Pharma sector welcomes customs, excise cuts .
The pharmaceutical industry has largely welcomed the proposal from the finance minister to reduce excise and customs duties on life-saving drugs and devices, reports Suprotip Ghosh.business Updated: Jul 07, 2009 01:11 IST
The pharmaceutical industry has largely welcomed the proposal from the finance minister to reduce excise and customs duties on life-saving drugs and devices.
The mood in the industry was largely upbeat following the minister’s announcement focussing on rural healthcare.
Industry leaders, however, said important sops, particularly on price control and sops to research-focused companies, were missing.
“On influenza vaccine and nine specified life saving drugs used for the treatment of breast cancer, hepatitis-B, rheumatic arthritis, etc., and on bulk drugs used for the manufacture of such drugs, I propose to reduce the customs duty from 10 per cent to 5 per cent. They will also be totally exempt from excise duty and countervailing duty,” the finance minister said in his budget speech.
Customs duty will also be reduced from 7.5 per cent to 5 per cent on two specified life saving devices used in treatment of heart conditions. These devices will be fully exempt from excise and countervailing duty.
“It is definitely be beneficial for a lot of players,” said Adar Poonawala, executive director, operations, Serum Institute of India, the country’s largest maker of vaccines.
Extension of scope of current weighted deduction of 150% on expenditure incurred on in-house research and development to all manufacturing businesses, he added.
“But a long-standing demand of pharmaceutical and biotechnology companies to provide sops for start-up research companies has been ignored,” said Dr Swati Piramal, director, Piramal Healthcare, one of India’s largest pharmaceutical companies.
Tapan Ray, director general, Organisation of Pharmaceutical Producers of India (OPPI), said the budget failed to take into account a critical comment from the Economic Survey published last Thursday which said, “The drugs price control should be limited to essential drugs in which there are less than five producers. All others should have been decontrolled”.
“The net impact of the budget on the industry remains neutral as weighted deduction to R&D and excise structure remain unchanged. An opportunity has been missed to give further encouragement to innovation through R&D,” Sujay Shetty, Associate Director of consulting firm PriceWaterHouse Coopers said.