Biocon Urges Indian Government to Exempt Cancer, Rare-Disease Drugs from Tax in Budget

In a significant move to enhance affordability and accessibility of life-saving drugs, India's leading biopharmaceutical company, Biocon, has urged the Indian government to exempt cancer and rare-disease drugs from tax in the upcoming Union Budget 2025. The company, chaired by Kiran Mazumdar Shaw, has welcomed the removal of Customs duty on three cancer drugs in the Union Budget 2024-25 and has called for the government to consider GST exemption for all cancer drugs to make cancer care more affordable for patients.

The pharmaceutical industry in India is a critical player in the global medical supply chain, commanding a significant share of over 20 percent. However, the industry ranks 10th globally in terms of value addition, highlighting the need for improved local value addition capabilities. Experts have emphasized the importance of appropriate policy interventions to address this gap, including tax reforms and incentives for research and development (R&D).



One of the key challenges faced by the Indian pharmaceutical industry is the high cost of R&D, which is both expensive and time-consuming. The process of developing new drugs involves multiple stages, from initial research and development to clinical trials and regulatory approvals, often costing billions. Many Indian companies struggle to sustain the necessary long-term investments in R&D due to limited financial resources. Tax reliefs and incentives can alleviate these financial pressures, allowing companies to allocate more resources to R&D.

In addition to financial pressures, Indian drugmakers also face limited access to advanced technology, which is increasingly crucial for innovation in the pharmaceutical sector. Tax incentives can foster collaboration between Indian pharmaceutical companies and global industry leaders, bringing advanced technology and expertise to India. This can be achieved through joint ventures, technology transfer agreements, or public-private partnerships, all of which would bring advanced technology and expertise to India.



Streamlining the regulatory framework can also reduce the time and costs associated with launching new drugs, making innovation more attractive and feasible for Indian drugmakers. A more efficient regulatory framework through a 'one regulator' approach can simplify operations and reduce complexity, enabling companies to focus on innovation and growth.

The Indian government has taken several steps to support the pharmaceutical industry, including the introduction of the Production Linked Incentive (PLI) scheme. So far, investments worth Rs 25,813 crore have been made, and 56,171 new jobs were added as of September 2023. The PLI scheme was also launched for medical device manufacturing, with the government giving permission for investments of Rs 2,000 crore to 26 investors. These initiatives have contributed to the growth of the Indian pharmaceutical sector, which aims to reach $120-130 billion by 2030 and $350-400 billion by 2047.



In conclusion, Biocon's call for tax exemptions on cancer and rare-disease drugs in the Union Budget 2025 is a critical step towards enhancing affordability and accessibility of life-saving medications in India. By addressing the financial pressures, limited access to advanced technology, and streamlining the regulatory framework, the Indian government can foster innovation and growth in the pharmaceutical industry. This, in turn, will contribute to the overall economic growth and healthcare outcomes in the country.