Indian pharmaceutical industry has very high expectations from the Union Budget 2022-23 to be presented by Finance Minister Nirmala Sitharaman on 1 February, 2022.  Industry expects required relief and incentives from the Budget 2022-23 that will accelerate the pace of the growth of industry. Indian Pharma Post collates here the expectations of the industry.

Rajiv Mistry, Founder and Director, Ascent Meditech Group of Companies

India’s demographic advantage is as good as the health of the people. Keeping this philosophy in mind, there should be higher budgetary allocation towards the development of medical infrastructure, including affordable hospitals for the burgeoning middle class. With a larger share of the Indian population residing in rural India, Budget 2022-23 should also allocate resources in developing the primary healthcare infrastructure. Medical insurance should be exempted from GST, thereby bringing relief to middle class households. Lastly, the GST rates for medical products should be rationalized to bring uniformity.’

Anish Bafna, CEO & MD, Healthium Medtech

The budget of FY 2021-22 had made a landmark allocation of 137% increase over FY21 in the healthcare sector, by allocating a total of INR 2,23,846 crore for healthcare. As the country faces the imminent third wave of the pandemic, the expectations are higher for a significant increase in the budget allocation for the healthcare sector.

As we gear up for the budget of FY 2022-23, the expectation is high in terms of research and development push to the medtech and devices sector in terms of incentivisation and tax holidays for a period of 10 years to be provided on the spending on research. There is also a need to increase the export incentives under the newly introduced Remission of Duties and Taxes on Export Products Scheme (RoDTEP), rationalisation of Custom Duty, roll back health cess on imports of medtech products and the amendment of SEZ Act to allow SEZ medtech manufacturers to sell their produce in the domestic market. Facilitating of single-window clearances for government approvals for the local companies, rebates on costs related to product registrations in foreign countries and keeping exported products outside the purview of price control will together contribute to a more significant push for exports. 

Strategic investments and partnerships with medtech parks that have already been commissioned in four states and their readiness for national and international medical devices companies should be able to push the needle in the positive direction. The above measures will go a long way to ensure that there is a further boost in domestic R&D ecosystem that will provide world-class quality products for domestic and international use.

Sriram Natarajan, Director and CEO, Molbio Diagnostics

Significantly increase allocation to health care to at least 3.5% of GDP. Increase public sector spending and provide market support to Make in India products. Encourage private sector participation through inclusive models to leverage existing capacity. Incentivise capacity building for outreach and rural programs. Encourage point of care, mobile, digital, and telehealth solutions to meet the Universal Health Coverage targets. Reduce GST to 5% for all Make in India products including raw material for the manufacture of the products. Stop duty-free imports of finished products and rationalise rates to remove inverted structures and anomalies. Provide institutional support to exports such as participation in trade fairs, promotions through Indian missions, bilateral trade agreements, etc. Incentivize exports to provide a level playing field to Indian companies. Prioritize CSR funding to complement national programs and rural health care projects by giving a higher weightage. Provide tax incentives for investments in startups.

The other issue is the PLI scheme. It is a great way to promote Make in India and for capacity building to meet national and global requirements. However, the scheme should be simplified and made accessible to all eligible companies rather than restrict to only the currently approved 55 companies to create the necessary impact. In its present form it is only incentivising already successful companies and denies opportunity to a major chunk of high potential but smaller companies. This combined with assured market access, a favourable GST structure, and rationalisation of skewed import rates should see a significant reduction in Import dependence.

Dr. Anish Desai MD., Founder & CEO, IntelliMed Healthcare Solutions

Health care sector continues to face the new challenges presented by the ongoing pandemic, which continues to dominate the attention and resources from all stakeholders. Neglect of rural population, inadequate outlay for health, social inequality, shortage of medical personnel, lack of medical research, expensive health service, health insurance sector reforms., Lack of cheap finance for the healthcare delivery models are some of the major issues that have been ailing the Indian healthcare system.

To address some of the gaps, a 137% increase in healthcare expenditure was announced in Budget 2021. India spent around 1.8% of its GDP on healthcare. Increasing the healthcare expenditure above 2.5% of GDP and further going up to 4%, is one of the primary expectations from the Union Budget 2022. Widening the coverage and regulating the private insurance sector will be important to address few of the issues. Making finance available at low interest rates for hospitals and diagnostic chains & making it one of the priority infrastructure in the sector is critical. GST and import duties need to be minimal on life saving drugs and devices.
Investments in R&D & medical research need to be encouraged and positive steps are needed in this direction, with financial allocation for the same. This will help to boost the domestic healthcare sector. International companies need to be encouraged to have R&D and manufacturing in India in collaboration with domestic players to enhance the capabilities of the local players and make state of art technology available to Indian patients."

Krishna Veer Singh Co-Founder and CEO, Lissun

Fair and impartial digital focus on healthcare is the need of the hour. We hope the government allocates more funds to health-tech, enabling even the rural population to fall under its ambit. Owing to India's young population, SaaS is maturing, and health-tech would help stabilize the shortage of medical manpower in the country. More budget in health-tech would also make it a lucrative space for investments and start-ups, in turn helping the government to achieve its aim of 1:1000 doctor/patient ratio by 2024, which is a WHO recommended norm. Besides, the pandemic has taught us that creating home care health infrastructure is an absolute necessity. Investment in health-tech can bridge this long and short-term industry gap. Moreover, we have seen mental health cases rise in the past year. However, insurers in India seldom offer policies that cover non-hospitalization treatments or OPD reimbursements. This means that unless mentally ailing patients get hospitalized, they won't be eligible for coverage. Insurance covers, thus, naturally exclude therapy and psychiatric counselling coverages. IRDA should push for OPD reimbursements for psychology therapy and counselling.