Union budget: New horizon for the healthcare sector

Budget's proposal to frame new rules for regulating medical devices is reassuring, says Viral Gandhi

Last Updated : Feb 03 2017 | 11:17 AM IST

Budget, presented on February 1, 2017, has laid emphasis on extraordinary efforts for the common man in our country, with path-breaking income tax reforms by slashing IT slab from 10 percent to 5 percent and reducing the tax rate for companies with an annual turnover up to Rs 50 crores, to 25 percent, for strengthening the emerging MSME sectors.

IMF sees India to grow fastest in major economies across the globe and we are seen as engine of global growth. FII has increased from Rs 1.07 lakh crore to Rs 1.45 lakh crore, which makes India the sixth largest manufacturing country in the world.

As far as the healthcare segment is concerned, emphasis has been laid in developing the in-house human assets for the healthcare segment, whereby two new AIIMS hospitals will be set up in Jharkhand and Gujarat, along with creation of additional 25,000 medical post graduate seats under DNB (Diplomate National Board) courses in many of the hospitals across the country.

Government has also introduced Aadhar cards for senior citizens in order to record their health conditions that will be linked up with couple of upcoming LIC programs.

Furthermore, FM has outlined an action plan to eliminate kala-azar and filariasis diseases by 2017-18, leprosy by 2018, and measles by 2020 and tuberculosis by 2025, under the National Vector Borne Disease Control Programme (NVBDCP).

Government will be coming up with new set of rules, regarding medical devices that will be internationally harmonised and attract investments into this sector, ultimately reducing the cost of medical devices. Steps will also be taken for widening the availability of essential drugs across India and reducing the cost of life saving drugs.

Citing the example of coronary stents, government has already brought the same under price control and asked the National Pharmaceutical Pricing Authority to fix its ceiling price. On similar lines, the government will amend the Drugs and Cosmetics Rules to ensure availability of medicines at reasonable prices and to ensure use of generic medicines. The Medical Council had recently amended its guidelines to encourage doctors to prescribe generic names of medicines.

India is the largest provider of generic drugs globally, with the Indian generics accounting for 20 percent of global exports in terms of volume. India has already achieved an eminent global position in the pharmaceutical sector, but the same has not been replicated in the medical devices industry, even though 100 per cent FDI is allowed under the automatic route in the medical devices sector for encouraging manufacturing of equipment.

The decision to eliminate diseases like kala-azar and filariasis are praiseworthy. It is in the interest of the country’s onward journey to a better society that we need to come up with a workable and hands-on framework. But, translating these pronouncements into action calls for coordination of various agencies and ground-level execution. It is a long-term project. So, the question is: do we have enough healthcare infrastructure in place to achieve our goals? The eradication of such diseases will entail a lot of groundwork including the need to have enough healthcare workers, hospitals and primary healthcare centres, testing kits and medical devices, etc.

Viral Gandhi, CMD, Voxtur Bio Ltd

The ground reality is that India imports 80 percent of medical devices. This means that we have a long way to go before we could achieve self-sufficiency in this regard. Here, it is reassuring to see that the budget has come up with a proposal to frame new rules for regulating medical devices. The FM has said that these rules will be internationally harmonised, which will attract investment into this sector. This will reduce the cost of such devices and more employment will be generated domestically. International harmonisation of the medical device market will help Indian medical devices companies compete with global players as our products will be harmonised with European and American standards. And Indian products will definitely find new export markets.

So, while the start-up IVD companies will get the much-needed fillip, it will also contribute towards eradicating various diseases as envisioned in the budget. Yes, it is a double-edged sword. On the one hand it is a revolutionary step in the public healthcare system of the country, and, on the other, the industry will also get benefit concomitantly.
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Viral Gandhi is the chairman and managing director of Voxtur Bio Ltd