Budget Interventions Can Position Indian Pharma For Global Leadership

Over the past 3 years, India's healthcare budget has fallen below 2% of GDP

- KIRAN MAZUMDAR SHAW

The upcoming Union budget presents a unique opportunity to accelerate the growth of India's pharmaceutical and life sciences sector. By allocating substantial funds for healthcare, enhancing the accessibility and affordability of life-saving medicines, prioritizing cutting-edge research, and advancing infrastructure, the government can drive growth, foster innovation, and boost global competitiveness in this vital sector.

Given the Modi government's commitment to universal healthcare, the budget should focus on enhancing affordability and accessibility to healthcare for both the rich and the poor.

Over the past three years, India's healthcare budget has fallen below 2% of GDP, despite the National Health Policy 2017 recommending an increase to 2.5% of GDP by 2025. With healthcare share of the total budget declining from 2.3% in FY20 to 1.9% in FY25, the government must make a substantial allocation in this budget to bridge critical gaps in healthcare accessibility, quality, and affordability, ensuring better outcomes for all citizens.

It should also exempt or reduce GST on life-saving drugs, rare disease treatments, and precision medicines like cell & gene therapy. While GST has been reduced or waived for some life-saving medicines and therapies, some still attract GST above 5%. A GST waiver will alleviate the burden on families, given India's high out-of-pocket healthcare costs of over 62%.