There should be incentives to encourage setting up bulk drug manufacturing units
The Indian pharma industry is a growing space. The intervention of digital and technological innovation has boosted the industry overall. Our only expectation is for the government to restore tax benefit offered on research and development expenditure in the upcoming Union Budget. Additionally, we are looking forward to announcements on incentives to encourage setting up bulk drug manufacturing units in the country. Also, considering India’s growing population and the increasing disease burden we wish to see increased spends on public health.
The budgetary policy has to create more trust and a rewarding environment for investors
Budget 2020 is going to be crucial and no doubt challenging ever before. Whether or not India will be able to hit the $5-trillion GDP goal within five years is currently concerning many.
In the corporate sector, to give better execution to the lengthy process of corporate M&As/ restructuring through the courts, the government should either prescribe a fixed time frame for the process or designate SEBI or department of company affairs as a single-window authority for all approvals.
There should be improved access to healthcare for low-income households besides reduced health-related costs. Considering the difficulties in proposing and implementing Budget 2020 at this juncture, the budgetary policy has to create more trust and a rewarding environment for investors, keeping revenues stable and boosting demand through public investment and spending.
The government should consider for R&D tax concessions and announce incentives
Indian industry needs to create a good patent bank to compete with the global pharma. In order to make this happen, it will have to restore 200 per cent weighted tax deduction on R&D related expenditure. Future of the industry is highly dependent on MSMEs. The government should ensure these companies get easy credit access at cheaper rates. This will also enable them to comply with WHO Good Manufacturing Practices and other standardisation norms.
A virtual vendor platform could be created for supplying APIs, which would minimise the cost to manufacture and make round the clock availability of APIs. As our industry is people and talent intensive, skills development funds need to be allocated. India has a huge global potential in the areas of biopharmaceuticals and biologicals. The government should consider this sector for R&D tax concessions and announce incentives that will boost manufacturing and infrastructure in the area.
We look forward to measures that will help create a scientific eco-system in India
Innovative research is crucial for India, both from the perspective of scientific advancement and making an impact globally. Support from government is essential for every industry and more so for a growing sector like healthcare research in India. Recent announcements like a greater focus on R&D investment, reduction in time for approval of drugs, single-window assistance mechanism for pharma investors, etc. does show hope. We look forward to measures that will help create a scientific eco-system in India, including strengthening the education system- especially the scientific and technical institutions which will help retain the talent pool in the country.
It is important that the industry moves up the value chain by focusing on innovation and quality
India is the pharmacy of the world and accounts for approximately 20 per cent of the market share globally in terms of volume. We have a competitive advantage in the global pharmaceutical industry. It is important that the industry moves up the value chain by focusing on innovation and quality. For creating an enabling research ecosystem, the starting point would be to increase expenditure on healthcare from the current about 1.2 per cent to 1.5 per cent of GDP this year and about five per cent by 2030, in line with the developed European and North American economies.
The pharma industry must move from branded generic drugs to discovering and developing new drugs; for that creating an enabling research system is a must. The forthcoming budget provides the government with an opportunity in this respect by reinstating weighted tax deduction of 200 per cent on R&D. The budget should also provide for incentives to set up four to six bulk API and innovation clusters to reduce dependence on API imports and to align with the idea of ‘Make in India’ to ‘Discover in India.’ The industry aspires to become the world’s largest supplier of quality medicines; for this to happen, the growth would have to come from increasing exports to large and traditionally underpenetrated markets such as Japan, China, Africa, Indonesia and Latin America.
Enhancement of weighted tax deduction on R&D from 150 per cent to 200 per cent will enable new discovery and innovation
The economy is going through a phase of low GDP growth, Finance Minister should adopt softer interest rates to encourage new investment and expedite Capex cycle aiming at generating more employment opportunities and rollout tax benefits for individual taxpayers so consumption can also get a boost.
Enhancement of weighted tax deduction on R&D from 150 per cent to 200 per cent will enable new discovery and innovation. If the government gives proper financial support to SMEs from technology upgradation fund for Pharma SMEs, then the pharma SMEs in India can graduate to the next level and can become exporters.
The Indian pharma industry is facing challenges such as increased scrutiny from drug regulators, stalled new product approvals and price control in the home as well as developed markets affecting the growth. With the government’s initiative, not only can the industry support the government in providing affordable and efficacious medicines, but it will also help to mark its presence in the global markets.
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