While exemptions have already been provided to specified drugs for treatment of Spinal Muscular Atrophy or Duchenne Muscular Dystrophy, the government has been receiving many representations seeking customs duty relief for drugs and medicines used in treatment of other rare diseases
The Central Government has given full exemption from basic customs duty on all drugs and food for Special Medical Purposes imported for personal use for treatment of all rare diseases listed under the National Policy for Rare Diseases 2021 through a general exemption notification.
In order to avail this exemption, the individual importer has to produce a certificate from Central or State Director Health Services or District Medical Officer/Civil Surgeon of the district.
Drugs/medicines generally attract basic customs duty of 10 per cent, while some categories of lifesaving drugs/vaccines attract concessional rate of 5 per cent or nil.
While exemptions have already been provided to specified drugs for treatment of Spinal Muscular Atrophy or Duchenne Muscular Dystrophy, the government has been receiving many representations seeking customs duty relief for drugs and medicines used in treatment of other rare diseases.
Drugs or special foods required for the treatment of these diseases are expensive and need to be imported. It is estimated that for a child weighing 10 kg, the annual cost of treatment for some rare diseases, may vary from Rs 10 lakh to more than Rs 1 crore per year with treatment being lifelong and drug dose and cost, increasing with age and weight.
This exemption will result in substantial cost savings and provide much needed relief to the patients.
The government has also fully exempted Pembrolizumab (Keytruda) used in treatment of various cancers from basic customs duty.
Commenting on this announcement, Charu Sehgal, Lifesciences and Healthcare Leader, Deloitte India said, “Full exemption from custom duty, announced by the Central Government for drugs and foods for special medical conditions will provide much needed relief to patients suffering from rare diseases. These include some cancers whose treatment is extremely expensive and often life long. Patients of rare diseases do not make the volumes that can drive down prices and hence support such as this from the government is critical. One hopes that the process of availing the exemption is not very complex and time consuming for the patients.”
Shantanu Jindel, Partner, IndusLaw said, “Market for drugs to treat rare diseases is quite small given its very nature, and this significantly increases the costs of such drugs. Any effort to reduce the cost of drugs to the patient will play a crucial role, especially if necessary mechanism is also put in place to ensure that the drugs are made available on a timely basis. The notification also provides a list of rare diseases for reference which seem to be based on the criteria set out in the National Policy for Rare Diseases, 2021. Given the beneficial intent of the customs duty exemption, government will need to ensure this list is frequently updated so that the benefits reach all patient groups suffering from rare diseases.”