Aids drugs, many of which are imported, are set to be substantially cheaper. The government is planning to fully exempt these from all central duties and also extend a 50% subsidy to all cancer drugs if sold through retail outlets in hospitals.

Prices of these drugs would, however, be fixed by the manufacturers/ importers after negotiations with the government. This will ensure that the consumer benefits fully from the tax waiver.

According to sources, the chemicals and fertilisers ministry has included these proposals in the new pharmaceutical policy being drafted. It has already estimated the financial cost of the tax breaks, which includes excise and customs/countervailing duty waivers, in consultation with the finance ministry.

At present, all cancer and Aids drugs are outside the price control mechanism. This is because no cancer or Aids drug (anti-retroviral) sold in the country individually meets the twin criteria for price control based on mass consumption and incidence of competition. Nevertheless, the prices of most of the cancer drugs are too high.

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At present, all cancer and Aids drugs are outside the price control mechanism
Under new policy, importers & manufacturers will have to negotiate prices with govt
Actual potential of the cancer drugs market is about Rs 3,500-4,000 cr

The total turnover of cancer drugs in the domestic market is Rs 300 crore. It is, however, reckoned that with 7 lakh people dying of various forms of cancer every year and many for want of medicine, the actual market potential is Rs 3,500-4,000 crore.

A new health insurance scheme that focuses on ensuring availability of medicines to the 26 crore below poverty line families would also be part of the new policy. As per the plan, the Centre would bear 90% of the premium cost, said the sources.

The government is expected to discuss the contours of the proposed policy with all the PSU insurance companies on November 24.

As FE had reported earlier, the chemicals and fertiliser ministry would propose to the finance ministry a 1% cess on all central taxes and levies to enhance fund available for the healthcare sector. The 1% cess is estimated to generate about Rs 3,200 crore.