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Pharma sector reacts to Union Budget 2021

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Adopting the paperless culture, the Finance Minister Nirmala Sitharaman presented the Union Budget 2021-22 which is considered as a well balanced budget. With a considerable focus on healthcare the government’s intention in driving the investment in advancements in biotechnology, smart medicines, virtual and augmented reality, AI & IoT in healthcare are likely to gain momentum. Although the Union Budget 2021-22 recorded higher budget allocation for COVID 19 vaccine, but the industry’s expectations of increased weighted deduction on R&D upto 200 percent were absent in the announcement. Therefore, the industry experts have expressed that if the government could have waived off some taxes on the input material, its result would have cheered by consumer (patient) directly as medicines would have become more affordable. Besides this, the industry is overwhelmed with the government’s recognition of the Health Sector as a First pillar amongst six pillars

‘Overall, a reassuring Budget with no negative surprises’- Kiran Mazumdar Shaw, Executive Chairperson, Biocon

Overall, a reassuring budget with no negative surprises that has buoyed overall sentiment. Healthcare and well-being has received top priority in this budget, with more than doubling of the outlay to Rs 223,846 crore, including the allocation of Rs 35,400 crore towards COVID-19 vaccination and Rs 64,184 Cr for a new scheme to strengthen the country’s primary, secondary and tertiary health infrastructure.

Other positives include the higher spending on infrastructure, the push for bank privatisation, increased funding for strengthening the public sector R&D and innovation ecosystem, as well, as increasing the FDI cap in insurance from 49 per cent to 74 per cent. Monetisation of public sector assets including land is an important policy plan which must be implemented expeditiously to support the mega infra projects.


‘Healthcare allocation as percentage of GDP dismal; many good measures’
-Sharad Tyagi, President, OPPI

The Organisation of Pharmaceutical Producers of India (OPPI) welcomes the Finance Minister’s proposal to increase the Budget outlay for healthcare marginally from last year’s revised estimates of Rs 69, 234 crore to Rs 71,269 crore. It is also a welcome step that Rs 35,000 crores is allocated for COVID-19 vaccine and the assurance that any additional spending required would be allocated for vaccines.

It has been the demand of the healthcare and pharmaceutical sectors to increase the public spending on healthcare from the below one per cent of GDP level to at least 2.5 per cent of GDP. OPPI is glad to note the Rs 64,180 crore PM AtmaNirbharSwasth Bharat Yojana over six years to develop capacities of primary, secondary, and tertiary healthcare systems, strengthen existing institutions, new institutions, and focus on detection and cure of new diseases.

OPPI also welcomes the support to rural and urban health and wellness centers, public health labs, strengthening the National Centre for Disease Control (NCDC, connecting the Integrated Health Information Portal to public health labs, setting up new public health units at the borders and in the country, setting up emergency operation centers, bio-safety laboratories and regional virology centres.

OPPI also welcomes the proposal to amend the Insurance Act, 1938 to increase the permissible FDI limit in insurance sector from 49 per cent to 74 per cent to allow foreign ownership and control with safeguards. This would help global health insurance companies to have a focused interest in the country. However, it has been disappointing that the Finance Minister has not specifically laid out any modalities to improve bio-pharmaceutical research. OPPI hopes the five-year outlay of Rs 50,000 crores to strengthen the overall research ecosystem and to identify national-priority thrust areas would have a focused approach to improve bio-pharmaceutical research in the country.

‘A well-rounded holistic budget’ – Nikhil Chopra, CEO and Whole Time Director, JB Chemicals & Pharmaceuticals

“A well-rounded holistic budget that embraces all sectors through various measures to boost economic activity. Against the backdrop of the pandemic and an economy facing an unprecedented contraction, the Finance Minister has met the challenge face-on with a budget that has a long term vision laid out in a strategic road map.  The emphasis on an ‘Aatmanirbhar Bharat’ with an increase in capital expenditure will boost investment in infrastructure and fuel economic growth.

