Pre Budget Expectations From Healthcare Industry Experts 2022-23
Bhupesh Tewari
Editor-in-chief Modern Medi Health
In light of the continuing pandemic, health at present has become the biggest priority for people and nations alike. In India, the pandemic exposed several gaps in the existing healthcare infrastructure however, the government has been quick to come with reforms and policy level changes to address the issues. When it comes to policy level, the Indian government issued notification about retail sale of drugs at door step, issued telemedicine guidelines, launched production linked incentive (PLI) schemes for domestic manufacturing of critical Drug Intermediaries (DIs), Key Starting Materials (KSMs), Active Pharmaceutical Ingredients (APIs), and Medical Devices. To increase competitiveness and improve availability and affordability of medical devices, a scheme for creation of four Medical Device Parks was also announced. The government also announced the launch of the National Digital Health Mission (NDHM). On Jan 16, 2021, the Prime Minister of India inaugurated vaccine drive for two domestically produced vaccines. Despite all these efforts, the healthcare industry is still in need of better support for sustained growth. Here are some of the expectations of the healthcare industry from Union Budget 2022-23.
Chander Shekhar Sibal, Senior Vice President, Medical Division, Fujifilm India
We’re looking forward to building and balancing the country’s healthcare infrastructure with the government’s support as we enter the third year of the pandemic. We hope that the budget delivers a special focus on healthcare to mitigate the devastation from the coronavirus. For this, it will be pertinent to have concrete policies that ensure accessible and affordable healthcare. It would be great to see the allocation of funds within the states as per policy. The timeline of fund clearance should be reduced to clear roadblocks due to a lack of funds.
Saransh Chaudhary, President, Global Critical Care, Venus Remedies and CEO, Venus Medicine Research Centre
The Union Budget should lay a framework to make India the pharmacy of the world with focus on self-sufficiency. The government should go about it by announcing incentives and grants for cost-intensive research, particularly in critical care segments like antimicrobial resistance. The government should enable our R&D-driven pharma companies to compete with top global innovators and secure a significant market share by offering interest subsidies and lower GST on clinical trials and research activities, giving tax concessions to exporters and restoring weighted tax deduction under Section 35(2AB). The finance minister should also earmark funds to strengthen the pharma supply chain and distribution infrastructure and integrate it with latest digital technologies.
Rajiv Nath, Forum Coordinator, AiMED
The government should protect the manufacturing base in India by increasing Basic Custom Duty on import of Medical Devices to at least 15 per cent from the current 0-7.5 per cent duty though WTO Bound rate is mostly 40 per cent. The government needs to put an additional 2 per cent infrastructural development cess on imports that could be used to provide budgetary support to Dept of Pharma that has the mandate to promote manufacturing of medical Devices; build the infrastructure of existing clusters and NIPERs; help to make Medical Devices parks and finance further PLI schemes. the GST needs to be a flat 12 per cent for all medical devices. Also reducing GST to 5 per cent is making Indian products non-competitive to imports as then manufacturers are unable to keep reduced Ex-Factory prices based on lower input costs net of GST.
Dr. Gauri Agarwal, Found & Director, Genestrings Diagnostic and Seeds of Innocence
“During the pandemic, medical diagnostics emerged as the first line of disease containment and the most important public health measure. The World Health Organization’s T3: Test. Treat. Track. initiative to combat COVID-19 has brought diagnostics to the forefront, emphasizing the growing need for better testing capabilities and the importance of quality. People have begun to understand the importance and needs of molecular/genetic testing, and it has invariably resulted in increased investments by large private labs and establishment of more RT PCR labs across the country. In this sense, the government’s collaboration with the private sector, while refocusing on life science, healthcare, and diagnostics, will play a critical role in deciding the future of diagnostics in the country.
