Cheaper cancer meds and more: How Union Budget 2024 is a shot in the arm to the health sector

Union Finance Minister Nirmala Sitharaman presented her seventh consecutive Union Budget on Tuesday, July 23.

The budget embraces a community-centric approach and focuses on “Garib” (Poor), “Mahilayen” (Women), “Yuva” (Youth), and  “Annadata” (Farmer).

The Union Budget’s focus on lowering the cost of medications, especially for cancer patients, is among the most important and positive developments for the healthcare industry.

Allocation for the healthcare sector

The Central government has allocated Rs 89,287 crore for developing, maintaining and improving India’s healthcare system, a slight increase from Rs 88,956 crore in FY24.

The government has also suggested exempting three additional cancer medications from basic customs duties, Finance Minister Sitharaman’s announced on Tuesday. This exemption is vital as cancer treatments are expensive and frequently out of reach for many people.

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Sitharaman proposed to cut customs duties on Trastuzumab Deruxtecan, Osimertinib and Durvalumab from 10 per cent to nil.

In 2023, 9.6 to 10 million fatalities worldwide were attributed to cancer, according to reports. India came in third place among countries with cancer cases, according to the Global Cancer Observatory (GLOBOCAN), behind the United States and China.

Additionally, Rs 2,143 crore has been set aside by the government for PLI in the pharmaceutical sector.

As part of the phased manufacturing program, Sitharaman also suggested modifying the basic customs duty on flat panel detectors and X-ray tubes used in medical X-ray equipment.

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These changes are part of the phased manufacturing plan and are intended to coincide with the expansion of domestic capacity.

Allotments in the Interim Budget

Earlier in February, the finance minister made several major assertions about the health sector in the Interim Union Budget for 2024–25.

The health sector received a budget allocation of Rs 90,171 crore for 2024–25, which was more than the Rs 79,221 crore allotted for 2023–24.

The interim budget placed a strong emphasis on improving healthcare infrastructure, using the hospital system already in place to develop additional medical colleges, and emphasising preventive care, as per CNBC-TV18.

To lower the prevalence of this preventable disease, a fresh initiative encouraging girls aged 9 to 14 to get vaccinated against cervical cancer was launched.

A comprehensive plan to integrate multiple mother and child care initiatives has been included in the interim budget.

The budget allocated for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana was increased from Rs 7,200 crore in 2023–2024 to Rs 7,500 crore in 2024–2025.

By optimising vaccine distribution and guaranteeing real-time data tracking, the Unorganised Worker Identification Number (U-WIN) platform was introduced to manage immunisation and support Mission Indradhanush.

The Pradhan Mantri Ayushman Bharat Health Infrastructure Mission received a rise in allocation from 2023–24, totalling Rs 2,100 crore, to 2024–25, totalling Rs 4,108 crore.

Under the Saksham Anganwadi and Poshan 2.0 initiative, modifications to Anganwadi centres were intended to address malnutrition and improve early-stage healthcare services.

Under Ayushman Bharat, all ASHA workers, Anganwadi workers, and assistants are covered by healthcare.

The budget allocated to research and development in biotechnology was raised from Rs 500 crore in 2023–2024 to Rs 1,100 crore in 2024–2025.

Out-of-pocket expenditure still high

In India, the cost of healthcare is covered by charitable organisations, the state and central governments, or the patients themselves (also known as out-of-pocket expenditure or OOPE).

The Economic Survey 2023–24 states that although the situation has improved over the past ten years, the country’s OOPE still accounts for almost 50 per cent of all health expenditures.

Although the share of out-of-pocket healthcare costs decreased to over 47 per cent in 2019–20 from a peak of 64 per cent in 2013–14, it is still far more than the 35 per cent threshold that the Survey suggested three years prior.

Between FY15 and FY20, there was less than five per cent increase in the government’s spending on primary healthcare. However, when primary and secondary healthcare are combined, the growth is greater than 11 per cent over the same period, indicating a surge in the utilisation of public hospitals.

Moreover, the proportion of private health expenditures allocated to primary and secondary care has decreased by around nine per cent during the same time frame. This decrease can be attributed to the increased prevalence of tertiary diseases and the use of government facilities for primary healthcare.

India has one of the highest rates of out-of-pocket spending in the world, which causes impoverished households to be particularly impacted and forced below the poverty line.

India is ranked 176th out of 196 nations in terms of the share of current health expenses that are paid for out of pocket, according to The Times of India which cited the Standing Committee on Health and Family Welfare (2022-23).

Stakeholders’ reaction

Stakeholders believe the latest Union Budget will enable the development of advanced healthcare solutions.

Medical oncologist Dr Shyam Aggarwal of Delhi’s Sir Ganga Ram Hospital said, “All imported life-saving drugs are costly and customs duty exemption is a welcome step. Cancer drugs are very expensive and life-saving. Patients require long-term treatment.”

“Trastuzumab Deruxtecan is a breast cancer drug and can be used in all cancers with Her2 positive gene. Osimertinib is lung cancer drug for EGFR mutation,” Dr Aggarwal said.

Dr Ashutosh Raghuvanshi, MD and CEO, of Fortis Healthcare Limited, said, “We appreciate the government’s decision to exempt three cancer drugs from customs duty in the FY 2024-25 Budget. Cancer treatment often involves a significant financial burden for patients and their families.”

“By exempting these drugs from customs duty, the government has taken a concrete step towards alleviating this burden, making essential medications more affordable for those in need across the country. This decision also underscores the government’s commitment to addressing the growing cancer burden in India,” Dr Raghuvanshi said.

Deccan Herald quoted Dr Praveen Gupta, Principle Director and Chief of Neurology, at Fortis Hospital as saying, “Broad reforms, combined with nine priorities and initiatives will enable the development of advanced healthcare solutions, ensuring that the sector keeps pace with global technological advancements."

“The integration of advanced technology and the creation of comprehensive databases will further enhance the efficiency and accessibility of healthcare services, benefitting both provides and patients. Effective collaboration between the government and the private sector will be essential to fully realise the potential of these initiatives.”

He said that the exemption of customs duties on three cancer medicines and reduction of duties on certain medical technologies is “a significant move to strengthen domestic capabilities in the healthcare sector.”

“Though, these measures are far less than expectations, however, they will make advanced cancer treatments more affordable and accessible, addressing a critical need given the high cost of such treatments. Additionally, priorities align with the broader goal of enhancing infrastructure investment and energy efficiency, creating a more conducive environment for improving healthcare delivery and outcomes in India,” he added.

With inputs from agencies