Union Budget 2025 | Biocon urges government to exempt cancer, rare-disease drugs from tax

Rajiv Singhal, General Secretary of the All India Organisation of Chemists and Druggists, said that usually there is a 12% tax on medication for chronic diseases

Hyderabad: India should eliminate tax on drugs for cancer treatment and for chronic and rare diseases, the chairperson of major drugmaker Biocon Ltd said ahead of Prime Minister Narendra Modi's budget announcement, expected next month.

Other than cosmetic surgeries, drugs used for treating chronic diseases such as diabetes and cancer should be exempted from tax, Kiran Mazumdar-Shaw told Reuters on Friday.

"In India most of the expenses on medicines are out of pocket - even diagnostic scans are very expensive," she said, urging the government to consider making lifesaving therapies affordable and waiving tax on them.

"All cancer-related drugs are expensive. Any drug used for chronic therapy with a monthly cost of treatment exceeding 5,000 rupees ($60) should also be exempted from tax," Mazumdar-Shaw said.

Calls to government representatives over the weekend seeking comment went unanswered. The government in July exempted three cancer drugs from customs duty and slashed taxes on some of them.

There is usually a 12 per cent tax on medication for chronic diseases, said Rajiv Singhal, general secretary of the All India Organisation of Chemists and Druggists.

"In a price-sensitive market like India, the tax is a burden on the patient. Government should not look at profitability when it comes to medicines which are not a luxury," he said.

To make cancer care more affordable in price-sensitive India, Mazumdar-Shaw said, the government must also cut import duties for high-tech instruments, input materials and consumables used to develop life-saving precision medicines.

"This will make a big difference to patients," she said. India's import tax on medical equipment is as high as 36 per cent.

Mazumdar-Shaw's Immuneel Therapeutics startup is working on providing cell therapy.

India's pharmaceutical industry, which counts the US as one of its largest markets, hopes to take advantage of expected trade tension between China and the administration of Donald Trump, who retakes the White House on Monday.

"I think the Trump administration is unlikely to take a strong anti-China stance because they realise that they are dependent on China for many things," Mazumdar-Shaw said, adding that India stands to gain as countries look to limit their reliance on China after Covid-19.

($1 = 86.5710 Indian rupees)