Move to axe duty exemption on life-saving drugs flayed

RSTV Bureau
File photo-PTI

File photo-PTI

Central government’s move to withdraw the custom duty exemptions on the imports of the life-saving drugs has come under criticism. The Central Board of Excise and Customs (CBEC) had last week issued a notification withdrawing exemption of levy of basic customs duty on as many as 74 drugs. Post the move by CBEC, several life-saving drugs used for treating cancer and HIV, will see sharp rise in prices.

Indian biopharmaceutical major Biocon’s chief Kiran Mazumdar Shaw opined that levy of any kind of duty for these medicines does not resonate well with India’s affordable healthcare mission.

“We should, as a country, exempt life saving drugs from any kind of levies. Because after all you want affordable access and that is what you are basically touting as your healthcare mission then you know levying any kind of duty on life saving drug does not resonate well,” Mazumdar-Shaw, the Biocon CMD told a TV news channel on Sunday.

Seconding Mazumdar-Shaw’s view, the Organisation of Pharmaceutical Producers of India Director General Ranjana Smetacek told a news agency that the government move will be detrimental to Indian patients depending on life-saving drugs.

“Withdrawal of concessional custom duty for these drugs will adversely impact patients’ interest as it may lead to increase in prices. This is in complete contradiction to the public interest as mentioned in the notification,” she said adding that the industry body was not consulted on this move.

Post the withdrawal of import duty exemption, the prices of some of the medicines are likely to increase by 22 to 35 per cent, according to industry analysts.

The medicines on which customs duty will now be imposed include the ones used for treating kidney stones, cancer chemotherapy and radiotherapy, life-threatening heart rhythm disorders, diabetes, Parkinson’s disease, bone diseases and antibiotics to treat infections.

Besides, drugs used for bacterial infections, leukemia, anesthetic medication, allergies, arthritis, lupus, human immunodeficiency virus (HIV) or hepatitis B virus cells, and ulcerative colitis might also see spurt in prices.

Leena Menghaney, lawyer representing Medicins Sans Frontieres, the international humanitarian agency on its campaign for affordable medicines, said imposition of customs duty is expected to affect patients who ask for or need drugs supplied exclusively by foreign manufacturers.

“They should have been consulted before the waiver was removed,” Menghaney said, adding there is now only little bit of production of these drugs domestically which is insufficient to meet the needs of haemophilic patients.

However, a section of industry experts believe the move seems to be in line with the government’s objective to rationalise the duty exemptions.

“The withdrawal of exemption from basic customs duty for certain drugs and medicines including life-saving drugs is intended to provide protection to the domestic manufacturing industry and enhance the attractiveness of make in India initiative,” KPMG India Partner and Head of Indirect Tax Sachin Menon said.

“These changes signify the intention of the government to promote domestic manufacture of these items as imports would now become more expensive,” Deloitte in India Senior Director MS Mani claimed.

(With inputs from the PTI)