The Hindu Business Line : Life saving drugs to cost less

CONSUMERS could well heave a sigh a relief with the Finance Ministry's decision to cut customs duty of specified life saving bulk drugs as this could lead to prices coming down.

The Government on Thursday announced that customs duty on specified life saving bulk drugs, formulations and medical equipment is being reduced to 5 per cent. These items are also being exempted from countervailing duty (CVD) by way of excise duty.

Also, customs duty on parts of artificial limbs and specified rehabilitation aids is being reduced to 5 per cent. These are also being exempted from CVD. Excise duty on medical, surgical, dental and veterinary furniture is being reduced from 16 per cent to 8 per cent. Also, mosquito nets treated with pesticide are being exempted from excise duty.

According to Mr Habil Khorakiwala, Chairman, Wockhardt Ltd, "The Government has moved positively and I am happy the liberalisation process continues. The reduction in duties will benefit the consumer. The last time we had such a reduction, it was reflected in the pharmaceutical prices. Overall, it is a welcome move."

A spokesperson for Ranbaxy Laboratories Ltd said the impact on the prices would be known only after going through the fine print and the list of drugs is available. But overall, it would bring down the prices of drugs of life-threatening ailments related to cardiac problems, oncology as well as HIV. "The custom duty cut on non-farm goods including bulk actives, intermediates and removal of additional customs duty brings us closer to global tariff rates and will help India become competitive globally. There are several lists of life saving drugs used by different bodies hence the overriding need is to define one common list and validate it to ensure inclusion of products that are truly lifesaving. Since the Government is sacrificing revenue, there is need to ensure this excise duty cut benefits the consumer in the form of lower medication price," said Mr Dilip Shanghvi, Chairman and Managing Director, Sun Pharmaceutical Industries Ltd.

The reduction in duty of hospital equipment is also seen as a step in the right direction. Mr Ratan Jalan said, "Life threatening ailments related to cardiac or neurology are not restricted to one income segment. The reduction improves the affordability of healthcare and this is important in the absence of health insurance."

However, the Indian Pharmaceutical Alliance (IPA) has said that there must be parity between the domestic companies, which manufacture the drugs, and companies that rely on imports.

"The Government has to specify that if CVD has been removed for imports then the local manufacturers should also be exempted from excise duty. Otherwise the domestic manufacturers would be at a disadvantage. We are not very clear on this," said Mr D.G. Shah, Secretary General, IPA.

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