The significant increase in allocation for health and well-being augurs well for the nation and can be a driving force and strong foundation for accelerating essential drugs and health-related consciousness to the last mile of Indians. The allocation of funds for COVID-19 vaccination will fast track the inoculation drive and it is worth lauding the Government’s commitment to provide further funds if deemed necessary.

The budget addresses the gaps in rural and urban healthcare that the pandemic exposed with the ‘PM Atmanirbhar Swasth Bharat Yojana’ in addition to the National Health Mission. Along with the emphasis on nutrition, clean water, and clean environment, this will bolster health infrastructure and reach across India. The pharma industry is ready to contribute towards fortifying the health of the nation that is the cornerstone of development. JBCPL stands by the nation!

‘We are encouraged with Government’s renewed focus on preventive and curative health’– Rehan A Khan, Managing Director- India Region, MSD

“We welcome the much-deserved attention on India’s healthcare sector in the Union Budget 2021, and  are glad to hear the increase in the total budget outlay for healthcare in this year. We are encouraged with the Government’s renewed focus on preventive and curative health as well as the overall wellness and well-being of our citizens .The introduction of the Aatmanirbhar Health Yojana in addition to the National health Mission,  along with other  announcements in the healthcare and pharma sector- such as setting up health and wellness centres, integrated public health labs in each district, – are aimed at widening access to health and wellness while driving focus on preventive health. These patient centered initiatives will play a pivotal role in the success of the National Health Mission.

Healthcare in India is at the cusp of transformation. The advancements in biotechnology, smart medicines, virtual and augmented reality, AI & IoT in healthcare are likely to gain momentum. This calls for a patient-focused healthcare ecosystem wherein community health, mental health and other such critical areas are properly represented.  The Government’s focus on self-reliance, especially with the attention on scaling production capabilities of vaccines and other medicines,  demonstrates its commitment to build a healthy India. While 2020 has accelerated the foundation for a digital transformation and innovation of the healthcare system, 2021 will support in further widening access and increasing digital inclusion in the remotest corners of the country.

Having said this, there is a need to further bolster the research and innovation ecosystem in the country in order to ensure that Indian patients receive new treatments and cures. An increased collaboration between stakeholders from industry, academia, governments, non-governmental organisations (NGOs), regulators and patients’ organisations is essential to promote a robust research framework which recognises and rewards innovation.”

‘It is a far-reaching budget announcement’ – Dr Krishna Ella, Chairman and Managing Director, Bharat Biotech

“It’s a great step ahead, and far-reaching budget announcement, providing ₹35,000 crore for COVID-19 vaccination in 2021-22. The Finance Minister commitment providing more funds in order to contain the Coronavirus pandemic spread in the country and provide an effective, smooth path for the vaccination scheme will help contain, and lead our nation towards accomplishing a covid-19 disease free Bharat.

The lay out plan of a ₹64,180 crore spending plan for healthcare over the next six years to be spent on primary, secondary and tertiary healthcare, in addition to the National Health Mission is also a welcome move, which will strengthen public health services as 17,000 rural and 11,000 urban health and wellness centres and integrated public health labs to be set up in each district. The government focus, on three areas –  preventive health, curative health and well-being, is also very reassuring.

Suchitra Ella, Joint Managing Director, Bharat Biotech

The new health infra schemes with significantly higher outlay of Rs 35,000 crore for Bharat’s mega COVID-19 vaccination drive is a huge fiscal medicine to contain the pandemic, reduce disease burden for the population, and the economy. A record total outlay of Rs 2,23,846 crore for health and wellbeing aimed to boost the health and well-being of the nation, is also a well-thought announcement in this budget, with focus on preventive, and curative health. It’s encouraging to note the creation of 9 Bio Safety Lab (BSL) in the Budget, that will boost research and scientific discoveries.

