Like several corporate czars and research analysts, Renu Kaushik is also eagerly waiting for July 6. The bespectacled lady is hoping that the UPA government would have something in store for people like her this Budget. She is particularly concerned about what concessions the government would provide for medications and the kind of spending it would go in for in healthcare.
Kaushik is no doyenne of the pharmaceutical sector. Nor is she any exponent on budgetary matters. The frail 86-year-old Goregaon resident, who retired from government service nearly three decades ago, is just one of the millions who tries to squeeze out money for her medication from a meagre pension — hers is Rs 4,000 per month.
She is a diabetic and asthmatic, who also regularly suffers from severe backache. All in all, she ends up spending as much as Rs 1,500-1,900 on her monthly dose of medicines and consultancy. This, she says, is way too much as the balance is at times not enough to take care of her monthly expenditure.
A widow, Kaushik has also thought of mortgaging her gold jewellery, or her 220 sq ft home, if her medicine bills zoom upwards.
“Medicines are one thing I can’t compromise on,” she says. “As sickness increases, medicine bills also go up. I hope the government brings more medicines under price curbs and regulates the prices so that people like me don’t have to live under the constant fear of having to mortgage homes or jewellery as a last resort. All duties on pharmaceuticals should be cut drastically. The government should set up more of these Jan Aushadi stores for providing medicines at lower cost, not only in smaller towns, but also in places like Mumbai.”
With as many as 92% of Indians currently having no form of health cover and having to shell out medical expenses from their own pockets, millions like Kaushik live life on tenterhooks, amidst fear that their medical bills will surpass their income.
These millions form the crucial component of this Budget and are eagerly waiting it out to see what kind of importance the government gives to the healthcare and pharmaceutical sector.
According to several pharmaceutical industry heavyweights, one of the key issue is to have zero import duty on life saving drugs, including those for cancer, AIDS, malaria and tuberculosis. Says N Santhanam, chief operating officer of Piramal Healthcare, “Even excise duty on life saving medicines should be zero.”
Veterans do expect a reduction in the excise duty this year. In Budget 08-09, excise on pharmaceuticals was reduced from 16% to 8%. Says S Ramesh, president, finance and planning, Lupin, “Concessions in the excise duty will provide much-needed relief to companies and facilitate the entry of cheaper drugs into the market.”
Another issue the industry expects the finance minister to accede to is increasing the income tax exemption on tax-free zones like Himachal Pradesh, Uttarakhand, Sikkim, and Madhya Pradesh by another five years.
According to Santhanam, for the first five years post commercial production, companies get 100% tax exemption. “For the next five years, that 100% exemption drops to 30%. We feel that the government should extend the 100% exemption to 10 years, rather than the current five.”
Health insurance is another topic giving patients sleepless nights. According to data by research and consulting firm Frost & Sullivan, only 8% of Indians currently have some health insurance/ reimbursement coverage.
Says Ranjit Shahani, vice-chairman and managing director of Novartis India, “The government should provide incentives for health insurance. The cap on foreign insurance company participation should be increased, as it will bring in more foreign direct investment (FDI), global expertise, and cover for a large number of families.”
The last few years, Indian companies have become aggressive on their R&D front. Several companies like Glenmark, Lupin, Piramal, Dr Reddys and Cadila Healthcare boast of novel molecules (new chemical entities or NCEs) in their pipelines.
Some players are also developing novel drug delivery systems (NDDS) — new delivery platforms for existing drugs, so that they can be administered to patients in an easier manner with fewer side effects.
With much activity happening on the R&D front, the industry is imploring the government to offer large-scale incentives to further the R&D initiatives, says KRN Moorthy, deputy managing director of Mumbai-based drugmaker Wanbury.
Indian companies spend 4-6% of their turnover on R&D, against the 19-20% spent by MNC drugmakers, says Santhanam. “Companies pump in money for R&D from their domestic sales and exports. We expect certain sops, like a tax exemption on profits when NCEs hit the market,” says Santhanam.
Comments