Union Budget 2024: AstraZeneca set to gain from customs duty exemption on key cancer drugs in full Budget

Global pharmaceutical giant AstraZeneca is expected to benefit following Finance Minister Nirmala Sitharaman’s announcement of the exemption of customs duties on three key cancer drugs in the Union Budget 2024-25 on Tuesday.

These 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.

Previously, a 10% customs duty on these drugs had significantly impacted their cost. With the new exemption, prices are likely to decrease, potentially increasing AstraZeneca’s market share and sales.

Cheering the announcement, shares of AstraZeneca Pharma India rallied 13% to 7064.65 on July 23, 2024. On a year-to-date basis, the scrip has gained nearly 28%. Meanwhile, it scaled a 52-week high of Rs 7,550 on July 4, 2024.

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). Not all Trastuzumab variants fall under this price ceiling, leading to 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, according to NPPA data.

“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, Ministry of Finance has exempted them from the customs duty,” said a statement from the union health ministry.

This reform aims to make cancer treatment more affordable and may enhance AstraZeneca’s position in the Indian market, pharmaceutical analysts said. “AstraZeneca is likely to benefit from this move, which should help make drugs more affordable and increase access. The company is the only multinational introducing its complete drug pipeline from its parent portfolio in India,” said Vishal Manchanda, Senior Vice President–Institutional Research at Systematix.

“The National Cancer Registry Programme (NCRP) report estimates that one in nine people are likely to develop cancer in his/her lifetime in India. The pivotal announcement by the government, to fully exempt three more medicines from customs duties to provide relief to cancer patients, is a welcome step,” Dr. Sanjeev Panchal, Managing Director & Country President AstraZeneca Pharma India Limited told BT. 

“We deeply appreciate the decision and are now working on how the benefit can be passed to the patients in our country that will help expand access to innovative medicines. At AstraZeneca, we are thankful and proud to be a part of the government’s movement to tackle cancer, putting patients first,” he said. 

Trastuzumab Deruxtecan, branded as Enhertu, was launched in India on 3 January 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 17 February 2022. It is used with chemotherapy to treat advanced biliary tract cancer.

Osimertinib, known as Tagrisso, was approved by the Drug Controller General of India (DCGI) on 9 August 2018, for first-line treatment of advanced NSCLC with specific genetic mutations. It is also effective for patients with brain metastases.

Source: bt Business Today