‘PM Atmanirbhar Swasth Bharat Yojna will boost healthcare infrastructure across primary, secondary and tertiary care’– Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance

The FY22 Budget is in line to support recovery of Indian economy while keeping the overall policy stability and fiscal discipline in perspective. The COVID 19 pandemic is an unprecedented time and has brought importance to healthcare in India. The focus on healthcare infrastructure in FY22 Budget is a positive step towards growth with a 137 per cent increase in allocation to the sector at Rs 2,23,846 crore. The allocation of Rs 64k Cr (over 6 years) on the PM Atmanirbhar Swasth Bharat Yojna will help boost the healthcare infrastructure across primary, secondary and tertiary care and the Vaccination programme is well-funded with over Rs 35k, it will help the country address the pandemic. All these initiatives are pointers to increased investment in healthcare infrastructure and will strengthen the sector going forward.

‘Union Budget 2021 is positive for Healthcare Industry’- S V Veerramani, Past National President – IDMA & Chairman and Managing Director, Fourrts India Laboratories

The announcement of Rs 64000 Cr for Atmanirbhar Health scheme is a welcome.  As per the Finance Minister, the healthcare infrastructure fund will also be increased from Rs 94,000 crores to Rs 2,23,846 crores.  Besides this, the already announced PLI scheme by the Government together with the proposed funding for COVID-19  vaccine and Pneumococcal vaccine augurs well for the healthcare industry in general.

Our expectations of increased weighted deduction on R&D upto 200 percent is absent in the announcement.

‘A big gift to healthcare sector‘-  B R Sikri, Vice President, BDMA and Chairman FOPE

We welcome step of the Government for presenting Budget through Digital route i.e. paperless budget. Finance Minister presented her budget speech in six pillars and we are grateful to her as health sector was taken as the First pillar.

Scientific efforts to produce two domestic vaccines for COVID not only for India rather than to supply to 100 countries are remarkable achievements. Rs 35000 crores allocated for vaccination of COVID is a welcome step by the Government of India. Due to serious health sector efforts during COVID, minimum deaths have taken place in India when compared with other countries seeing size of the population. Seriousness on the part of the Government towards the health sector itself proves because the government has increased the health budget from ₹94 thousand crores to 2.23 Lakh Crores. As an Industry, we appreciate this great initiative taken by the Finance Minister in the Union Budget.

Particularly, from the pharmaceutical industry’s point of view, we were hoping that the government will come forward to give some special relief for R&D and rationality of import duty was also expected. Similarly if the government has waived off some taxes on the input material, it would have given not only relief to the pharma industry rather to the consumers too because the medicines would have become more affordable for a common man.

‘This is one of the most challenging budget’- Vivek Padgaonkar, Independent Healthcare Consultant Former-Director OPPI ( Project and Policy),  Former GSK (Sales and Marketing)

Global  economy is in a very difficult phase in the last fifty years and India can be no exception to this so perhaps this is one of the most challenging budget for our Finance minister Nirmala Sitharaman.

At the back drop of shrinkage of the economy by 24 per cent in the first quarter of 2020, due to global pandemic, the Union Budget proposal 2021-22 rests on six different pillars. The inclusion of  Health and wellbeing, innovation and R&D, and the budget allocation increased by 137 per cent over the previous year, will have a significant contribution for the Indian life science sector.

The ‘PM Atmanirbhar Swasth Bharat Yojana‘ which will be launched with a total outlay of Rs 64,180 crore over a period of next six years, with a focus on developing capacities of healthcare systems, develop institutions for detection and cure of new and emerging diseases will boost Indian pharma industry.

‘This year’s budget is pragmatic, positive and committed to the healthcare sector’–  Harshit Jain MD , CEO and Founder, Doceree

This year’s budget by the Finance Minister is pragmatic, positive and committed to the healthcare sector which needed a deliberate boost post unprecedented virus outbreak last year. The announcement of centrally funded scheme – Aatmanirbhar Health Yojana – with an outlay of Rs 64,180 crore over six years in addition to National Health Mission is a welcome step towards strengthening primary, secondary and tertiary healthcare in the country.

