Budget 2024: Pharma Industry Seeks Incentives For R&D, Conducive Policies

The pharma industry has sought fiscal incentives to promote research and development (R&D) in the sector, as it is likely to reach USD 400-450 billion market size by 2047.

In a statement, Indian Pharmaceutical Alliance Secretary General Sudarshan Jain said there is a high risk, long gestation period and low success rate in research, and therefore, there is a need for continuous investments.

"The budget 2024-25 should outline conducive policies that provide benefits in terms of both direct and indirect taxes and also facilitate ease of doing business for the pharma companies," Jain noted.

The interim Budget is scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1.

Jain said the domestic pharma industry is at the cusp of change.

"The Indian pharma sector 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," he added.

The announcement of the Promotion of Research & Innovation Program (PRIP) Scheme in 2023 was a positive step to spur innovation, he stated.

Healthcare industry body NATHEALTH said it is advocating for an increase in healthcare spending to 2.5% of GDP and the rationalisation of the GST framework.

"Additionally, we aim to enhance the medical value travel segment by addressing the MAT credit issue and strengthening the healthcare value chain, which is essential for driving economic growth and creating new job opportunities," NATHEALTH MD and CEO Ashutosh Raghuvanshi said.

A key focus should be on building local capabilities to deliver healthcare services even in the most remote regions, alongside the localisation of the healthcare value chain, he added.

"We expect 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 fiscal reforms in the health insurance sector," Narayana Health Executive Vice Chairman Viren Shetty said.

Metropolis Healthcare MD Ameera Shah sought a 0% GST on diagnostic services and refunds for GST paid on inputs.

Recognising that 60% of India's diagnostics are reliant on imports, it becomes paramount for the government to rationalise import tariffs on healthcare products, she added.

Roche Diagnostics India MD Rishabh Gupta said prioritising access to affordable and accurate diagnostics can transform India's healthcare system.