India's Pharmaceutical Industry Awaits Union Budget with High Expectations

As India's pharmaceutical industry continues to lead the world in generic drug production, the spotlight is now on the forthcoming Union Budget. Industry leaders are eagerly anticipating budgetary measures that will propel their ambitions to maintain their status as the "pharmacy of the world" and emerge as a global hub for pharmaceutical innovation.

Industry associations have highlighted the need for corporate tax breaks, incentives for research and development (R&D) spending, and a streamlined intellectual property rights (IPR) system to support the growth of the domestic pharmaceutical sector.

Anil Matai, Director General of the Organisation of Pharmaceutical Producers of India (OPPI), outlined the sector's wishlist for the upcoming Union Budget. Matai emphasized the need for government measures to encourage R&D investments, suggesting corporate tax breaks, deductions for R&D expenses, and incentives for multinational corporations engaged in research activities.

"The initiatives will aid in speeding up R&D and innovation in the sector," Matai stated. He proposed expanding the application of section 115BAB of the Income Tax Act, 1961, to companies exclusively involved in pharmaceutical R&D, alongside a 200 per cent deduction rate on R&D expenditures, citing the high-risk and protracted nature of such investments.

Matai explained that these measures would significantly enhance the industry's capacity to undertake essential research and development activities, including clinical trials and patent registration. He also advocated for a robust intellectual property rights framework to foster economic growth and attract domestic and international research-based pharmaceutical businesses to introduce innovative treatments in India, addressing unmet medical needs.

Furthermore, Matai pushed for incentives for organizations and companies providing specialized training courses for the pharmaceutical workforce. He underscored the importance of incentives for developing treatments for rare diseases, calling for establishing more centres of excellence (CoEs), increased funding allocations for rare disease R&D, and waiving import duties on necessary medications.

"Improving patient affordability will be achieved by broadening the list of life-saving pharmaceuticals that qualify for GST/import duty exemptions to include all cancer medications," stated Matai.

Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance (IPA), also echoed similar sentiments, urging the government to include measures in the 2024-2025 budget that provide both direct and indirect tax benefits to promote research and investment in the industry, aiming to establish India as a global benchmark in quality.

The IPA, an association comprising top pharmaceutical companies in India, including Cipla, Sun Pharma, Lupin, and Dr. Reddy's Laboratories, is keenly awaiting the budget announcement, hopeful that it will lay the groundwork for a new era of innovation and growth in India's pharmaceutical sector.