Setting up of 15 Health Emergency Centres shows the government’s intent to be future-ready to address any healthcare crises. It is commendable that the government has put healthcare on the forefront, putting focus on curative and preventive health and wellbeing. The allocation this year is likely to be around Rs 2,23,846 crore which is a whopping over 130 per cent rise from the budget last year. The proposals would make quality healthcare accessible and affordable, besides standardizing healthcare infrastructure across the country.

GoI is placing importance on the sector spurred by the COVID pandemic‘ – Rohitashwa Prasad, Partner, J Sagar Associates

“For FY 21 GoI had budgeted Rs. 69,000 crore for healthcare, which was 1.6 per cent of GDP. The budgeted amount for FY 22 shows a significant increase. If this growth were to be extrapolated, the GoI should achieve the target of healthcare spend of 2.5 – 3 per cent of GDP (as envisaged in the National Health Policy 2017) well before its target date. This is quite promising and clearly illustrates the importance that the GoI is placing on the sector spurred by the COVID pandemic.

What is also very commendable is that the GoI has allocated Rs. 35,000 crore for the COVIDd vaccine as a separate line time. This shows that the GoI has avoided the pitfall of focusing all its resources on tackling communicable diseases at the cost of building healthcare systems generally because of the COVID pandemic, which notwithstanding its materially adverse impact on the health and economy, is an extraordinary event. The GoI has thus avoided the saliency bias which the Economic Survey had warned against.

Budget 2021 is realistic, positive, and holistic’ – Akshay Daftary, Director, SIRO Clinpharm

“In this year’s budget, the Finance Minister considered the health and well-being sector as the first pillar, which is very encouraging for healthcare and nutraceuticals sector professionals. The announcements made by the FM especially for the healthcare sector in terms of promised reforms and anticipated conducive measures to boost domestic manufacturing of the medical devices along with the emphasis on preventive care, PPP in Ayushman Bharat, expansion of Jan Aushadhi Kendra in all districts to provide medicines at affordable rates, etc. are very promising and will provide impetus to the growth of the sector in the long run. The allotment of Rs 3000 crore funds under skill development is a positive move by the government in terms of recruiting people since the EMS (Emergency Medical Services) industry demands skilled individuals in paramedics as they are the ones driving the sector and hence play a vital role in saving lives.

The allocation of Rs 35,000 crore for COVID-19 vaccines was much needed as it is the need of the hour. Additionally, the allocation of Rs 69,000 crore to healthcare is again something that is commendable and a heartening measure announced by the FM for the development of the healthcare sector. Overall, Budget 2021 is realistic, positive, and holistic at the same time, centered around the common man and his needs.”

Launch of PM Aatmanirbhar Swasth Bharat Yojna includes multiple priorities‘ – Dr Hari Natarajan Founder and Dr Karishma Shah, Director, Pronto Consult

The first budget of the new decade saw the necessary boost required for Healthcare and India as a whole taking care of most of the stakeholders is the budget for New India.

The health sector has got a 2.24 L crore allocation and the increase in spending is as per the expectations of the healthcare sector, which as per the Finance Minister is a 137 per cent increase over last year.

The infusion of capital into multiple projects across transportation, railways, public service would help to give the necessary boost for employment generation and  would facilitate the increase in money flow into the economy and would give a boost to the economy.

GOI has also provided Rs 35400 crore for COVID vaccination in 21-22 and also the pneumococcal vaccine, Made in India product would be rolled across India from just five states now and also from the currently available two vaccines, there would be two more vaccines which can be approved soon.

Healthcare got the much needed boost by strengthening the expenditure increase and also by expanding Virology institutes. The launch of PM Aatmanirbhar Swasth Bharat Yojna includes multiple priorities from supporting the Health and Wellness Centres, setting up critical care hospital blocks, strengthening of primary, secondary and tertiary healthcare centres.

