Indian pharma companies hope to get incentives for innovation: Union Budget 2024

India's pharmaceutical sectors seek the government's assistance to shift from producing generic drugs to innovating on their own.

Published on: Jul 6, 2024, 19:25:15 IST

By HT News Desk | Edited by Abhyjith K. Ashokan

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Indian pharmaceutical companies hope to get financial assistance and tax incentives for the research and development of drugs, with the new government ready to present the 2024 Union Budget on July 23rd, according to a Reuters report.

India's pharmaceutical companies hope to get financial assistance and tax incentives for the research and development of drugs in the new 2024 union budget. (Shutterstock/ Representational image)

Why is India's pharmaceuticals industry important?

India is the third largest manufacturer of pharmaceutical drugs after the US and China. India's pharmaceuticals market is projected to be valued at $130 billion by the end of this decade.

India is also known as a hub for generic drugs, which are cheaper versions of branded drugs.

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India has offered incentives for drugs since 2020, but not for novel or newly founded drugs yet.

India's exports of generic drugs, which dominate the US generics market, is projected to double to $55 billion by 2030, according to the Pharmaceuticals Export Promotion Council of India (Pharmexcil).

Why do pharmaceutical companies want incentives?

Asset management and research firm Bernstein said in March this year that India needs to create a domestic market where innovative drugs can be created and manufactured profitably at the right price, adding that insurance coverage for novel drugs and creating updated regulatory standards for manufacturing and clinical trials is needed for stimulating innovation.

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"Spending millions on clinical trials with no pricing power is not a business they (pharma companies) want to be in," Bernstein said in an open letter to the prime minister.

“If the Indian government can give some income tax exemptions for 5-10 years for any new molecule developed in India, that can pull innovation to grassroot level,” Krishna Ella, chairman of Bharat Biotech told Reuters on the sidelines of an event in Hyderabad on Friday. “Companies will start investing in innovation.”

Also Read: Union Budget 2024: Date, time and all you need to know

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HT News Desk
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