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The Indian healthcare sector and budget 2003-04


  • Recognised  as a knowledge-based industry with great export potential

  • Hospitals : Investments into healthcare sector should now go up substantially with the proposed extension of tax benefits to financial institutions, which provide capital to private hospitals with 100 beds or more.

  • Medical Equipments : Reduction in customs duty on specified life saving equipments from 25 percent to 5 percent and their exemption from CVD can  bring down the cost of investing in technology in hospitals and other healthcare institutions. The revised rate of depreciation at 40 percent from 25 percent – a  significant sop for healthcare sector.

  • Pharmaceutical Industry : The budget has given a definite boost to the research and development activity with a string of incentives

  • Clinical Trials : The government knows well that conducting clinical and pre-clinical trials is going to be a big business in India in the years to come. A good number of MNCs, CROs and some Indian companies are already into clinical trials in a big way. New incentives should attract many more R&D ventures into the country. Encouraging pharma industry to build a strong research and development base is extremely important to take it to the next phase of growth.

  • Health Insurance : Provisions  on health insurance will make a difference to the quality of life, thereby promoting demand for the sector

  • Bulk drugs and other chemicals  : But the decision to reduce the peak customs duty on bulk drugs and other chemicals to 25 percent from 30 percent is not in the overall interest of the domestic industry. Import requirement of bulk drugs has been on the increase for some years now with discontinuation of a large number of essential drugs by the domestic companies. A 5 percent cut in customs duty, at this stage, will make imports more attractive and can discourage existing bulk drug producers. Growing dependence on other countries for bulk actives could destabilize India's pharma industry in the long run.

( Abstracts from the full text of Indian Finance Minister Jaswant Singh's address to Parliament while presenting the federal budget for fiscal 2003-04 )

(Ref: The Economic Times, March 02, 2003)

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ASTHMA INHALERS: Nicholas in talks to market Ivax asthma inhalers

INDIAN pharma major Nicholas Piramal (NPIL) is in talks with the $1.2bn American drugmaker Ivax, to market the latter’s asthma inhalers in India.  The talks have been going on for some months now, but no agreement has been reached, a company source said.

Ivax’s worldwide respiratory business did sales of approximately $225m (Rs 1,080 crore) in ’01 and is growing fast.  NPIL already has a relationship with Ivax since it has worked with its UK subsidiary on joint drug development.

A market dominated by Cipla, the country’s second largest drugmaker, Cipla has captured 75% of the Rs 225 crore a year inhalation therapy market with aggressive pricing and functional inhalers.

Galaxo-Smithkline, the country’s largest drugmaker by market share sells in the premium end of the market and enjoys a strong franchise with specialists, especially in metros.

Other players include German Remedies, Sun Pharma, Kopran and AstraZeneca.

The Indian anti-asthma market is valued at Rs 420 crore, growing at about 17%.  According to the Asthma Foundation of India about 10% of the Indian population suffers from asthma.

[Ref: Economic Times, Jan. 07, 2003]

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ANGIOPLASTY : Transradial approach an alternative to angioplasty, Yashoda conducts 200 procedures 

Doctors at Hyderabad’s Yashoda Hospitals have successfully been able to approach the heart through the artery in the hand instead of the thigh.  Usually to map or repair the heart, or deploy a stent, a catheter is inserted in the groin region and slowly pushed up to the heart under the guidance of image intensifiers.  The new route through the radial artery in the hand, known in medical parlance as transradial approach, presents and alternative to reduce some complications documented in traditional approach (femoral), according to Dr Raghu, who headed the surgical team in the new method.

Yashoda is the only hospital in Hyderabad doing this new technique and has performed almost 180-200 operations.  It costs between Rs 5,000-10,000 depending on the nature of the case, Dr Raghu told Chronicle Pharmabiz.

The new approach allows immediate mobilisation of the patient, thus improving the patient comfort and reducing the duration of hospitalisation.  As the radial artery is a small artery of 2-2.5 mm diameter, it entails the usage of finer equipment and technique so that the patient does not experience much pain.  In addition, due to the usage of finer equipment and also as the radial artery is supported by a strong bony bed, the vascular complications are almost negligible.  Both angiography and angioplasty with stenting procedures could be done safely by this approach, according to Dr Raghu.

Compared to the femoral approach, transradial technique needs specialised training and steep learning curve to familiarize with this technique.  Coronary angiography and angioplasty are traditionally performed through the thigh for accessing the heart vessels.  Patients who undergo the femoral procedure experience severe back pain and at times urinary retention, secondary to prolonged immobilisatino.  In addition, due to the long duration of immobilisation and consequent back pain, patients can have a fall in blood pressure.

Another important problem with the femoral approach is the vascular and bleeding complications.  These complications occur in 2-4 per cent of patients and may require blood transfusions or surgery.  They thus contribute to patient morbidity, prolongation of hospitalization and increasing the overall procedure cost.  Such complications are more likely to occur if the angioplasty is performed under treatment with certain drugs, especially in the setting of heart attack or unstable angina.

Dr Raghu is a specialist in Transradial Angiography, Angioplasty and drug coated stents.  He had been trained under Dr Thierry Lefevre at the Institute of Cardiovascualr, Paris.  Dr Lefevre, was in Hyderabad recently to supervise the operation.

[Ref: Pharmabiz, Feb. 2003 Vol - 3/11]

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Diagnostic kits freed from duty

THE government has decided to free exporters of non-critical diagnostic kits to the country from payment of import registration fee.  The exemption would be available to hundreds of products including kits fro diagnosing TB, diabetes, tumour markers as well as kits for organ function tests for liver, kidney etc.  The exemption would also cover pregnancy detection kits and various molecular diagnostic materials and bio-markers.

As per the import registration norms announced last year by the health ministry-to be effective from March 31 ’03, any entity wanting to export a pharmaceutical product to India would have to pay a fee of $1,500 per entity and $1,000 per product as registration fee.  “We have decided to exempt non-critical diagnostic kits from the registration fee,” an official from the Directorate General of health Services told ET.

[Ref: The Economic Times, Jan. 01, 2003]

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PACKAGING NORMS: Finmin to review packaging charge norms

THE ministry of finance will soon commence an exercise for review of the conversion costs and packaging charges norms for the drug industry on behalf of the National Pharmaceutical Pricing Authority.

The mandate to review the CC&PC norms, which would lead to introduction of new methodology for estimating the cost of pharmaceutical conversion, has been given to the cost accounting wing of MoF, government sources said.

CC and PC are the two major components of drug manufacturing cost that weigh most on the prices which the government fixes for controlled bulk drugs and formulations.

[Ref: The Economic Times, Jan. 22, 2003]



In the News...

ASTHMA INHALERS: Nicholas in talks to market Ivax asthma inhalers

ANGIOPLASTY : Transradial approach an alternative to angioplasty, Yashoda conducts 200 procedures 

Diagnostic kits freed from duty

PACKAGING NORMS: Finmin to review packaging charge norms

The Indian healthcare sector and budget 2003-04

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