Public Private Partnership models as have been proposed earlier by National Health Authority, are promising initiatives of mutual efforts, whereby models for partnership with private diagnostic companies were proposed for bettering the infrastructure, services and quality of testing in Tier II and Tier III Indian Cities. We advocate the principle of introducing high end molecular/genetic testing at a micro level in Indian Cities for reducing the difficulties in accessing quality testing and for strengthening regional medical infrastructure at a micro level. We further are staunch believers of developing indigenous testing technologies, medical devices and related infrastructure to promote an environment of Research and Development in this field. Accordingly, with the help of the Government’s grants, we can collectively formulate and implement cheaper alternatives to expensive genetic testing.”
Dr. Aashish Chaudhry, Managing Director, Aakash Healthcare, Dwarka
“The sudden emergence of Covid-19 prompted the Indian government to nearly double its healthcare budget year over year. As a result, the most prominent area of focus in Budget 2022 is expected to be healthcare. We anticipate that the government of India will increase its healthcare spending in this budget. The last Budget announced a 137% increase in healthcare spending to address some of the gaps. Healthcare accounted for about 1.8 percent of GDP in 2021. We should aim to raise it to at least 2.5 percent of GDP this year. Despite the focus on the Covid-19 pandemic at the moment, it is critical to increase the proportion of spending on preventive healthcare and wellness. Ayushman Bharat is undeniably a positive step toward achieving the goal of universal healthcare; however, more funding is required to ensure its long-term success.”
Ms. Sugandh Ahluwalia Chief of Strategy, Indian Spinal Injuries Centre
“As we enter the third year of the pandemic, our expectations for Budget 2022 are for increased spending on healthcare. India’s total healthcare expenditure is significantly lower than that of other countries. The pandemic has highlighted the critical need for high-quality public hospitals. More public-private partnerships, as well as additional investments, are required to strengthen indigenous manufacturing of medical devices, personal protective equipment (PPE), and raw materials for drugs. Hence, the government must allocate more budget for the healthcare industry. Furthermore, higher tax breaks for the private sector to modernize medical facilities will go a long way toward ensuring better healthcare, more investments, and thus more jobs.”
Mr. Ashok Patel, CEO and Founder Max Ventilator (India’s leading ventilator manufacturer)
“Apart from the need to raise the share of healthcare as a proportion of GDP to at least 2.5 percent in the upcoming budget, the government must also further build on its earlier policy incentives such as PLI schemes and dedicated medtech parks by increasing allocations. In fact, the government should ensure that the smaller medical device players also get included and can benefit from the special schemes and offers that it has extended with a view to catalyze domestic manufacturing and to achieve the larger goal of self-reliance. Given the repeated occurrences of infectious diseases of epidemic scale in recent years, the government should also invest sufficiently into genetic and genomic research, epidemiology and vaccine research besides increasing allocation for broader healthcare R&D. Of course, the diagnostics and preventive health device segment must be given as much policy and financial support as possible. Further, the budget could also incentivize the consumables as well as medical device accessory segments which hold huge promise for the domestic sector. At the same time, adequate allocation must be made for training of personnel required for the deployment and usage of critical care equipment such as ventilators and other similar lifesaving devices.”
Mr. Nikkhil K Masurkar, Executive Director, ENTOD Pharmaceuticals (specializes in Ophthalmology, Dermatology and ENT)
“The pharmaceutical and medical devices industry has gained significant momentum owing to the government’s AatmaNirbhar Bharat initiative. The Union Budget 2022 is expected to build on the Production Linked Incentive (PLI) schemes and encourage continued investments in capacity expansion of sensitive APIs, drug intermediates, complex excipients, biopharmaceuticals and medical devices. While the draft R&D policy focuses on creating an ecosystem for research and innovation, certain tax incentives for the investment in ‘R&D focused funds’, set up for R&D based activities, could be introduced. India should participate in the innovation area at a global level. Along with a scheme similar to the PLI, the government needs to consider tax incentives to attract innovation. Interaction with industry and global players can help India’s pharmaceutical sector to move from a generic manufacturer to an innovator developer and manufacturer for the world. Apart from that, Technology/digital transformation is another key area of focus. In fact, it would be the building block for the much-expected universal healthcare in India. Presently, GST on drugs is taxed under four categories – nil, 5%, 12% and 18%. While a few life-saving drugs are taxed at nil rates, some are taxed at 5 per cent and the majority fall under the 12 per cent GST slab. Extensions of a tax deduction on product development and R&D are some of the other demands of the pharmaceutical sector. The industry also seeks a 150% deduction in tax on in-house R&D.”