As from the word of the Finance Minister “Three areas -preventive health, curative health and well-being to be strengthened during the current year fits well into the budget for this space.

‘An increase by 137 per cent in the budget outlays shows that the Government is serious‘-Sushant Raorane, Director and Co-founder Adroit Biomed

An increase by 137 per cent in the budget outlays shows that the Government is serious. Just the symbolic placement of the sector in the first section of the budget speech shows the government’s commitment to enhance the health infrastructure for the wellness of all citizens. There is going to be a special thrust in natural medicines and therapy and this will give a boost to the nutraceutical segment. We welcome this budget for sure and aim to work hard for a self-confident and self-reliant India.

‘Aatmanirbhar Swastha Bharat Yojana have hit the bullseye’ – Sidharrth Shankar, Partner, J Sagar Associates

The experiences of COVID-19 have delineated the importance for emerging economies to invest in healthcare infrastructure at all levels – primary, secondary and tertiary. The budgetary announcements of the outlay of Rs 64,180 crore under the Aatmanirbhar Swastha Bharat Yojana have hit the bulls eye in this area. The approach followed by the Indian government is a marked departure from existing practices of reduction of out-of-pocket expenditure of the citizens.

‘First time, the government has explicitly mentioned the emphasis on overall wellbeing’- Sanjaya Mariwala, Executive Chairman and Managing Director, OmniActive Health Technologies and Founder President of the Association of Herbal and Nutraceuticals Manufacturers of India (AHNM)

“Focus on both preventive and curative healthcare in the Nutrition Programme 2.0 is a great boost for the nutraceutical industry. For the first time, the government has explicitly mentioned the emphasis on overall wellbeing. Mission Poshan 2.0, which will be focused on strengthening nutritional content, delivery, and the outcome is a great initiative and a big boost for the nutraceutical industry.

Further extension of the PLI scheme and emphasis on manufacturing in India is also encouraging. We will look forward to further specifics especially the PLI scheme for the nutraceutical sector.

‘The budget proposals reflect an embolden India‘- Chintan Gandhi, Managing Director – Millennium Herbal Care

The budget proposals reflect an embolden India, possibly buoyed by the government’s overall handling of the pandemic relative to other countries. The ability to comfortably budget the deficit at 6.8 per cent is the need of the hour. In reference to the healthcare sector, just the symbolic placement of the sector in the first section of the budget speech shows the government’s commitment to enhance the health infrastructure for the wellness of all citizens. This shall be good for the Ayurvedic sector too, especially with the recent appreciation from consumers.

The government did not meet the industry’s expectations of  taxation’- Parvathavardhini Natarajan, Associate Director, Ratings, Brickwork Ratings

On the taxation side, the government did not meet the expectations of the industry which looked forward to tax benefits on R&D investments in pharma and lower GST for life-saving drugs.

‘No mention of specific support and incentives for R&D and innovation‘-  Charu Sehgal, Partner and Leader, Lifesciences and Healthcare, Deloitte India

”The budget 2021 has provided the much expected increase in public expenditure on Healthcare.  The FM has announced an outlay of Rs 64180 crores over six years though, on Atma Nirbhar  Swasthya Bharat scheme in addition to the National  Health Mission budget.

There appears to be an integrated approach whereby both the short term and immediate needs as well as the longer term measures have been proposed. While the provision of 35000 crores for COVID 19 vaccine and focus on disease control and surveillance will help cope with the immediate needs brought forth by the pandemic, the setting up of National Institutes for virology and Integrated Health Labs, an updated Health Information portal will all prepare us for future such eventualities.

The pandemic had brought to the fore the stark shortage in infrastructure and medical and paramedical medical resources. The budget announced setting up and upgradation of primary, secondary and tertiary health units across districts and blocks as well as a focus on allied healthcare  professionals and that is a welcome step.

