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New Delhi, July 25, 2024 – In a significant move towards improving healthcare accessibility and affordability, Union Finance Minister Smt. Nirmala Sitharaman announced several key initiatives in the Union Budget 2024-25. Among the highlights were the exemption of three additional cancer medicines from customs duty, revised customs duties on X-ray machine components, increased budget allocation for the National Health Mission (NHM), and the launch of initiatives to drive digital public infrastructure and local economies.
Exemption of Cancer Medicines from Customs Duty
The Finance Minister revealed that three crucial cancer drugs—Trastuzumab Deruxtecan, Osimertinib, and Durvalumab—are now exempt from customs duty. This decision comes as a response to the pressing need for affordable cancer treatment in a country with approximately 27 lakh cancer patients. These drugs are used to treat various cancers: Trastuzumab Deruxtecan for breast cancer, Osimertinib for lung cancer, and Durvalumab for both lung and biliary tract cancers. This exemption aims to make these life-saving medications more affordable for patients.
Revised Customs Duty on Medical X-ray Components
In another move to bolster the healthcare sector, the budget revised customs duty rates on X-ray tubes and flat panel detectors used in medical X-ray machines. These changes are anticipated to lower costs and enhance the availability of these components, thereby supporting the domestic medical device sector. By reducing the cost of advanced medical imaging equipment, the government aims to make healthcare more accessible and affordable.
Increased Allocation for the National Health Mission
The budget also saw a significant increase in the allocation for the National Health Mission (NHM), with funding rising by approximately Rs 4,000 crore, from Rs 31,550 crore to Rs 36,000 crore. The NHM primarily focuses on primary and secondary healthcare service delivery across the nation. This increased funding underscores the government’s commitment to enhancing public healthcare facilities and reducing out-of-pocket expenses for the populace.
Digital Public Infrastructure for Innovation
To drive productivity, business opportunities, and innovation, the budget proposed the development of Digital Public Infrastructure (DPI) applications on a population scale. These applications will enhance various sectors, including credit, e-commerce, education, health, law and justice, logistics, MSME services, delivery, and urban governance. This initiative aims to leverage digital technology to foster widespread innovation and efficiency.
Launch of 100 Weekly “Haats”
In a bid to invigorate local economies and enhance the street food experience, the budget proposed the development of 100 weekly “haats” or street food hubs in select cities. These hubs are expected to boost local economies by providing organized spaces for street vendors, thereby enhancing urban development and community engagement.
Background and Industry Impact
Cancer Drugs
The exemption of customs duty on cancer drugs comes in the wake of their significant market presence and high costs. Trastuzumab Deruxtecan, for instance, is a scheduled drug under the National List of Essential Medicines (NLEM) 2022, with a ceiling price of Rs. 54,725.21 per vial. The annual turnover for its different variants exceeds Rs. 276 crores. Osimertinib and Durvalumab, although non-scheduled, have annual turnovers of Rs. 52.26 crore and Rs. 28.8 crore, respectively. The customs duty exemption is expected to lower the financial burden on patients significantly.
Medical X-ray Manufacturing
To promote domestic manufacturing, the Phased Manufacturing Programme (PMP) for medical X-ray machines and components was introduced in January 2021. Despite this, the domestic capacity for producing X-ray tubes and flat panel detectors is still developing. The revised customs duty rates, as notified by the Ministry of Finance, aim to support this growing industry by making components more affordable while fostering domestic production capabilities.
The Union Budget 2024-25 sets a clear path towards enhanced healthcare accessibility, robust domestic manufacturing, and vibrant local economies, reflecting the government’s commitment to holistic development and innovation.
