Pharma Tips

Budget 2017: Major announcements for Pharma & healthcare

By: Pharma Tips | Views: 3378 | Date: 01-Feb-2017

The government plans to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and use of generic medicines, finance minister Arun Jaitley announced in the Union budget for 2017-18.


Budget 2017: Major announcements for healthcare

Mumbai: The government plans to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and use of generic medicines, finance minister Arun Jaitley announced in the Union budget for 2017-18.

The minister also said that new rules will be formulated for medical devices, which will help in reducing costs of such devices. “These rules will be internationally harmonized and attract investment into this (medical devices) sector,” Jaitley said in his budget speech.

The government has already brought coronary stents under price control and asked the National Pharmaceutical Pricing Authority to fix its ceiling price. This move has been met with resistance from the makers of medical devices in the country.

“The Medical Council had recently amended its guidelines to encourage doctors to prescribe generic names of medicines. In the budget speech, it has been indicated that changes may also be introduced to the Drugs and Cosmetics Rules along similar lines. This will be a significant change if introduced and pharma companies will have to alter their marketing strategies,” said Bhavik Narsana, partner at law firm, Khaitan & Co.

The government has also prepared an action plan to eliminate kala-azar and filariasis diseases by 2017-18, leprosy by 2018, and measles by 2020. Elimination of tuberculosis by 2025 has also been targeted.


The Union Budget 2017-18 presented by Finance Minister Arun Jaitley was a dampener for pharmaceutical and healthcare industry on many fronts. Here is what the industry expected and what it got.

Expectation: To increase healthcare spending to at least from current 1.4% to 2.5% of country’s GDP.

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Budget 2017: Drugs and medical devices to be available at reasonable prices

The Modi govt looks to amend Drugs & Cosmetics Rules, form new rules for medical devices, finance minister Arun Jaitley announced in his budget speech

The government has already brought coronary stents under price control and asked the National Pharmaceutical Pricing Authority to fix its ceiling price. Photo: iStock

Drugs and medical devices to be available at reasonable prices

The FM was seen highlighting the government’s endeavor to ensure the availability of medicines and major medical devices to the patients at reasonable prices. For the same, the budget has high lighted two major developments

  • It has been proposed to amend the Drug and Cosmetic rules to ensure the availability of drugs at reasonable prices to ensure the use of generic medicines.

This is indeed in line with the earlier announcement of the government as well as the Medical Council of India asking medical practitioners to prescribe Generic medicines

  • New rules regarding medical devices will be formulated. These rules would be international harmonized and attract investment to this sector. This will reduce the cost of such devices.
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Budget 2017: No booster dose for pharma and healthcare sector

Budget Status: Largely status-quo, but the government has directionally committed higher spends on healthcare announcing series of initiatives that include commitment to transform 1.5 lakh health sub-centres to health and wellness centres. The government also made projection to eliminate Kala-azar or Leishmaniasis and filaria by 2017; leprosy by 2018; measles by 2020; and tuberculosis by 2025. 

The government also indicated to reduce infant mortality rate (IMR) to 28 by 2019 (39 in 2014) and maternal mortality rate to 100 – 2020 (167 in 2011-13). 

In continuation of Prime Minister Narendra Modi's views, Jaitley said Rs 6,000 financial aid will be provided to pregnant women to cover hospital admission, vaccination and nutritional food.

The government also proposed to setup two new All India Institute of Medical Sciences (AIIMS) at Jharkhand and Gujarat. The goverment also proposed to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines. New rules for regulating medical devices will also be formulated.

These rules will be internationally harmonised and attract investment into

this sector, FM said.

Jaitley also said his government is committed to take structural reforms in the medical practice and education. For senior citizens, Aadhar based Smart Cards containing their

health details will be introduced. A beginning will be made through a pilot

in 15 districts during 2017-18. 

The government has proposed 27 percent increase in allocation for Ministry of Health and Family Welfare to Rs.48,853 crore in the latest budget.


Expectation:  Corporate tax cut 

Budget Status: No mention


Expectation: Extension of time line for weighted deductions of R&D expenditure and adding filing fees and clinical trial expenses under exemption.

Budget Status: No mention


Expectation: Rationalization in excise duty for APIs to bring it in par with formulations.

Budget Status: no mention, the finance minister hasn’t made any changes to excise duty due to impending implementation of goods and service tax (GST)


Expectation: Withdrawal of service tax on health insurance

Budget Status: No mention


Expectation: Exemption of input service tax on support services

Budget Status: No mention 

___________________________________________________________________________________________________________________________

New Delhi: Transform, Energise, Clean India- These were the three major agendas put forward by the Finance Minister, Shri Arun Jaitley today while presenting the 2017 Budget. With more detailed analysis soon to follow, here are the announcements made by the FM that concern the healthcare sector.

Targets

“Poverty is usually associated with poor health . It is the poor who suffer the maximum from various chronic diseases.

Keeping the above framework in mind, the minister was then seen highlighting targets of elimination for many diseases over the coming few years

  • Elimination of Kala Azar and Filariasis – 2017
  • Elimination of Leprosy – 2017
  • Elimination of Measels -2020
  • Elimination of TB by 2025 has also been targeted

Besides this major targets for reduction of IMR and MMR were highlighted as

  • IMR from 39/1000 in 2014 to 28/1000 in 2019
  • MMR- 167 in 2011-13 to 100 in 2018-20

1.5 lakh health sub centres will be transformed into health wellness centres.

Manpower Requirement

It is a known fact that the Indian healthcare chronically suffers from the shortage of manpower. Moreover, the said shortage becomes glaringly visible when it comes to specialist and super-specialist professionals.

To ensure adequate availability of specialist doctors to strength the secondary and tertiary level health care, the minister was seen announcing to take to steps to create ad additional 5000 PG seats per annum. Steps will be taken to

  1. Start DNB courses in big district hospitals
  2. Strengthen PG training in select ESIC and Municipal Corporation hospitals and
  3. Encourage reputed private hospitals to take up DNB courses

The minister announced that the central government would work with the state government to take this task forward.

Regulatory Framework

The Budget 2017 was seen highlighting the government’s commitment to bring into place reforms in the medical education sector as was earlier highlighted by the Niti Ayog appointed committee.

The government is also committed to take the necessary steps for structural transformation of the regulatory framework of the medical education and practice in India

Needless to say, this alludes to the impending National Medical Commission Bill which is soon to be introduced in the parliament.

AIIMS

Two new AIIMS have been proposed in this years budget. These are going to come up in the states of Jharkhand and Gujrat.



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