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Pharma industry reacts positively to Budget 2017-18

Our Bureau, Mumbai
Wednesday, February 1, 2017, 17:05 Hrs  [IST]

The healthcare industry has reacted positively to the Union Budget presented in Parliament today by Union Finance Minister Arun Jaitley. Industry leaders have voiced optimism on the fact that the increase in health expenditure by 20 per cent reflects greatly on the government’s intent to prioritize healthcare in India. Moreover, abolishing FIPB shows India more welcoming of FDI and relaxation of protectionist barriers.

Welcoming the budget, DG Shah, Secretary General of Indian Pharmaceutical Alliance said the increase in social and infrastructure spending in the budget will enlarge pharma market and push growth. However there is no clarity on how amendment to Drugs and Cosmetics Act will help reduce drug prices. This most likely hints at making generic prescribing mandatory, he said.

"The Union Budget 2017 has taken a step towards making healthcare not just affordable but structurally robust as well. However, technology could prove to be a disruptive factor in assuring that the healthcare reaches out to those who have been hitherto isolated from it. But, unfortunately the budget has completely overlooked the health-tech startups which are changing the landscape of healthcare industry in India. With a focus on transparency and reach, they have been deprived of an opportunity to make a dent in healthcare ecosystem," reacted Ravi Virmani, MD & Founder, CrediHealth, a medical assistance company that gives guidance to a patient from the first consultation through the entire hospitalization process.  

According to Dr. Rajendra Patankar, COO, Nanavati Super Speciality Hospital, Mumbai, “To a greater extent, the budget has succeeded in addressing the urgent issue of rationalization of expenditure in the health sector through several positive measures. Increased emphasis on use of generic medicines and large-scale availability of drugs at reasonable price points through the amendment of the Drugs and Cosmetics Rules will bring a large section of the population within the gambit of affordable medical care and institutionalize the domestic healthcare sector. The announcement to formulate new rules for medical devices has the definite potential to scale down exorbitant costs of critical life-saving surgical procedures. Geriatric medical care is bound to get a huge boost with the health conditions of senior citizens monitored via Aadhar cards. By announcing 5,000 additional seats in government medical colleges, the government has positively initiated the move to narrow the growing doctor-patient demand supply gap in the country.”

Dr. Prathap C Reddy, chairman, Apollo Hospitals Group said, “The structural reform in medical education, in particular the increase in the number of post graduate medical seats and DNB courses is praiseworthy as it was long-awaited. But, I do hope that the health policies will address the large unmet need for quality healthcare infrastructure and in particular the need to wage a war on non-communicable diseases which the health sector has been focusing upon.”

“The Medical Council had recently amended its guidelines to encourage doctors to prescribe generic names of medicines. In the budget speech, it has been indicated that changes may also be introduced to the Drugs and Cosmetics Rules along similar lines. This will be a significant change if introduced and pharma companies will have to alter their marketing strategies,” said Bhavik Narsana, Partner, Khaitan & Co.

“The Finance Minister spoke about bringing medical devices into the price control net. The price control on stents last year met some industry resistance. Given medical devices have not been in price control before, industry reactions will be interesting,” said Ajay Bhargava, Partner, Khaitan & Co.

“Draft medical devices rules have been in vogue for quite some time already. It is encouraging to see that the Government will seek to introduce some regulations in the coming year,” said Anand Mehta, Partner, Khaitan & Co.

“Telemedicine levels in India despite the enhanced levels of internet penetration have been quite low. The reference in the budget speech of this important aspect of increasing the healthcare footprint is likely to create new business opportunities,” said Sameer Sah, Associate Partner, Khaitan & Co.

“The budget speech gave emphasis to increasing investment in medical devices’ manufacturing in India. One aspect which should be addressed is the patentability of medical devices, given certain exclusions to patentability, and thus due care needs to be taken while drafting these applications,” said Adheesh Nargolkar, Partner, Khaitan & Co.
Reacting to the budget, Anjan Bose, Secretary General, NATHEALTH, says, "FM's Budget clearly focuses on improving healthcare access for the less privileged and on "preventive & wellness" both of which are very encouraging. Target of transforming 1.5 lakh health sub - centres into health wellness centres is in line with the need of the hour for the Indian citizens."

Pavan Choudary, Director General, Medical Technology Association of India (MtaI), said “The FM's acknowledgment that the Medical Device Rules will be globally harmonised and that this would facilitate investments in this sector is a reflection of the growing understanding of the international interconnectedness of this sector and the importance of global technology & investment infusion."

