In a significant move, the Indian government has announced the exemption of customs duties on three critical cancer drugs in the Union Budget 2024-25. The drugs – Trastuzumab Deruxtecan, Osimertinib, and Durvalumab – are manufactured by AstraZeneca plc, a British-Swedish multinational pharmaceutical and biotechnology company, and supplied in India by its subsidiary, AstraZeneca Pharma India Limited, based in Bengaluru. This decision is expected to make these life-saving drugs more affordable and accessible, benefiting thousands of cancer patients across the country.
Previously, a 10% customs duty on these drugs significantly impacted their cost, making them less affordable for patients. With the new exemption, prices are likely to decrease, potentially increasing AstraZeneca’s market share and sales. Following the announcement, shares of AstraZeneca Pharma India surged by 13% to ₹7,064.65 on July 23, 2024. The stock has gained nearly 28% year-to-date and reached a 52-week high of ₹7,550 on July 4, 2024. This move is set to provide a substantial boost to AstraZeneca’s operations in India, enhancing its competitive position in the market.
Details on Exempted Drugs
Trastuzumab, effective in treating breast cancer, is listed on the National List of Essential Medicines (NLEM) 2022, with a ceiling price of ₹54,725.21 per vial set by the National Pharmaceutical Pricing Authority (NPPA). However, not all variants of Trastuzumab fall under this price ceiling, resulting in an annual turnover of over ₹276 crore. Osimertinib and Durvalumab, regulated under the Drug Price Control Order (DPCO) 2013, are classified as non-scheduled medicines. This allows the NPPA to cap their maximum retail prices and limit price increases to no more than 10% annually. For the 2023-24 period, Durvalumab had an annual turnover of ₹28.8 crore, while Osimertinib, crucial for lung cancer treatment, reported an annual turnover of ₹52.26 crore.
The union health ministry stated, “The request was forwarded by the Ministry of Health and Family Welfare to the Ministry of Finance in view of the 27 lakh cancer patients in the country. To improve the affordability of these drugs, the Ministry of Finance has exempted them from the customs duty.” This reform aims to make cancer treatment more affordable and may enhance AstraZeneca’s position in the Indian market. Pharmaceutical analysts echoed this sentiment, stating that AstraZeneca is likely to benefit from this move, which should help make drugs more affordable and increase access.
AstraZeneca’s Commitment to Innovation and Patient Care
Vishal Manchanda, Senior Vice President–Institutional Research at Systematix, noted, “AstraZeneca is the only multinational introducing its complete drug pipeline from its parent portfolio in India.” Dr. Sanjeev Panchal, Managing Director & Country President of AstraZeneca Pharma India Limited, said, “We deeply appreciate the decision and are now working on how the benefit can be passed to the patients in our country, which will help expand access to innovative medicines. At AstraZeneca, we are thankful and proud to be part of the government’s movement to tackle cancer, putting patients first.”
Trastuzumab Deruxtecan, branded as Enhertu, was launched in India on January 3, 2024, for treating specific types of advanced breast and gastric cancers. It was approved for use in treating breast cancer with low HER2 levels and advanced stomach cancer. Durvalumab, marketed as Imfinzi, received approval from the Central Drugs Standard Control Organisation (CDSCO) on February 17, 2022, for use with chemotherapy to treat advanced biliary tract cancer. Osimertinib, known as Tagrisso, was approved by the Drug Controller General of India (DCGI) on August 9, 2018, for first-line treatment of advanced NSCLC with specific genetic mutations. It is also effective for patients with brain metastases.
The exemption of customs duties on these key cancer drugs is a strategic move by the Indian government to make cancer treatment more affordable and accessible. This decision is expected to have a positive impact on AstraZeneca’s market presence in India, providing a boost to its sales and market share. The company’s commitment to introducing innovative treatments and expanding access to essential medicines aligns with the government’s efforts to improve healthcare outcomes for cancer patients in India.
Resource: Business Today, July 24, 2024
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