Pharma Industry Seeks Fiscal Incentives for Research and Development
The pharma industry in India is seeking fiscal incentives to promote research and development (R&D) in the sector. It is projected that the market size of the industry will reach USD 400-450 billion by 2047. The Indian Pharmaceutical Alliance Secretary General, Sudarshan Jain, highlighted the high risk, long gestation period, and low success rate in research, emphasizing the need for continuous investments.
Conducive Policies and Ease of Doing Business
Jain emphasized that the budget for 2024-25 should outline conducive policies that provide benefits in terms of both direct and indirect taxes. Additionally, it should facilitate ease of doing business for pharma companies.
Vision for the Pharma Sector
The domestic pharma industry aims to achieve USD 120-130 billion by 2030 and USD 400-450 billion by 2047. To achieve this vision, the Union Budget 2024-25 should accelerate the pace of innovation and R&D. Jain also highlighted the positive step of introducing the Promotion of Research & Innovation Program (PRIP) Scheme in 2023 to spur innovation.
Healthcare Spending and GST Framework
The healthcare industry body NATHEALTH is advocating for an increase in healthcare spending to 2.5% of GDP and the rationalization of the GST framework. The MD and CEO of NATHEALTH, Ashutosh Raghuvanshi, emphasized the importance of enhancing the medical value travel segment, addressing the MAT credit issue, and strengthening the healthcare value chain for economic growth and job opportunities.
Building Local Capabilities and Infrastructure Financing
A key focus in Budget 2024 should be on building local capabilities to deliver healthcare services even in remote regions. The localization of the healthcare value chain is also essential. The Narayana Health Executive Vice Chairman, Viren Shetty, expects the interim Union Budget 2024-25 to unveil a roadmap for addressing long-term infrastructure financing, increasing the number of medical and nursing colleges, and implementing fiscal reforms in the health insurance sector.
Zero GST on Diagnostic Services and Import Tariffs
Metropolis Healthcare MD Ameera Shah called for a zero GST on diagnostic services and refunds for GST paid on inputs. Recognizing the reliance on imports for 60% of India’s diagnostics, she emphasized the need for the government to rationalize import tariffs on healthcare products. Roche Diagnostics India MD Rishabh Gupta highlighted the importance of prioritizing access to affordable and accurate diagnostics to transform India’s healthcare system.
SDGs, Targets, and Indicators in the Article
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SDGs Addressed
- SDG 3: Good Health and Well-being
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 17: Partnerships for the Goals
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Targets Identified
- Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential healthcare services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all
- Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending
- Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources to support the achievement of the sustainable development goals in all countries, in particular developing countries
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Indicators Mentioned or Implied
- Investments in research and development (R&D) in the pharma sector
- Direct and indirect tax benefits for pharma companies
- Ease of doing business for pharma companies
- Healthcare spending as a percentage of GDP
- Rationalization of the GST framework
- Infrastructure financing in the health sector
- Number of medical and nursing colleges
- Fiscal reforms in the health insurance sector
- Zero percent GST on diagnostic services
- Refunds for GST paid on inputs
- Rationalization of import tariffs on healthcare products
- Access to affordable and accurate diagnostics
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 3: Good Health and Well-being | Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential healthcare services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all | – Investments in research and development (R&D) in the pharma sector – Direct and indirect tax benefits for pharma companies – Ease of doing business for pharma companies – Zero percent GST on diagnostic services – Refunds for GST paid on inputs – Access to affordable and accurate diagnostics |
| SDG 9: Industry, Innovation, and Infrastructure | Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors in all countries, in particular developing countries, including, by 2030, encouraging innovation and substantially increasing the number of research and development workers per 1 million people and public and private research and development spending | – Investments in research and development (R&D) in the pharma sector – Ease of doing business for pharma companies |
| SDG 17: Partnerships for the Goals | Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology, and financial resources to support the achievement of the sustainable development goals in all countries, in particular developing countries | – Investments in research and development (R&D) in the pharma sector – Direct and indirect tax benefits for pharma companies – Ease of doing business for pharma companies – Healthcare spending as a percentage of GDP – Rationalization of the GST framework – Infrastructure financing in the health sector – Number of medical and nursing colleges – Fiscal reforms in the health insurance sector – Rationalization of import tariffs on healthcare products |
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Source: health.economictimes.indiatimes.com
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