Union Budget 2024: Cancer Drug Relief & Mixed Healthcare Sector Reactions

As the Modi 3.0 government begins its tenure, the Union Budget 2024-25 was unveiled on Tuesday, introducing a series of notable healthcare reforms and allocations aimed at tackling critical public health challenges. The Health Ministry has been allocated Rs 90,958.63 crore, marking a 12.9 per cent increase from the previous budget. Of this total, the Department of Health and Family Welfare will receive Rs 87,656.90 crore, while the Department of Health Research will be allocated Rs 3,301.73 crore.

Key Announcements in Healthcare

Among the significant highlights of the budget are the exemption of customs duty on components of X-ray tubes and digital detectors, and the exemption of three additional cancer medicines from customs duties. This is a crucial step, as India has been identified as the cancer capital of the world. Additionally, the government’s commitment to developing Digital Public Infrastructure (DPI) aims to enhance service delivery and support the integration of healthcare

Another significant announcement was the building of a new medical college in Bihar. Furthermore, social security on health saw an increase from 5.7 per cent to 9.3 per cent.The allocation for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana increased from Rs 7,200 crore to Rs 7,500 crore, extending coverage to ASHA, Anganwadi workers, and helpers across the country

Expert Reactions

Exemption of Cancer Medicines

Union Finance Minister Nirmala Sitharaman announced the exemption of three cancer treatment medicines from basic customs duty. This move has been widely appreciated by healthcare professionals.

Kunal Sehgal, Managing Director and Chief Pathologist at Neuberg Sehgal Path Lab, remarked, "While presenting the Union Budget 2024-25 in Parliament on Tuesday, Union Finance Minister Nirmala Sitharaman made a pivotal announcement that three cancer treatment medicines will be exempted from basic customs duty. This decision is a crucial step in addressing the rising challenge of chronic diseases, particularly cancer, which is emerging as a significant public health problem in India. By exempting these essential drugs from customs duties, the government aims to make life-saving treatments more affordable and accessible to patients. This move reflects a strong commitment to public health and aims to alleviate the financial burden on families affected by cancer. Sitharaman's announcement is expected to significantly improve healthcare outcomes and support the fight against chronic diseases, ensuring that patients receive timely and effective treatments without the added strain of high medical costs."

Kunjal Patel, Molecular Oncopathologist at Neuberg Centre for Genomic Centre, added, “While presenting the Union Budget 2024-25 in Parliament on Tuesday, Union Finance Minister Nirmala Sitharaman announced a significant healthcare reform, stating that three crucial cancer treatment medicines will be exempted from basic customs duty. This move aims to make life-saving medications more accessible and affordable for patients battling cancer, reflecting the government's commitment to improving public health. The exemption is expected to enhance the overall quality of healthcare and support the fight against cancer across the nation.”

Allocation for Health and Wellness

Tetsuya Yamada, Managing Director of OMRON Healthcare India, praised the increased allocation for health and wellness, emphasising digital health infrastructure and telemedicine. "We commend the healthcare initiatives outlined in the Union Budget. The increased allocation for health and wellness, coupled with a strong emphasis on digital health infrastructure & telemedicine, is a significant step towards boosting accessibility and efficiency of healthcare services through digital means. OMRON Healthcare has long been dedicated to empowering individuals with the tools needed to monitor and manage their health effectively. The proposed budget's support for innovations in healthcare aligns perfectly with our commitment to provide easily accessible and user-friendly health monitoring solutions. We believe that these measures will not only improve the quality of healthcare but also foster a culture of proactive health management among citizens. We look forward to contributing to this transformative journey and supporting the government's vision of a healthier, more resilient India."

Ashutosh Niranjan, Dean of Noida International Institute of Medical Sciences (NIIMS) & Hospital, praised the FY2024 budget for its healthcare focus. "The budget increases health sector funding from Rs 79,221 crore to Rs 90,171 crore, with notable boosts for the Ayushman Bharat scheme and a new cervical cancer immunisation program. The U-WIN program and a rise in biotech R&D funding to Rs 1,100 crore highlight the government's commitment to innovation. To improve healthcare infrastructure and social insurance, raising GDP spending on health to 2.5 per cent is crucial, with a projected need for 2 billion square feet of new facilities."

Impact on Medical Equipment and Domestic Manufacturing

Sangita Reddy, Joint Managing Director of Apollo Hospitals Group, highlighted the strategic move to change the Basic Customs Duty (BCD) for X-ray tubes and flat panel detectors. “The budget announcement demonstrates the Government’s commitment to enhancing the healthcare system through a holistic approach. The change in the Basic Customs Duty (BCD) for X-ray tubes and flat panel detectors under the phased manufacturing program is a great strategic move. This will reduce costs and give a boost to domestic manufacturing capacity of India. Further, the announcement of the exemption of customs duties on three cancer medications is a notable step in improving treatment accessibility and affordability for a major health challenge. This move shows the Government’s dedication to addressing the cancer burden and alleviating patient financial stress. In the interim budget, the government allocated Rs 90,171 crore for the health sector, this investment was crucial for developing sustainable healthcare strategies across India. Additionally, the budget had already announced health coverage for individuals over 70 up to Rs 5 lakhs and an innovation fund, which are critical for advancing healthcare. These moves have helped the healthcare sector to strengthen infrastructure,” she said.

