ALL anti-cancer and HIV drugs are likely to become cheaper as the forthcoming budget is likely to fully exempt these from customs duty/countervailing duty (CVD), but on the condition that the benefits are passed on to patients. Also, the finance ministry is understood to be considering hiking the weighted deduction on expenditure on research and development by drug companies to 200% from 150% and also extending the benefit by five years to March 2017. The deduction under Section 35 (2AB) of the Income Tax Act is currently valid up to 2012.
The proposal is aimed at encouraging research. Further, coverage of the section could be extended to expenditure incurred for obtaining regulatory approvals and filing of patents abroad.
“Treatment of cancer and AIDS is prohibitively expensive. The prices of these imported drugs need to be reduced considerably, in line with the mandate of the pharmaceutical policy, to make available quality medicines at reasonable prices,” a senior government official said.
Cancer drugs are marketed by both foreign and Indian players such as Roche, Pfizer, Dr Reddy’s, Cipla and Ranbaxy. Cancer accounts for 3.6% of the total deaths in India; it is the second-largest non-communicable disease. The market for breast cancer drugs alone is projected to double from $35 million in 2007 to $64 million by 2012. India was a generic-driven market. Consequently, patients find most of the new generation drugs for both cancer and HIV too expensive. In developed markets, the costs of the drug are borne by insurance companies, unlike here. Accordingly, it was earlier proposed that cancer drugs be brought under the NPPA to make the drugs accessible to many. Some of these are marked 100-300% over similar therapies in the Indian market.
Pfizer’s kidney cancer drug Sutent (Sunitinib), for instance, was launched in India in 2007 at a prohibitive price of Rs 1.96 lakh for a 45-day treatment in the country. The Centre’s AIDS programme only offers three anti-retro viral drugs to patients free of cost. Should a patient develop resistance or toxicity, he has to foot the bill for alternative drugs from the private sector himself.
Besides, most new generation and patented HIV drugs launched by global pharma companies are not part of the government’s programme forcing patients to pay from their own pockets. “Despite customs duty exemption, the prices for these patented drugs still remain high,” an industry source said.
The 2009-10 budget totally exempted influenza vaccines, nine lifesaving medicines (used for treating breast cancer, hepatitis-B, rheumatic arthritis, etc) and two bulk drugs from excise duty and CVD. The basic customs duty for two bulk drugs used in manufacturing these medicines was also cut from 10% to 5%.
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