By Viranchi Shah
The Union Budget 2025 has waived import duty on 36 life-saving drugs and reduced it for another six. Though this will help bring down their prices, most of the imported drugs are under patent protection which make them expensive, explains Viranchi Shah
l Changes in customs duty for life-saving drugs
THE BASIC CUSTOMS duty on life-saving medicines is at 5%. All imported drugs and medicines are required to be registered with the CDSCO. However, medicines for personal use can be imported by patients in small quantities.
The 2025 Union Budget has proposed additional concessions in import duties on certain life-saving drugs. These are welcome patient-centric support for those patients who have to depend on imported medicines while treating certain serious medical conditions. Many of such imported medicines are quite expensive for the average Indian patient. As per the announcements, the import duty on six life-saving drugs has now been reduced to 5% from the earlier 7.5%. In the case of 36 drugs used for cancer, rare diseases and other critical conditions, the import duties are now fully exempted (0%) as compared to the earlier 5%. In the case of another 37 life-saving drugs that are covered under patient assistance programmes for giving them free-of-cost to patients, the import duties are now fully exempt as compared to the earlier duty of 5%.
l Incidence of GST on medicines
ALL FINISHED FORMULATIONS (medicines) are subject to GST at the rate of 12%. However, certain specific medicines for critically ill patients are also covered at 5% under GST.
l Will cut in duties help patients?
MORE THAN 97% (by volume) of the medicines sold in India are off-patented and are manufactured within India. Less than 3% medicines are patented medicines and some of them are imported. Those medicines that are imported are mostly patented ones, and are usually used for critical ailments. The policy of easing import duties on these imported drugs will help these medicines become affordable. It will not have any adverse impact on the domestic industry.
l Share of imports in domestic market
INDIA, POPULARLY KNOWN as the world’s pharmacy, is the third largest manufacturer of medicines. India manufactures almost all dosage forms of medicines, and almost all off-patented drugs. The Indian made medicines are known to be most cost effective and affordable across the globe. A global study has indicated that India-made medicines are more than 52% cheaper as compared to global prices. There has been a spike in the Indian pharmaceutical industry’s interest in drug research and innovation, and in bringing its own researched drugs to the markets. This will further drive the Indian pharma industry, expanding the volume of drugs manufactured in India. The share of imported medicines in India is less than 3% of the market and is mostly for patented drugs.The largest market for Indian medicines outside India is the USA and Europe. Indian medicines are widely accepted and popular in all global markets including developed and developing countries.
l Are imported drugs subject to price regulation?
ALL MEDICINES SOLD in India, whether made in India or otherwise, are covered under DPCO (Drugs Price Control Order). India continues to be the world’s most affordable source of good quality medicines.
The current price control regulation has two components: essential medicines — those covered under the National List of Essential Medicines (NLEM) — and other medicines. In case of NLEM, the retail prices are fixed by the National Pharmaceutical Pricing Authority (NPPA) and any change in their prices is also determined by the NPPA.
The current DPCO maintains a balance between the needs of the industry and the needs of patients. However, the DPCO also requires procedural simplification and prospective pricing. A more progressive price control regime can help the industry to invest more in innovation, track and trace and
other measures.
l Other options for affordable medicines
THE INDIAN GOVERNMENT, regulators and the pharmaceuticals industry are all very sensitive to the patients’ need for affordable medicines and affordable healthcare. While Indian medicines continue to be world’s most affordable, the government’s initiatives such as the Pradhan Mantri Jan Aushadhi Pariyojna, Ayushman Bharat and several such initiatives make medicines and healthcare further more affordable and accessible. Patient assistance programmes and such other programmes run by drug manufacturers, advocacy groups and charitable organisations also contribute.
The writer is national president, Indian Drug Manufacturers’ Association
