Union Finance Minister, Smt. Nirmala Sitharaman announced the exemption of three additional cancer medicines—Trastuzumab Deruxtecan, Osimertinib, and Durvalumab—from customs duty as she presented the Union Budget 2024-25 in Parliament today. The request was forwarded by the Ministry of Health and Family Welfare (MoHFW) to the Ministry of Finance in view of the 27 lakh cancer patients in the country. To improve the affordability of these drugs, Ministry of Finance has exempted them from the customs duty.

The three cancer drugs namely Trastuzumab Deruxtecan, Osimertinib and Durvalumab are used for different tumor types viz.

1. Trastuzumab Deruxtecan - Breast Cancer
2. Osimertinib - Lung Cancer; and
3. Durvalumab - Lung Cancer and Biliary Tract Cancer

The Union Finance Minister also revised the custom duty rates on X-ray tubes and flat panel detectors. These revised rates are expected to positively impact the X-ray machine industry by enhancing component availability at lower costs. This change is anticipated to boost the domestic medical device sector, contribute to component availability at lower costs and reduced healthcare costs, making advanced medical imaging more accessible and affordable.

The budget expenditure for FY 2024-25 under the National Health Mission (NHM) has also been increased by approx. Rs 4000 Cr from Rs 31,550 Cr to Rs 36000 Cr. NHM is Central Sponsored Scheme which primarily caters to the Primary and Secondary Healthcare service delivery in the Nation. The focus of the Government is to invest in the Primary and Secondary Public Healthcare facilities for implementing the preventive and curative aspects of Health to reduce the Out of Pocket Expenditure of the public at large.

To drive productivity gains, business opportunities, and innovation by the private sector, the budget proposes the development of Digital Public Infrastructure (DPI) applications at a population scale. These initiatives aim to enhance various sectors, including credit e-commerce, education, health, law and justice, logistics, MSME services, delivery, and urban governance.

Furthermore, in the Union Budget 2024-25, a proposal has also been made to develop 100 weekly “haats” or street food hubs in select cities. This initiative aims to invigorate local economies and enhance the street food experience, further contributing to urban development and community engagement.

Background:

Cancer Drugs:

Trastuzumab Injection 440mg/50ml is a scheduled drug under NLEM 2022 and NPPA has fixed the ceiling price of the same. Current applicable ceiling price is Rs. 54725.21 per vial, vide S.O. 1547 (E) dated 26.03.2024. However, its other strength variants are not under the schedules list. Trastuzumab comes in different strengths and dosages with a combined annual turnover of more than Rs. 276 crores.

The other two medicines i.e., Osimertinib and Durvalumab are non-scheduled medicines under DPCO, 2013. Hence, NPPA monitors the maximum retail price (MRP) of the non-scheduled formulation to ensure that the same does not increase by more than 10% of MRP during the preceding twelve months.  The Annual turnover of Durvalumab for the year 2023-24 was Rs. 28.8 crore

Osimertinib is covered under the list of 42 anti-cancer drugs for which trade margin was regulated under Trade Margin Rationalisation vide S.O. 1041 (E) dated 27.02.2019.  As per the data available with NPPA, the annual turnover of Osimertinib for the year 2023-24 was Rs. 52.26 crore. 

Manufacturing of Medical X-Ray Medicines:

To promote domestic manufacturing of Medical X-Ray Machines and specified sub-assemblies /parts / sub-parts, a Phased Manufacturing Programme (PMP) was notified by DoP on 22 Jan 2021, whereby tariff changes at an increasing rate were proposed in a phased manner on the Medical X-Ray Machines and specified sub-assemblies / parts / sub-parts used in manufacturing of X-Ray machines.

The PMP was aimed at enabling the Medical X-Ray Machines and related sub-assembly / parts / sub-parts industry to plan their investment in the sector and increase domestic production, keeping in view the escalating duty structure on X-ray Machine and related sub-assembly/parts/ sub-parts. This was expected to increase domestic value addition and establish a robust Medical X-Ray Machines manufacturing eco-system in India.

However, the Industry represented before the department of Pharmaceuticals that manufacturing capacity for X-ray Tubes and Flat Panel Detectors is yet to develop in the country and requested for revision in the Phased Manufacturing Programme (PMP) schedule relating to these items. In this regard, after careful examination, it was found that it may
take at least two years before sufficient domestic capacity is established for X ray tubes and Flat Panel Detectors to meet the domestic requirement. Thereafter, the Department vide OM dated 24.5.2024 requested Department of Revenue for revised rates. Ministry of Finance vide notification No. 30/2024-Customs dated 23rd July, 2024 (S.No. 71) has revised the duty rates for said items as proposed by the Department.

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MV

HFW/Health Budget 2024-25/24^th July /1