Government may remove customs duty on cancer, HIV drugs

Category: International Trade Sub-category: Customs
Document type: news

On one condition, the forthcoming budget is likely to fully exempt customs duty/CVD from all anti-cancer and HIV drugs to make it cheaper for patients, if only the benefits are passed on to patients.

The finance ministry is understood to consider the weighted deduction on expenditure on research and development (R&D ) by drug companies to 200% from 150%, and also extended the benefit by five years to March 2017.The deduction to drug companies under Section 35 (2AB) of the Income-Tax Act is currently valid up to 2012.

The proposal is aimed at encouraging research.

“Treatment of cancer and AIDS is prohibitively expensive . If 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,” said a senior government official.

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.

Earlier, it was proposed that cancer drugs be brought under NPPA to make the drugs accessible to all. 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.

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,” said an industry source.

The 2009-10 Budget totally exempted influenza vaccines, nine life saving medicines (used for treating breast cancer , hepatitis-B , rheumatic arthritis , etc) and two bulk drugs from excise duty and countervailing duty. The basic customs duty for two bulk drugs used in manufacturing these medicines was also cut from 10% to 5%.

Source: Economic Times