Vikram Thaploo, CEO of Apollo Telehealth
India is combating a massive global pandemic with its resources available in the health sector. The health sector is expecting more specific allotments in this year’s budget to mitigate COVID-19 and help in the growth of the telemedicine sector. The telemedicine segment is growing at a rapid pace and in the future, we are expecting more technological innovations to take place in the industry therefore, the budget should be well allocated to the healthcare sector to initiate new innovations to be prepared for the fight with pandemics like covid-19 in the future. It is important especially in a country like India where digital health can truly provide care to areas with short supply of doctors. Increased allocation of budget for promotion of telemedicine, home-based healthcare and national digital health mission implementation will help in building a strong healthcare ecosystem in the country. Telemedicine has potential to improve access to healthcare in remote and rural areas. Home-based healthcare will reduce burden on limited healthcare facilities. Digital Health along with various innovations should be encouraged for India’s future growth in population health. The government should also support private players and startups in this segment to increase the current coverage of the locations including tier-2 and tier-3 cities to provide the advanced healthcare facilities in these areas.
Dr Azad Moopen, Founder Chairman and Managing Director, Aster DM Healthcare
The budget should incentivise the private sector to improve medical facilities in Tier II and III cities and rural areas to bridge the healthcare urban-rural divide. The government should roll out programmes to train new and up-skill the existing manpower to address the shortage of skilled manpower in the healthcare sector. The government should also consider “zero-rating” of GST on healthcare services and the lowest rate of GST on drugs, medical devices, and health insurance premiums to improve affordability. Rationalising the import duty on healthcare equipment is also required.
The government should provide tax incentives for investment in research and development for genetic research and genome mapping which can go a long way in supporting the National Digital Health Mission in early identification of genetic traits and intervention in the prevention of major NCDs.
Last but not the least, the government should increase budgetary allocation for the promotion of digital healthcare to improve access in rural and remote areas. This will not only reduce the burden on our limited healthcare facilities, but also the cost burden on the patients.
Dr Vispi Jokhi, Chief Executive Officer, Masina Hospital, Byculla, Mumbai
The expectations from the union budget for the healthcare sector relating to an increase from 1.8 pr cent in the outlay of the budget to at least 2.5 per cent of the GDP this year. This has become an oft repeated demand. In view of the state of health care following the devastating effect of the covid pandemic some concessions to the industry are in order. These relate to relaxation of norms for treating indigent and weaker section patients free of cost and at heavily subsidized cost. The 2 per cent to be set aside for this purpose should be reduced. he cost of compliance relating to fire safety norms and other infrastructure norms need to be reduced by providing special pricing for equipment relating to the same for hospitals. Going forward a policy to deal with pandemics in the future must be formulated where a consultative approach on public-private partnerships is to be adopted. The budget must provide for you universal health insurance with a reasonable pricing structure to enable charitable trust Hospital to participate in the same.
