Financial Daily from THE HINDU group of publications
Monday, Dec 26, 2005
Financial Daily from THE HINDU group of publications Monday, Dec 26, 2005 |
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Industrial Policy Industry & Economy - Pharmaceuticals Drug cos may not have to swallow a bitter tax pill — New policy may prescribe sops for filing patents, clinical trials P.T. Jyothi Datta
Mumbai , Dec. 25 DRUG makers putting their money on research may soon have reasons to celebrate. The apex ministry for pharmaceuticals has recommended that tax sops given to drug companies be broadbased to include, among other things, expenses incurred on filing patents or during clinical trials. Filing patents abroad in developed markets can be expensive, an official with the apex Chemicals and Fertilizers (C&F) Ministry said. Clinical trials done locally will also be given tax support, he told Business Line. This and a string of research-oriented sops for drug companies recommended by the C&F Ministry are expected to be announced through the proposed new pharma policy or in the Union Budget next February. The proposed new drug policy, expected to be circulated for discussion next week, has also upgraded the `gold standards' outlined by the Mashelkar Committee of 1999. Drug companies meeting these research-related criteria will be eligible for more sops. Drug companies currently receive a weighted deduction of 150 per cent on research expenditure, which they can avail themselves of on their in-house research. The scheme was to expire in 2005, but the Union Budget earlier this year extended it to 2007. The C&F Ministry has further recommended that the scheme be available till 2015. As per the gold standards outlined by the Ministry, drug companies should spend about three per cent of turnover or Rs 50 crore on research and they should have about 200 scientists on a regular basis. They must have a manufacturing facility in India that should have regulatory approvals from at least two developed markets and the company should have filed at least 10 patent applications in India, the official said. Other sops such as halving the excise duty to eight and a joint public-private partnership on cancer and AIDS drugs are also expected.
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