Decoding Budget 2024-25: A lacklustre budget for pharma

Nirmala Sitharaman presented the Union Budget for 2024-25 for a record seventh time today. PM Narendra Modi said that his term’s first full Union Budget will lay the foundations of ‘Viksit Bharat’ and economic trends for Modi 3.0.

Some key highlights in this budget for pharma are:

• Three more medicines viz. Trastuzumab deruxtecan, Osimertinib, and Durvalumab have been exempted from Customs Duties.
• Allocation of Rs 1 lakh crore for spurring private sector-driven research and innovation at commercial scale could give a boost to pharma R&D. 
• Allocation of funds for skilling is expected to benefit the pharma sector too 
• The Rs 100 crore credit guarantee scheme for manufacturing MSMEs without collateral or third-party guarantee in term loans for the purchase of machinery and equipment has also found favour with the pharma MSME sector.  

Read on to know what industry stakeholders have to say about the new budget. (Excerpts from their statements)

We expect the government to look towards the pharmaceutical sector more favourably

Budget 2024 does not hold much for the pharmaceutical sector, although the pharma sector is one of the fastest growing and most promising sectors in India, we were expecting some more announcements to promote the API sector and manufacturing of intermediates in India for which we are largely dependent on China. We also expected some announcements on R&D. Today, India has emerged as a Pharmacy of the world and the quality of Indian medicines is favoured by most developed countries like the US and Europe. No sector can grow with a pattern of age from the government. We expect the government to look towards the pharmaceutical sector more favourably.

– Ashutosh Gupta, Director, Medicamen Organics, and Past Chairman, Pharmexcil, Export Promotion Council, India

Higher allocation to the sector and certain sector-specific announcements could have helped

“The Government has allocated Rs 89,287 crores towards the healthcare sector, which is marginally higher than the original budget allocation estimate of Rs 89,155 crores last year. In priority relating to Innovation, Research & Development, it is proposed to operationalise the Anusandhan National Research Fund for basic research and prototype development and to set up a mechanism for spurring private sector-driven research and innovation at a commercial scale with a financing pool of 1 lakh crore. Though it is not clear how much of this will be allocated towards the pharma and medical devices sector, it is hoped that a significant allocation under this priority will be made towards research in pharma and medical devices. While higher allocation to the sector and certain sector-specific announcements could have helped, still, the integration of healthcare with most of the priorities has still kept the sector in the race.”

– Shuchi Ray, Partner, Deloitte India

We would like the government to look at incentivising R&D for new medicines and medical devices

“For the healthcare sector, the government did announce an exemption for three more medicines for cancer treatment as well as for the manufacturing of certain medical devices from customs duty. But the Budget missed out on a few key announcements. We would like the government to look at incentivising R&D for new medicines and medical devices. Aside from this, we hope the government will enforce a law requiring doctors’ prescriptions to include drug names rather than specific brands. These changes can certainly help the country move towards a Viksit Bharat. We hope the government can take this into consideration in the coming months.”

-Siddharth Gadia, Co-Founder, Zeno Health