Charu Sehgal, Partner, Deloitte India, said that though no major healthcare reform has been announced yet it  sends out some signals in the right direction. Given the huge shortage of doctors in the country, long term focus towards restructuring medical education and short term measures to add new seats and training courses in public and private sector are welcome. Also it's heartening to see the government specific's focus on medical devices. Especially the need to harmonize policies to encourage local manufacturing and  improve affordability for patients.
In his reaction to the budget, Dr Srivats Bharadwaj's, Founder and CEO of Vatsalya Dental, said, "At the face of it, from a healthcare perspective, the budget looks positive. The government through their action plan to eliminate kala-azar and filariasis diseases by 2017-18, leprosy by 2018, measles by 2020, and elimination of tuberculosis by 2025  has given an impression that they are serious in prioritising the eradication of these diseases. However, there could have been an allocation and serious focus on Oral Health Promotion as Dental diseases are a significant public health menace have a substantial impact on general health and the quality of life."
Commenting on the new announcement for Healthcare and Startups, Chirag Patel, CEO - KOOH Sports said, “The budget for the first time addressed well being of the nation by changing health centres to well being centres and this is good sign for the health and fitness sector in general and sports in particular. Recognition is the first step to trigger change. Also a further boost on skilling is welcome if we have to create jobs to effect transformation in sports outcomes”.

Echoing similar views, Varun Khanna, chairman of AdvaMed India Working Group and Executive Committee, and managing director, BD India, says, “AdvaMed welcomes the government’s plan to internationally harmonize the new medical device rules and attract investment into the medical device sector. He further adds, “The association is disappointed as the budget missed out on addressing higher import duties deterring introduction of innovative and high-quality devices for better patient care in India. We were hoping for excise duty reduction on medical devices in areas of critical care and duty reductions to  life saving technologies to reduce the cost of treatment and burden on patients. Our industry continues to urge the government of India to implement a separate regulatory framework for the medical devices sector which will enable international and domestic manufacturers better address the needs – availability, affordability and access – of Indian patients and give the much needed fillip to the sector.”

Says Rajesh Mundra, CEO, Truworth Wellness, “From the health and wellness companies point of view one of the significant proposals is setting up of Digi Gaons with tele-medicine centers. This would help increasing the reach of tele-health companies to the rural market as well, thus providing quality care to the bottom of pyramid”.

Ameera Shah, MD and Promoter at Metropolis Healthcare Ltd. Said, “Overall, Financial Minister Arun Jaitley’s budget announcement wasn’t great for the healthcare sector. Certain positive announcement’s like launch of DigiGaon to promote telemedicine and linking aadhaar cards with the health conditions of the citizens is another great initiative undertaken by the government.”

Dr. Rajeev Boudhankar, CEO, Bhatia Hospital says, “Other important issues that did not get attention from the Finance Minister were Tax Incentives for Specified Activities like Tax incentives should have been provided for the following activities of digitization. To boost the ‘Digital India’ initiative of the government, financial incentives/grants should have been provided to institutions that are willing to move towards maintenance of Electronic Health Records (EHR) and Health IT Systems. 250% deduction on investment made for the implementation of EHR should have been extended.

Accreditation - To incentivize hospitals and diagnostic laboratories to undergo accreditation, there should have been 100% deduction on approved expenditure incurred for securing accreditation from National Accreditation Board for Hospitals and Healthcare Providers (NABH) and National Accreditation Board for Testing and Calibration of Laboratories (NABL) respectively.”   

“In order to stay competitive in the overseas market and given the uncertain global climate, it was expected that specific impetus or incentives would be given to innovation in the form of weighted deduction on R&D, incentives for patents, exemptions of certain duties and taxes. These demands remained largely unaddressed, giving no specific reason to cheer for the sector as a whole in 2017–18,” said Utkarsh Palnitkar, National Head – Life Sciences practice, KPMG in India.

Mudit Vijayvergiya, Co-founder, Curofy says, "Being a startup we are happy to hear that government has decided to relax the income tax liabilities applied on startups. The profit deduction period for entrepreneurial juggernauts has also been increased from the previous three out of five years. The startups can now claim 100 per cent deduction of profits for three out of the first seven years.”

“The proposal by the government to formulate new regulations for medical devices is a welcome move. India is one of the fastest growing markets for healthcare in the world; and it is important that the country starts to design and manufacture medical devices that are best in class and follow international standards in quality and compliance. This will not only ensure patient safety but also make the domestic industry globally competitive”, says Suresh Sugavanam, vice president and managing director, UL South Asia.


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