Representative image of a drug store.
Credit: iStock Photo
Hyderabad: India's pharmaceutical companies are hoping for tax incentives and financial assistance for research on innovative drugs as Prime Minister Narendra Modi's government readies a federal finance budget likely to be presented in July.
The upcoming budget would be Modi's first major policy announcement in his third term as prime minister.
Indian drug manufacturers must focus on developing complex drugs beyond the usual generic variety if the country is to continue being renown for being the 'pharmacy of the world' for its affordable medicines, experts say.
"If the Indian government can give some income tax exemptions for 5-10 years for any new molecule developed in India...that can pull innovation to grassroot level...companies will start investing in innovation," Bharat Biotech's Chairman Krishna Ella told Reuters on the sidelines of an event in Hyderabad on Friday.
Bharat Biotech developed India's first indigenous Covid-19 vaccine, Covaxin.
India, whose pharmaceutical market is expected to be valued at $130 billion by the end of the decade, is the world's third largest manufacturer of drugs by volume after the United States and China and is a hub of generic drug manufacturers.
Generic drugs are cheaper versions of brand-name drugs.
In March, research firm Bernstein said that India needs to create a domestic market where innovative drugs can be profitable at the right price.
"Spending millions on clinical trials with no pricing power is not a business they (pharma companies) want to be in," Bernstein said in an open letter to the prime minister.
The firm also said insurance coverage for novel drugs and harmonising regulatory standards for manufacturing and clinical trials will be required for fostering innovation.
India has offered incentives since 2020 to spur the manufacturing of a broad range of products from drones to drugs in the country. But manufacturers of novel drugs are not eligible for the incentives yet.
"I think government is evaluating on how their existing scheme is working...but industry is expecting a policy from the government to boost research and development in companies," HIV drugs maker Hetero Drugs' Chairman Partha Saradhi Reddy told Reuters.
India's export sales, which dominate the US generics market, is expected to double to $55 billion by 2030, according to a government-backed trade body Pharmaceuticals Export Promotion Council of India (Pharmexcil).
"And if you want to have this flag going high in the entire globe and again...I think probably we have to look a little bit out of the box," Raja Bhanu, director general of Pharmexcil, said.