Budget 2024: Finance Minister Nirmala Sitharaman will present the Interim Budget 2024 on February 1. Ahead of the Interim Budget 2024, the Pharmaceutical industry emphasised on the need to strengthen the nation’s healthcare infrastructure and bolster research and development (R&D) in the sector.
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Nikhil Chopra, CEO & Whole Time Director, JB Pharma, said that India faces an increasing disease burden, demanding a sustained and strategic healthcare focus.
“The government’s recognition of this pressing reality and its consistent efforts to strengthen the nation’s healthcare infrastructure, has been commendable. The upcoming budget is anticipated to mirror this commitment. An allocation of about 2.5%-3% towards healthcare is crucial to support the industry cater to the growing healthcare needs of India. In our pursuit of self-sufficiency and reduced dependency on imports, undertaking well-crafted measures to streamline the Production Linked Incentive (PLI) emerges as a crucial catalyst to ensure that the industry is motivated to leverage this opportunity, for the growth of indigenous pharmaceutical manufacturing. This strategic move holds the potential to enhance our competitiveness globally, effectively address pricing challenges, and contribute significantly to the nation’s economic resilience,” Chopra said.
V.S. Mani, Executive Director & Global Chief Finance Officer, Glenmark Pharmaceuticals Ltd. said that the move towards introducing centres of excellence in the pharmaceutical sector promises to drive the industry-academia relationship in the right direction.
“Promotion of Research and Innovation in the Pharma MedTech Sector (PRIP) as well as the successful Production Linked Incentive Scheme demonstrate the government’s unwavering commitment to fostering self-reliance in India. Going ahead, the focus needs to be on retaining the skilled workforce and introducing robust initiatives that incentivize top scientific talent,” Mani said.
Meanwhile, Nikkhil K Masurkar, CEO, Entod Pharmaceuticals highlighted that as a pharmaceutical company, we anticipate a favorable environment in the Union Budget 2024-25, with a heightened focus on bolstering research and development (R&D) in the sector.
“The government’s commitment, as demonstrated through the recent policy launched in September, underscores a strategic shift towards positioning India as a high-value player in the global pharmaceutical market. The allocated capital outlay of Rs 5,000 crore, with a dedicated budget of Rs 4,250 crore for research in priority areas, reflects a strong financial commitment to fostering innovation in pharmaceuticals. We look forward to continued government support, expecting these initiatives to enhance the R&D capabilities of the $50-billion pharma sector, contributing to sustained growth and global competitiveness,” Masurkar said.
With the pharmaceutical industry ranking as the world’s third-largest by volume, the potential growth trajectory of reaching $120-130 billion over the next decade is contingent on sustained innovation and discoveries.
“The inclusive financial assistance for entities of varying sizes, from large corporations to startups collaborating with government institutes, signals a comprehensive approach to supporting research endeavors. As we await the budget announcement, we remain optimistic that the proposed measures will further catalyze research and development, positioning the industry for a value-led future growth trajectory,” he said.
Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance said that the India has played a pivotal role in shaping global health outcomes by providing affordable quality-assured medicines.
“Today, the Indian pharmaceutical industry is at the cusp of change. The Indian pharma sector aims to achieve USD 120–130 by 2030 and USD 400-450 by 2047. To achieve this vision, the Union Budget 2024-25 should accelerate the pace of innovation and R&D. The announcement of the Promotion of Research & Innovation Program (PRIP) Scheme in 2023 was a positive step to spur innovation. Given the high risk, long gestation period and low success rate in research, there is a need for continuous investments. Therefore, the budget 2024-25 should outline conducive policies that provide benefits in terms of both direct and indirect taxes and also facilitate ease of doing business for the pharmacos,” Jain said.
The year 2024 is likely to witness the initial results of the various initiatives to augment India as a reliable supplier of medicines, Jain pointed out.
“Policy stability and continuity will be fundamental to propel the sector’s growth. India is poised to move to “Discover and Make in India” from “Make in India”, making India the custodian of healthcare of the world,” he added.
Saransh Chaudhary, President, Global Critical Care, Venus Remedies Ltd, and CEO, Venus Medicine Research Centre (VMRC) explained that the upcoming Union Budget 2024-2025 will determine how well India progresses with regard to achieving its stated objectives of becoming the ‘Pharmacy to the World’ and embracing ‘OneHealth’ principles.
“The government must continue incentivizing R&D and manufacturing to boost growth and innovation in the industry, something which was particularly evident in the Promotion of Research and Innovation in Pharma Med-Tech Sector (PRIP) scheme from the previous budget. The second component of the PRIP scheme, with an allocation of Rs 4,250 crore, focused on research in the pharmaceutical sector, especially in six priority areas including antimicrobial resistance (AMR). A continued emphasis on prioritizing antibiotic research is crucial to help address the growing challenge of AMR,” Chaudhary said.
We suggest exploring innovative economic models to incentivize antibiotic research, recognizing the unique challenges associated with it, he said.
“Market entry rewards and delinked subscription models could be considered to encourage pharmaceutical companies to invest in the development of new antibiotics. This strategic approach aligns with the goal of fortifying India’s position as a global pharma leader and addressing pressing healthcare challenges, including AMR. Additionally, sustained efforts to address rising input costs, particularly the steep hike in Active Pharmaceutical Ingredient (API) prices are imperative,” he added
According to Chaudhary, Incentives for domestic API manufacturers, coupled with a reduction in GST and import duty on APIs, would significantly enhance industry’s sustainability.