Raj Gore, CEO of Healthcare Global Enterprises (HCG), stated, "We whole-heartedly welcome the Union Budget proposal to exempt three more cancer medicines - Trastuzumab deruxtecan, Osimertinib and Durvalumab – from customs duties to provide relief to cancer patients. The budget also proposed changes in the Basic Custom Duty (BCD) on X-ray tubes and flat panel detectors used in medical X-ray machines under the Phased Manufacturing Programme to increase domestic value addition for establishment of X-ray machine manufacturing ecosystem in the country. These landmark sector-specific customs duty proposals for medicines and medical equipment under Indirect Taxes will result in substantial savings in procuring life-saving medicines and ease the burden of cancer care. The speedy implementation of key measures such as these is crucial to effectively address the cost challenges in the Indian healthcare sector thus making it affordable, accessible and equitable to all. However, as the industry has been pushing for health allocation to be increased to 2.5 per cent of GDP, the government’s earmarking of Rs 89,287 crore, is only marginally higher than the FY 24 allocation of Rs 88,956 crore for developing, maintaining and improving the country’s healthcare system, is far from encouraging to the Indian healthcare sector as a whole. Healthcare should have gained more priority in Union Budget 2024."

GSK Velu, Chairman & Managing Director of Trivitron Healthcare, Neuberg Diagnostics, and Maxivision Eye Hospitals, concluded, "The budget's fiscal incentives for R&D and CAPEX in medical devices are promising. The introduction of a health cess on customs duties aims to fund Ayushman Bharat and ensure affordable healthcare. This comprehensive approach reflects a commitment to innovation and self-reliance in medical technology."

Overall Healthcare Budget and Future Prospects

Prathap C. Reddy, Founder & Chairman of Apollo Hospitals, appreciated the budget's alignment with previous commitments, focusing on workforce enhancement and the exemption of customs duties on additional cancer medicines. "In Budget 2024, the government’s health agenda echoes its earlier commitments – focusing on addressing workforce needs and enhancing cancer care accessibility by exempting three more cancer treatment drugs from customs duties. These announcements underline a steady, consistent approach to advancing healthcare and addressing critical public health challenges in India. Enhancing the capabilities of the workforce, particularly in rural areas, and making cancer treatment more accessible are crucial steps towards improving the overall health of the nation. However, addressing gaps in cancer care requires collaboration between communities, healthcare providers, and policymakers. This approach ensures that patients receive timely and effective treatments, contributing to improved healthcare outcomes and quality of life. The announcements made in the Union Budget 2024, including the continued support for workforce development and cancer care, are commendable and reflect a strong commitment to public health."

Nikhil Chopra, CEO & Whole Time Director of JB Pharma, expressed optimism about the Union Budget's provisions for the pharmaceutical sector. He lauded the government's increased focus on skilling, job creation, and the pharmaceutical PLI, stating that these initiatives will significantly boost the industry's growth stating, “The government's renewed focus on skilling and job creation, coupled with the increased PLI allocation for the pharmaceutical sector, presents a tremendous opportunity for our industry. This budget's commitment to empowering women's participation in the workforce enables us to enhance India’s workplace DEI status quo while building a future-ready workforce, driving innovation, and solidifying India's position as a global pharma leader.The emphasis on digital public infrastructure applications, particularly in healthcare, is transformative. It has the potential to revolutionise access to medicines and healthcare services nationwide. Addressing the skilling gap to generate productive employment is crucial for preparing the future workforce. Initiatives to reduce customs duties and promote manufacturing further strengthen India's position as a global manufacturing hub.
The expanded PLI allocation for the pharma sector is a strategic move that will undoubtedly spur growth and innovation within the industry. The proposed Rs1 lakh crore financing pool for private sector-driven research and innovation aligns perfectly with the industry’s vision of advancing cutting-edge developments and commercial-scale innovations.As an industry, we are committed to leveraging these policy directions to drive holistic healthcare, digital transformation, and inclusive growth, ultimately paving the way for a healthier & holistically  empowered India”

However, some experts like B S Ajaikumar expressed disappointment over the marginal increase in healthcare allocation, arguing it falls short of addressing the sector's pressing needs and priorities. He also pointed out the lack of rationalisation in the tax structure around life-saving drugs and emergency treatments. He said, “We welcome the measure to exempt the three cancer drugs, viz Trastuzumab deruxtecan, Osimertinib, and Durvalumab from basic customs duty, but given that these are exorbitantly priced, it won’t make much of a difference for the patient, especially those from low income groups. The intent is fine, but the outcome leaves much to be desired. The net effect of the proposed changes in the basic customs duty for X-ray tubes and flat panel detectors for use in medical X-ray machines calls for a granular study, but the effort is nevertheless laudable.”

Ajaikumar further added, “The marginally higher allocation to healthcare again has woefully fallen short of addressing its pressing needs and priorities, and it pales into insignificance before the substantial allocations to defence and other priority sectors. Time and again, we have seen the pain points going unaddressed which can only be resolved through an universal health coverage to enforce uniformity of treatment through the cross subsidy model, which can in turn arrest the financial strain and debt traps that the poor and deprived perennially face. There is no rationalisation of tax structure around life-saving drugs and emergency treatments. I was disappointed to see the key area of GST unaddressed, as also with no move to incentivise the private sector for bridging the urban-rural divide in the accessibility and affordability of healthcare services. Talking of education, it is high time we introduce the proven voucher system to transform the primary and secondary education in a sustainable manner.”

“The concessions on personal taxation front are heartening, but there is no stimulus to economic growth. Countries like Singapore have reaped rich dividends from their favourable policies for citizens and entrepreneurs including tax breaks, low corporate tax, and no burden of capital gains tax. Why can’t India not follow suit?”, he concluded.

The Union Budget 2024-25, under the Modi 3.0 government, has introduced significant reforms and allocations aimed at improving the healthcare sector in India. While the initiatives have been met with a mix of optimism and criticism, they represent crucial steps towards enhancing the accessibility, affordability, and quality of healthcare across the nation.