#Budget2022: Healthcare stakeholders expect a bigger pie this year

New Delhi: In light of the continuing pandemic, health at present has become the biggest priority for people and nations alike. In India, the pandemic exposed several gaps in the existing healthcare infrastructure. When it comes to policy level, the Indian government issued notification about retail sale of drugs at door step, issued telemedicine guidelines, launched production linked incentive (PLI) schemes for domestic manufacturing of critical Drug Intermediaries (DIs), Key Starting Materials (KSMs), Active Pharmaceutical Ingredients (APIs), and Medical Devices. To increase competitiveness and improve availability and affordability of medical devices, a scheme for creation of four Medical Device Parks was also announced.

The government also announced the launch of the National Digital Health Mission (NDHM). On Jan 16, 2021, the Prime Minister of India inaugurated vaccine drive for two domestically produced vaccines. Despite all these efforts, the healthcare industry is still in need of better support for sustained growth.

Here are some of the expectations of the healthcare industry from Union Budget 2022-23.

“As we enter the third year of the pandemic, our expectations for Budget 2022 are for increased spending on healthcare. India’s total healthcare expenditure is significantly lower than that of other countries. The pandemic has highlighted the critical need for high-quality public hospitals. More public-private partnerships, as well as additional investments, are required to strengthen indigenous manufacturing of medical devices, personal protective equipment (PPE), and raw materials for drugs. Hence, the government must allocate more budget for the healthcare industry. Furthermore, higher tax breaks for the private sector to modernize medical facilities will go a long way toward ensuring better healthcare, more investments, and thus more jobs,” says Sugandh Ahluwalia Chief of Strategy, Indian Spinal Injuries Centre.

“Given the repeated occurrences of infectious diseases of epidemic scale in recent years, the government should also invest sufficiently into genetic and genomic research, epidemiology and vaccine research besides increasing allocation for broader healthcare R&D. Of course, the diagnostics and preventive health device segment must be given as much policy and financial support as possible. Further, the budget could also incentivize the consumables as well as medical device accessory segments which hold huge promise for the domestic sector. At the same time, adequate allocation must be made for training of personnel required for the deployment and usage of critical care equipment such as ventilators and other similar lifesaving devices,” says Ashok Patel, CEO and Founder Max Ventilator (India’s leading ventilator manufacturer).

“While the draft R&D policy focuses on creating an ecosystem for research and innovation, certain tax incentives for the investment in ‘R&D focused funds’, set up for R&D based activities, could be introduced. Presently, GST on drugs is taxed under four categories – nil, 5%, 12% and 18%. While a few life-saving drugs are taxed at nil rates, some are taxed at 5 per cent and the majority fall under the 12 per cent GST slab. Extensions of a tax deduction on product development and R&D are some of the other demands of the pharmaceutical sector. The industry also seeks a 150% deduction in tax on in-house R&D,” says Nikkhil K Masurkar, Executive Director, ENTOD Pharmaceuticals.

“Increased allocation of budget for promotion of telemedicine, home-based healthcare and national digital health mission implementation will help in building a strong healthcare ecosystem in the country. Telemedicine has potential to improve access to healthcare in remote and rural areas. Home-based healthcare will reduce burden on limited healthcare facilities. Digital Health along with various innovations should be encouraged for India’s future growth in population health. The government should also support private players and startups in this segment to increase the current coverage of the locations including tier-2 and tier-3 cities to provide the advanced healthcare facilities in these areas,” says Vikram Thaploo, CEO of Apollo Telehealth.

“Public Private Partnership models as have been proposed earlier by National Health Authority, are promising initiatives of mutual efforts, whereby models for partnership with private diagnostic companies were proposed for bettering the infrastructure, services and quality of testing in Tier II and Tier III Indian Cities.  We advocate the principle of introducing high end molecular/genetic testing at a micro level in Indian Cities for reducing the difficulties in accessing quality testing and for strengthening regional medical infrastructure at a micro level. We further are staunch believers of developing indigenous testing technologies, medical devices and related infrastructure to promote an environment of Research and Development in this field. Accordingly, with the help of the Government’s grants, we can collectively formulate and implement cheaper alternatives to expensive genetic testing,” says Dr. Gauri Agarwal, Found & Director, Genestrings Diagnostic and Seeds of Innocence.

“The sudden emergence of Covid-19 prompted the Indian government to nearly double its healthcare budget year over year. As a result, the most prominent area of focus in Budget 2022 is expected to be healthcare. We anticipate that the government of India will increase its healthcare spending in this budget. The last Budget announced a 137% increase in healthcare spending to address some of the gaps. Healthcare accounted for about 1.8 percent of GDP in 2021. We should aim to raise it to at least 2.5 percent of GDP this year. Despite the focus on the Covid-19 pandemic at the moment, it is critical to increase the proportion of spending on preventive healthcare and wellness. Ayushman Bharat is undeniably a positive step toward achieving the goal of universal healthcare; however, more funding is required to ensure its long-term success,” says Dr Aashish Chaudhry, Managing Director, Aakash Healthcare.

Final Words

Apart from increasing the health expenditure above 2.5% of GDP, industry experts also expecting some reforms like incentivizing private investment in healthcare infrastructure, expanding health insurance coverage, investing in increasing healthcare manpower and skilling and rationalizing GST on healthcare products and services in the upcoming budget of 2022-23.