The recent Union Budget has proposed an expansion of Patient Assistance Programs (PAP), introducing a full exemption from basic customs duty (BCD) for 37 medicines as long as they are provided free of charge to patients.
This initiative includes medications from ten multinational pharmaceutical companies participating in these programs. PAPs aim to alleviate the financial burden on patients by offering costly treatments for conditions such as cancer at little to no cost or at a reduced price. Industry experts, including Hitesh Sharma, a partner and national life sciences tax leader at EY India, noted that participating companies should achieve a cost reduction of at least 5%, which would enhance patient access under these programs.
In her Budget speech, the Finance Minister mentioned, “Specified drugs and medicines under Patient Assistance Programs operated by pharmaceutical companies are completely exempt from BCD, provided these medicines are supplied free of cost to patients. I propose to add 37 more medicines along with 13 new patient assistance programs.”
Anil Matai, the Director General of the Organisation of Pharmaceutical Producers of India (OPPI), expressed that the BCD exemption would not only expand program access for more patients but would also encourage additional companies to initiate similar initiatives. Experts believe that patients suffering from cancer, rare diseases, and various chronic conditions may benefit significantly, as the Budget has exempted 36 life-saving drugs and medicines from BCD. Additionally, another six essential medicines were included in a category with a reduced customs duty of 5%. The Finance Minister also stated that full exemptions and concessional duties would apply to bulk drugs necessary for the production of these medicines.
However, advocates for public health have called on the government to ensure that these benefits are truly passed on to patients. KM Gopakumar from the Third World Network raised concerns about the lack of transparency in drug pricing, reminding that similar initiatives in the past have not provided significant benefits to patients.
Moreover, the Budget emphasized the establishment of daycare cancer centers in all district hospitals over the next three years, with a target of opening 200 centers by the 2025-26 fiscal year.
