Fear of duty hike raising drug prices unfounded

The withdrawal of customs duty exemption on 76 drugs has led to a hue and cry with many doctors and multinationals claiming that this would make these life-saving drugs costlier. A closer look suggests the concern is unwarranted as 61 of these are bulk drugs attracting just 5% extra duty, which will translate into a negligible 2-3% increase in the cost of the finished drugs. The remaining 15 are finished drugs and will attract 35% duty, but these have several Indian generic versions selling at a fraction of the imported cost.

The government withdrew the exemption on these drugs on the grounds that it would help boost the domestic industry. “The doctors do not even seem to know the difference between bulk drugs and finished drugs. They don’t seem to have understood that a majority of these drugs will see only a 5% increase. It is an uninformed debate. Doctors are merely saying what the MNCs want them to say,” said Dr Amit Sengupta of Jan Swasthya Abhiyan, a network of organisations working on healthcare issues.

India imports most of its requirement of bulk drugs, largely from China. There has been growing concern about this dependence on imported bulk drugs, with some even calling it a security threat. Local manufacturing, it is argued, would not only make India more self-reliant in drug manufacture, but also give the government greater control over the quality of bulk drugs.

“Only the top 15% of the population can afford multinational drugs. For the rest there are generic options. I trust the drugs of some generic companies. Many others have quality control issues. The government should ensure strict quality control on generics so that I can prescribe all of them with confidence,” said Dr Purvish Parekh, an oncologist formerly with Tata Memorial Hospital in Mumbai.

“Whisper campaigns about quality of generic drugs is an old strategy of multinational firms. Half the world is on India-made anti-retroviral drugs and doing very well,” said Paul Cawthorne, who headed MSF’s access campaign for Asia.