Dr Arun Singh, Senior Economist, Dun & Bradstreet, India tells us what he expects from the Union Budget 2014-15.
There are a significant number of expectations from the new finance minister in his maiden budget. The new government with its mantra of 'minimum government and maximum governance' had already announced a few measures to change the mode of governance. Given that the government might have a new modus operandi, we do expect some surprise measures in the Union Budget 2014-15.
Budget Expectations for Pharmaceuticals & Healthcare:
We expect infrastructure status for healthcare - savings from this deduction can be reinvested back by companies to enhance healthcare facilities. Further, we expect waiver of service tax on health insurance premiums which will lead to reduction in cost for the consumer.
The Government is expected to spend Rs. 30 bn and double the number of drug inspectors in the coming three years and form state-of-the art testing labs at ports to meet global quality standards. Further, there is a need to address the scarcity of health personnel.
Weighted deduction for expenditure outside approved R&D facility is expected - A weighted tax deduction of 200% is permitted on in-house R&D expenditure. Expenditure pertaining to R&D conducted in-house such as clinical trials is demanded by the industry to be eligible for weighted deduction, if carried outside the approved R&D facility. It is likely that Government may waive taxes on instruments and equipment imported for analytical and R&D use to enhance quality of pharmaceutical products for which sophisticated instruments are needed.
We expect waiving or reducing excise duty on generic medicines to increase the availability of medicines to the needy patients.
There is a need for a universally 'accessible, affordable and effective' healthcare for which the Government is expected to formulate a new health policy and roll out a National Health Assurance Mission along with other measures.
D&B expects the Government to create an environment that fosters innovation - the industry expects the Government to undertake measures to further encourage R&D. This can be done by:
continuing demand is for the Government to promote local manufacturing and exports from the industry.
A price control mechanism is required in India for essential medicines The Government is expected to bring down prices of essential drugs by adopting a price control mechanism.
Drug prices regulator National Pharmaceutical Pricing Authority (NPPA) is considering on bringing medicines used for diseases such as Cancer, AIDS and Malaria under the price control mechanism. Thus, it is expected that prices of expensive medicines used for select therapeutic categories such as cancer, HIV, diabetes, malaria, etc. should be lowered. (Read: Union Budget 2014-15: Healthcare budget demands decoded for dummies)
For more articles on the Union Budget 2014-15, check out our Union Budget 2014-15 section. Follow us on Facebook and Twitter for all the latest updates! For daily free health tips, sign up for our newsletter. And to join discussions on health topics of your choice, visit our forum.
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