“The establishment of Special Economic Zones (SEZs) for research, exempted from GST, merits serious consideration. The continuation of the Research-Linked Incentive scheme and tax exemptions for materials procured for R&D purposes is crucial for creating a conducive ecosystem that enables R&D-driven pharma companies in India to compete globally,” he said.
Finally, the government must prioritize funds for digital integration in pharma supply chain, ensuring better access and uninterrupted deliveries in real time, since this is crucial for healthcare transformation, he added.
Dr. Krishna Prasad Chigurupati, Chairman & Managing Director of Granules India Limited said that India’s pharmaceutical sector has rightfully earned the title ‘pharmacy of the world,’ thanks to its extensive production of generic medications. The industry is now poised for a transformative leap – evolving into a global hub for innovative products and sustainable pharmaceutical manufacturing.
“To realize this vision, the Indian government needs to implement focused strategies. These include creating innovation zones offering incentives and infrastructural support, encouraging public-private partnerships to combine expertise and resources, and boosting funding for advanced drug research and development. Streamlining regulatory pathways to expedite approvals for novel treatments and investing in educational initiatives to develop a workforce adept in pharmaceutical innovation are also key. These initiatives are expected to usher in a new age of Indian pharmaceutical leadership, characterized by groundbreaking R&D,” Dr. Chigurupati said.
India’s potential in sustainable manufacturing is immense, set to substantially contribute to the fight against climate change, he said.
“With the manufacturing sector projected to add 800-900 billion to the GDP in the next 4-5 years, India is on the brink of revolutionizing manufacturing, integrating sustainability with cutting-edge science and technology. This approach is critical in addressing the global climate crisis. Embracing ambitious renewable energy and green hydrogen projects, India is gearing up to be a leader in sustainable product manufacturing. This demonstrates the country’s commitment to sustainable development, economic growth, energy independence, and leading the charge in global decarbonization. Innovations in renewable energy, Electrolyzer, green molecules, biobased manufacturing, and advancements in Carbon Capture, Utilization, and Storage (CCUS) are just a few areas where we need to accelerate progress. With the right policies and initiatives, India can transform these potentials into reality, securing its position as a global hub for sustainable manufacturing,” he said.
Anil Matai, Director General, Organisation of Pharmaceutical Producers of India (OPPI) highlighted that the government’s consistent efforts to boost sector investments in R&D for pharma are commendable.
“In the last budget, key initiatives were introduced, such as establishing centers of excellence for Artificial Intelligence to enhance manpower skills to develop cutting-edge applications and scalable problem solutions in critical areas including health, announcement of programme to promote research and innovation in the pharma sector through centres of excellence and encouraging collaborative research and innovation by public & private medical college faculty and private sector R&D team through select ICMR labs. These strategic steps underscore the government’s commitment to addressing the industry’s priorities to position India as a global hub for end-to-end drug discovery and boost India’s image as a pharma innovation hub,” Matai said.
To further support research to develop innovative pharma product, OPPI believes that the concessional tax rates under Section 115BAB of Income Tax Act, 1961 should be extended to companies solely engaged in R&D of pharma as well, beyond those related to manufactured articles, he said.
“We also hope for the elimination of import duties on life-saving drugs, recognizing that individuals should not bear substantial taxes during health crises. Simultaneously, we call for increased incentives for innovation and to attract foreign investment in advanced research. Emphasizing the importance of Intellectual Property (IP) protection, we recognize that India’s evolution beyond a volume supplier depends on prioritizing groundbreaking innovations. The implementation of these measures would not only strengthen the pharmaceutical and biotech sector but also enhance India’s global standing in innovation and healthcare,” he added.
Sandeep Jain, Managing Director, Akums Drugs & Pharmaceuticals said that as we await the unveiling of the 2024 budget, the Indian pharmaceutical industry seeks a roadmap that not only acknowledges its pivotal role in healthcare but also pushes it towards sustainable growth and innovation. “A significant boost in healthcare spending tops our list of priorities. Increased allocations are crucial not only to strengthen our healthcare infrastructure but also to ensure quality healthcare services reach every corner of our diverse nation,” Jain said.
- Recognizing the pharmaceutical industry’s substantial contribution to India’s exports, we look forward to initiatives that streamline and speed-up export processes. Simplifying international market access will empower pharmaceutical companies to play a more substantial role globally, thereby contributing significantly to the nation’s economic growth.
- Research and innovation form the core of our industry’s growth. We commend the government’s initiatives, including the launch of a new policy on R&D and innovation in the pharmaceutical and MedTech sector last year. The approved scheme with a capital outlay of Rs 5,000 crore is a significant step toward boosting R&D in the pharma and medtech sector. Allocating increased funds and incentives to encourage research and innovation through centers of excellence will further catalyse advancements in pharmaceuticals.
- Regulatory reforms are important for a dynamic and responsive pharmaceutical sector. Anticipating reforms that simplify regulatory compliance without compromising safety and quality standards is crucial. Such measures will expedite the time-to-market for new drugs and therapies, contributing to a more agile and efficient industry. As we shift from a cost-based to a value and innovation-based industry, we urge the government to position India as a high-volume, high-value player in the global pharma market. Schemes promoting industry-academia linkages, collaboration between the private sector and state-run institutes, and addressing the manufacturing of active pharmaceutical ingredients (APIs) are crucial for achieving self-sufficiency and global competitiveness.
- Addressing the complexities of the Goods and Services Tax (GST) framework is equally vital. The Finance Bill should articulate a reform agenda – the GST rates for API and finished formulations should be the same.Manufacture of rare diseases should be encouraged in order to achieve the government’s mission to eradicate sickle cell and other rare diseases as per policies framed by govt in 2021.