April 03, 2023

Customs duty lifted ondrugs for rare diseases

The government on Thursday announced a full exemption from basic customs duty for drugs and food imported for personal use for the treatment of rare diseases, saying that this will result in substantial cost savings and provide much-needed relief to patients.

In a notification, the Union finance ministry said the annual cost of treatment for some rare diseases may vary from 10 lakh to over 1 crore annually.

It added that individual importers need to produce certificates from central or state officials to avail of the exemption for the diseases listed under the National Policy for Rare Diseases, 2021.

Basic customs duty of 10% is generally charged on medicines. In some categories of lifesaving drugs and vaccines, it is either a concessional 5% or zero. Exemptions were earlier povided to specified drugs for the treatment of spinal muscular atrophy.

Treatment for Lysosomal Storage Disorders (LSDs) — a set of at least six known diseases — could cost between 40lakh and 60 lakh a year for a child with 10kg body weight. With the exemption applicable now, the cost is likely to come down to 36 lakh-54 lakh.

Alglucosidase alfa, which is prescribed to treat one of the LSDs, Pompe Disease, costs around 40 lakh a year.

There is no universally accepted definition of rare disease; however, the World Health Organization (WHO) defines a rare disease as often debilitating lifelong disease or disorder condition with a prevalence of 1 or less, per 1,000 population.

Different countries have their own definitions to suit their specific requirements, and as per the Indian Council of Medical Research (ICMR) it is one in 2,500 people or less.

Since India doesn’t know the exact disease burden in these cases, it is estimated by applying international standards that about 6-8% of country’s population (72-96 million) is affected by a rare disease. ICMR, however, has begun a hospital-based registry to know the prevalence of rare diseases.

The centre, in its notification, has provided a list of 51 odd rare diseases for reference, for which drugs are imported.

It has also included anti-cancer drug Pembrolizumab among those eligible for zero duty.

The list price for each dose of the injection Pembrolizumab is close to 8,50,000, with the prescribed annual treatment costing up to 1.5 crore.

The government has been looking to help patients suffering from rare diseases for a while, and came out with a National Policy for Rare Diseases in 2021 that has the provision for financial support of up to Rs 50 lakhs to the patients suffering from any category of rare diseases, although BJP MP Varun Gandhi claimed in January that no patient has thus far benefited from this.

In most cases the illness is serious, chronic, debilitating and life threatening, often requiring long-term and specialised treatment.

While an estimated 6,000 to 8,000 rare diseases exist globally, about 80% of all rare disease patients are affected by around 350 rare diseases.

Rare diseases include genetic diseases, rare cancers, infectious tropical diseases and degenerative diseases. About 80% of rare diseases are genetic in origin, and tend to largely impact children.

Experts welcomed the move.

Prasanna Kumar Shirol, the co-founder of the Organisation for Rare Diseases India, lauded the initiative, but pointed out that it will largely benefit well-to-do people who can afford to import expensive drugs costing crores of rupees. “Not all affected patients can afford to import drugs worth that much money.”

Shirol, who has been working for the rights of patients suffering from rare diseases since 2008, said it was a cumbersome task to seek exemptions from customs duty that were earlier provided on a case-to-case basis. “Now approval can be sought from local authorities... that is a big relief.”

He said the move will also aid the free drugs charitable programmes of pharma companies as customs duty is 10% and for a drug costing 1-1.5 crore annually, it is a lot. “There are other benefits the government is extending under the National Police For Rare Diseases, including one-time allocation of 50 lakh... there is a lot to still achieve.”

Dr IC Verma, senior genetic medicine specialist, said, “There seems to be a disadvantage and that is if a company licenced to import and distribute these drugs in the country imports, it is unlikely to get an exemption.

This seems to be more for an individual who wants to import these drugs and then the benefit may not be passed on to consumers if its bulk procured by a company. The government needs to clarify this point, and if required make modifications.”

The exemption on Thursday was announced days after Congress lawmaker Shashi Tharoor’s tweet about Union finance minister Nirmala Sitharaman’s intervention in getting 7 lakh GST exemption for the cancer medication worth 65 lakh of a girl went viral on Tuesday.

Tharoor said the girl’s parents approached him saying she was suffering from rare cancer and needed an injection costing 65 lakh. The parents told Tharoor that they needed an additional 7 lakh for GST and that they could not afford that.

Tharoor said the girl needed the medicine immediately as the drug was perishable and would expire in the custody of customs.

‘’The family will get their injection, the baby will live, and our exchequer will sacrifice 7 lakhs in GST income to bring life and joy to a small child. Whenever I am assailed by doubts about spending so much of my life in politics, something like this happens and makes it all worthwhile,’’ said Tharoor.

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