What seems to be missing was the support and boost that was expected to encourage private investment in healthcare infrastructure as well in manufacture of medical devices. There was also no mention of specific support and incentives for R&D and innovation for Pharma and Medical technology.

It was  the private sector that really rose to the challenge during the last year whether it was on innovation or manufacture of drugs, devices and vaccines or on testing and treatment and it was expected that it will be provided a boost.”

The budget is definitely aimed to make India a better place to do business’-Sumit Kumar, Vice President – NETAP, TeamLease

The budget is definitely aimed to make India a better place to do business, to work for a common man and to massify quality education. The increased focus and impetus on infrastructure, manufacturing, financial sector and health sector will create employment opportunities which makes the case stronger for the skilling ecosystem to ensure productivity at execution. Skilling will step up in the automotive sector at both ground level for production and also at the macro level to boost R&D and prepare the workforce for Industrial Revolution 4.0.

The outlook to amend the Apprenticeship Act will lead to attractive incentives for small and medium enterprises, especially in the auto ancillary segment and will further boost skilling through apprenticeships along with the OEMs which further creates employment opportunities.

Realignment of National Apprenticeship Training Scheme (NATS) and the allocation of Rs 3000 crores will motivate organisations for providing apprenticeship training. Commencing degree and diploma  apprenticeships in the non-technical stream will improve the employability factor for the youth and prepare a productive workforce in the country.

Additionally, the setting up of The Higher Education Commission will help us understand the ground realities of execution of policies like that of the National Education Policy among other education reforms, and will help in addressing challenges in execution as well. However, the budget’s silence on the regulatory front especially for Skills Universities and relaxation of laws in online education licensing is a bit disappointing as these aspects are very crucial for improving affordability, accessibility and scalability of quality education in India.

‘Overall it is an ambitious budget’ – Suresh Pattathil, MD, Allergan India

Overall, this is an ambitious, growth-oriented budget and the FM has tried to ensure that the economy receives the impetus it needs to go back to a respectable GDP growth level. We are glad that in line with the vision of  ‘Atmanirbhar Bharat‘, the FY22 budget identifies six pillars on which to build a future ready India. We are particularly glad that health and wellbeing and innovation and R&D are included here.

The significant increase in budgetary support for the health sector is most welcome. The additional outlay of Rs 64,180 crore over the next six years is to be spent to improve and fill gaps in the primary, secondary, and tertiary health segments.  The hope is that this will make a measurable difference to the access and delivery of high quality healthcare for all.

However, India’s health challenges are huge and require a high degree of collaboration between the public and private health sectors to improve healthcare access, increase insurance cover, bring down out of pocket expenses and ensure a good supply of new innovative drugs. The Indian pharmaceutical industry needs strong incentive to invest in making India a pharma research hub for the country and the world.

‘Higher allocation to the MSME industry’ – Mahendra Patel, Managing Director, Lincoln Pharmaceuticals

Budget is in line to help recovery of Indian economy post COVID while keeping taxation neutral, policy stability and fiscal discipline in perspective. Higher allocation to the MSME industry and 137 per cent rise in allocation to the health sector will further boost the health infrastructure in the country. Overall it is a good budget with higher allocation to infrastructure, agriculture which are need of the hour.

The allocation of Rs 35,000 crores for COVID-19 vaccine development and immunisation was a much-needed’- Rishad Dadachanji, Director, KAISHA Group of Companies

The announcement by Indian Finance Minister, Nirmala Sitharaman to commit a 137 per cent budget increase for healthcare and nearly 200 per cent boost for developing the pharma sector instils a high level of optimism in the industry. The allocation of Rs 35,000 crores for COVID-19 vaccine development and immunisation was a much-needed impetus for Atmanirbhar Bharat, as it continues to maintain its global lead in tackling  the pandemic.

(With inputs from Viveka Roychowdhury and Lakshmipriya Nair)

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