Union budget-2008 and Indian pharma sector : part 4

The Union budget 2008 adding flavours to the Indian pharmaceutical industry seem ambiguous in some dimensions. As we discussed earlier, weighted deduction of 125% on payments made for outsourcing research services is a positive factor for R&D focused companies such as Ranbaxy and Nicholas Piramal. But we know that a lion’s shares of the Indian pharmaceutical industries are lacking the facilities of research and development. Due to the practice of the process patents for the last few decades, these companies were mainly focusing on reverse engineering and in the production of generic version of the drugs. So the weighted deduction will not be helpful to these companies for whom the research and development activities are still a ‘mirage’.
Exemption from the excise duty of some life saving drugs and the bulk drugs used for their manufacture will be definitely a stimulant for the pharmaceutical companies which are focusing on the manufacturing of those drugs. The actual benefit should reach the consumers, the patients who rely up on those drugs and buy them. The pharmaceutical manufacturers should do such favours so that the lives saving drugs are affordable to the common man at cheap rates. Even though the manufacturers having good hand in R&D are getting the main advantage out of this budget, a remarkable reduction in their pricing for the innovative drugs is a suspicious matter of concern. The companies have to reduce the price of the life saving drugs to some nominal values by taking consideration of the boosting they are getting from the government. Then only the objective of these proposals by the government in this budget will be attained and so, the needs of the consumers. Pricing regulatory authorities like NPPA (National Pharmaceutical Pricing Authority) have to play a leading role to assure these kinds of hidden aspects of the budget.
Most of the early budgets had some significant proposals comparable to that of the Union budget 2008 regarding the pharmaceutical sector. But how many of those measures came into force and to what extend they helped the Indian pharmaceutical industry and the patients in the country is a big question to be answered. As we know majority of the proposals passed by the government change the face when they come out to the destination. Instead of helping the people they may become useless or even burden to them as we can take lot of examples from our past to illustrate in this occasion.
With this blog let me conclude the discussion on Union budget 2008 and its impact on Indian pharmaceutical sector. As we know we are still behind the western world in the field of pharmaceutical industry by considering many aspects. Let us hope that these measures laid by the central Finance Minister will give a good twist to the domestic pharmaceutical industry which helps in the long run.

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