Hyderabad: India’s pharmaceutical industry is urging the government to introduce tax incentives and financial support for research into innovative drugs ahead of Prime Minister Narendra Modi’s upcoming federal budget announcement, expected in July. This budget marks Modi’s first major policy initiative in his third term as Prime Minister.
Experts emphasize that Indian drug manufacturers must pivot towards developing complex drugs beyond generics to maintain their reputation as the ‘pharmacy of the world’ known for affordable medicines.
“If the Indian government can provide income tax exemptions for 5-10 years for any new molecule developed domestically…this could catalyze innovation at the grassroots level, prompting companies to invest in innovative research,” remarked Krishna Ella, Chairman of Bharat Biotech, during an event in Hyderabad on Friday. Bharat Biotech notably developed Covaxin, India’s first indigenous COVID-19 vaccine.
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India currently ranks as the world’s third-largest drug manufacturer by volume, after the United States and China, with its pharmaceutical market expected to reach $130 billion by the end of the decade. The country is renowned for its production of generic drugs, which are cheaper alternatives to branded medications.
In March, research firm Bernstein emphasized the need for India to establish a domestic market where innovative drugs can be financially viable. “Investing heavily in clinical trials without adequate pricing power is not a sustainable business model for pharmaceutical companies,” the firm stated in an open letter to the Prime Minister. Bernstein also advocated for insurance coverage for novel drugs and alignment of regulatory standards to foster innovation.
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Since 2020, India has implemented incentives to promote manufacturing across various sectors, including pharmaceuticals, yet these benefits do not extend to manufacturers of innovative drugs. “The government is likely assessing the effectiveness of existing schemes…but the industry eagerly awaits a comprehensive policy to bolster research and development,” noted Partha Saradhi Reddy, Chairman of HIV drugs maker Hetero Drugs, in an interview with Reuters.
According to the Pharmaceuticals Export Promotion Council of India (Pharmexcil), India’s export sales, predominantly in generics, are projected to double to $55 billion by 2030. Raja Bhanu, Director General of Pharmexcil, stressed the importance of innovative strategies to maintain India’s global pharmaceutical leadership.