G Srinivasan, CEO, Athulya
Initiatives to motivate youngsters to take up a career in the healthcare industry and to include continuous development programs in their curriculum to enhance their skills will address the current demand for healthcare professionals. To help our senior citizens meet the rising cost of medical treatments we would request to increase the health insurance age limit for senior citizens and to include provisions to increase the coverage, irrespective of existing medical illnesses. To increase the support and guidance given to start-ups, in the form of incentives towards building and developing healthcare technologies that would aid in early detection, monitoring, screening and diagnosis of health ailments. This will reduce our dependence on international companies for the same. We would also expect the government to considerately reduce the taxes imposed on medical equipment that are very essential, which will result in bringing down the overall medical expenses for an individual with ailments and comorbidities. Eventually, helping our senior citizen community to fight the potential escalations in their medical bills. And finally, to increase the tax benefits against their medical expenses and to revise the existing deduction for senior citizens as the cost of living has increased.
Dr. Ankit Gupta, Managing Director, Park Group of Hospitals.
The healthcare sector should be the focus of this year’s budget. India is facing a new challenge in the form of Omicron, and many more Covid waves are expected in the coming years. As a result, it is critical to strengthen the healthcare infrastructure. In the budget, more funds should be allocated to health expenditure. Incentives should be provided to the private sector so that they can establish Covid Care Centers. A Medical Innovation Fund should be set up to provide capital to companies promoting digital healthcare infrastructure. Many startups are utilizing Artificial Intelligence and Machine Learning to provide detailed reports to patients regarding medical conditions. India is also a popular medical tourism destination due to the availability of skilled labour. Hence, the government should ease visa restrictions and create more green corridors in order to promote medical tourism. We hope that the upcoming budget will serve as a source of motivation for the entire sector, fostering new innovations and development.”
Mr Debajit Sensharma, Group CFO, Paras Healthcare
To begin with, we would like to thank the government for the support provided during and ongoing tough times. Going forward, we expect that the government should look at increasing the healthcare expenditure above 2.5% of GDP and extend the National Health Protection Scheme to all migrant workers, in addition to the BPL population. The need of the hour is to improve healthcare funding with subsidized loans, incentivizing CSR investment by making it a tax-deductible expense, and allocating land for new hospitals. The government should also look at allocating a budget to include trauma centers in Primary Health Centers (PHCs) and Community Health Centers (CHCs) as trauma systems result in high financial costs. Our country has the youngest workforce, but with dropping fertility rates and increasing mutations, there will be a huge spike in healthcare expenses over the next couple of decades. The incidence of lifestyle diseases is doubling every 10 years. Therefore, it is imperative for the government to get genome mapping done, which will assist in collecting the much-needed data to discover cures for complex conditions. In order to achieve the same, the government should promote public-private partnerships for genome mapping projects. Another important aspect for the government to consider is including all the life-saving drugs in the generic category and providing tax cuts on these drugs. However, providing adequate funding for the healthcare sector is needed at this hour, as it will have a substantial impact on the whole economy.”
Mr Praveen Sikri, CEO of Ikris Pharma Network
“In the shadow of the pandemic and the ongoing battle against the virus, the budget should focus on the following areas: first, healthcare expenditure as a proportion of GDP must be raised to at least 2.5% if not more. Second, in view of the rising frequency of infectious diseases, the government must allocate enough resources for genetic and genome research, epidemiological studies besides hiking allocations for general healthcare-related R&D. Third, the budget must also provide for increased investment into infrastructure-building in terms of more critical care and ICU facilities and diagnostic labs along with ambulatory and home care. Fourth, smaller towns and the hinterland too should get sufficient public and private health infrastructure. Accordingly, the private sector should be encouraged with easy and inexpensive loan availability, tax exemptions and other financial and policy support through this budget. Fifth, similar encouragement must also be extended to the pharma and medical device sector. Sixth, the budget should also earmark funds for ramping up infrastructure for medical education and training with an eye on elevating the quality and quantity of our healthcare manpower.”
Final Words
Apart from increasing the health expenditure above 2.5% of GDP, industry experts also expecting some reforms like incentivizing private investment in healthcare infrastructure, expanding health insurance coverage, investing in increasing healthcare manpower and skilling and rationalising GST on healthcare products and services in the upcoming budget of 2022-23.
