Zero tax on life-saving cancer drugs, higher tobacco levies can cut treatment costs: AIIMS doctors

The analysis was based on the recent GST recommendations of reducing taxes on 33 life-saving drugs, including cancer drugs, from 12 per cent and 5 per cent to zero. Earlier this week, Union Finance Minister Nirmala Sitharaman announced slashing the basic custom duty on 17 cancer drugs in her Budget presentation. Last year, Sitharaman said that 37 medicines and 13 patient assistance programmes would be exempt from customs duty. And, during the interim budget as well, the Union finance minister had reduced the customs duty on three advanced anti-cancer therapies.

“Many of the new therapies have now shown survival benefit for certain cancers, so it makes sense to ensure more accessibility. While cutting the taxes may reduce the price of these expensive drugs only by a small margin in a single cycle, the savings can add up to a lot over a period of two to three years that some of these drugs have to be used,” said Dr Abhishek Shankar, one of the authors and an oncologist at AIIMS.

He added that there is a need for more academia-industry collaboration for developing novel therapies so that patents can be held by India, especially academic institutions.

“The only way to bring down the costs of such novel, targeted therapies is to develop them in India. There has to be more product development at academic institutes. The drug prices can be controlled if the intellectual property rights are held by India, especially by an academic institution. At present, most of the industry-academia collaboration is happening on conducting clinical trials, usually for therapies developed elsewhere. Even when our companies manufacture biosimilars — generic versions of biologic therapies like immunotherapies — they have to wait for years for the patent to expire,” he said.

The article also states that a study conducted in four states, on the impact of 10 per cent increase in prices of cigarettes, found that it could prevent 6.6 lakh deaths, lead to a gain of 11.9 million life years, and save USD 1.96 trillion in averted treatment cost, saving USD 762.5 million under the Ayushman Bharat health insurance scheme. At 50 per cent hike in tobacco tax, 1.8 million deaths can be averted and R 11.9 trillion can be saved over a ten-year period, the article said. “The new taxation slab … provides increased opportunity to redirect the generated revenue for funding cancer care in the country,” it added.

Dr Shankar said: “The taxes collected on tobacco, which is linked to 13 (types of) cancer, and alcohol, which is linked to seven (types of cancer), can be used to address the gaps in measures for prevention, screening, diagnosis, and treatment of non-communicable diseases, especially cancers.”