The Union Budget 2023 has given a boost to the pharmaceutical industry by increasing the fund allocation by more than 12 times from Rs 100 crore to Rs 1,250 crore including drugs and medical devices.
Finance minister Nirmala Sitharaman announced today a new programme for research and innovation in pharmaceuticals, which will be taken up through Centres of Excellence.
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“Dedicated multi-disciplinary courses for medical devices will be supported in the existing institutions,” Sitharaman said in her speech.
According to the budget documents, the central government has increased the estimates for the development of the pharma industry to Rs 1,250 crore for the fiscal year 2023-24 against Rs 100 crore last fiscal — a jump of more than 1100%.
While the documents did not list specific areas where funds will be used, it is expected that the budget will focus on promoting research in pharmaceuticals and encouragement to joint public-private medical research at selected laboratories of the Indian Council of Medical Research.
Healthcare and Pharma Welcome Move
Experts praised the government for the new initiative to support research and development in the pharma industry. In fact, the leaders in the industry had urged the Union government to prioritise schemes to enhance innovation and research for drug development.
With evolving global pharma market and increasing competition over vanilla generics, Indian drug makers are keen to re-evaluate their role in the global arena with innovation and technology as their mainstay.
Shuchi Ray, Partner, Deloitte India, said the budget announcements for the healthcare sector have considered the areas of research and development, skill development, awareness, infrastructure and preventive healthcare, which are welcomed.
“Focus on R&D via public-private partnerships (PPP) and benefits to industry are in line with the industry expectations and will help the country in its positioning as an innovation hub,” Ray said.
She concluded that “overall, the announcements are inclusive and far-sighted, giving due importance to the sector.”
Dr Ashutosh Raghuvanshi, managing director and CEO, Fortis Healthcare, echoed similar observations.
Raghuvanshi said government’s greater emphasis on R&D, innovation and results-based financing towards more effective PPP will prove to be beneficial in creating the much-needed shift towards quality and higher value.
“In view of the G20 presidency, the announcements provide a strong impetus to strengthen the Indian healthcare ecosystem,” he said.
Similarly, commander Navneet Bali, regional director at Narayana Health-North, said the Union Budget 2023 looks progressive and inclusive for the healthcare sector. “We are glad to know that ICMR labs will be made available for research by public and private medical college faculty and private sector R&D teams.”
He lauded the move of setting up 150 new nursing colleges. “This move would enhance our capacity and fill the gap in terms of human resources. Also, the proposed Mission to eliminate sickle cell anaemia by 2047 is a very positive step.”
Anurag Kashyap, Director, TR Life Sciences — a healthcare consultancy –, pointed that the industry was also expecting some incentives for green hospital projects, public-private partnerships, provisions for long-term credit facilities, a dedicated regulator for the hospital sector and rationalisation of import duty on medical equipment.
“Some of our expectations remain unfulfilled, however, we are hopeful that in the ‘Sapthrishi’ model of development, the government would find out some ways to consider the much-needed reforms,” he added.
Overall, Kashyap said the budget manifests “a holistic vision for healthcare” but, in real terms, “the sector needs more to achieve the target of 2.5% of GDP”.
Medical Device Industry ‘Anguished’
The Association of Indian Medical Device Industry (AIMED) has expressed disappointment with the announcements in the budget.
Rajiv Nath, forum coordinator on behalf of the Indian Medical Devices Industry, expressed “disappointment and anguish” over the Union Budget 2023 giving “cold shoulder” to the sector.
“It is highly disheartening that against industry’s expectations and assurance by the various departments, the government has not announced any measures to help end the 80-85% import dependence forced upon India and an ever-increasing import bill of over Rs 63,200 crore,” Nath said.
He said though Prime Minister Narendra Modi has urged India to become Atma Nirbhar in medical devices yet the imports continued to grow at an “alarming” level at 41% in FY22.
India imported medical devices worth Rs 63,200 crore in 2021-22, up 41% from Rs 44,708 crore in 2020-21, according to the Union Ministry of Commerce and Industry.
The only positive announcement was skilling of manpower for manufacturing of medical technologies, he added.
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