Affordable drugs are at the core of India’s latest transformative healthcare initiative, which aims to further reduce or entirely waive customs duties on nearly 200 essential medicines. By prioritizing access to affordable drugs for conditions like cancer, HIV, rare diseases, and organ transplants, the government is taking decisive action to ease the financial burden on patients and families.
This strategic move to slash the cost of imported medications is expected to significantly expand access to advanced treatments nationwide. The initiative has the potential to redefine how India tackles high-cost diseases and could serve as a benchmark for future pharmaceutical and public health reforms.
Understanding the Policy Shift for Affordable Drugs
Customs Duty Reform for Essential Medicines
The Indian government, through an inter-ministerial panel comprising experts from the Drug Controller General of India (DCGI), Indian Council of Medical Research (ICMR), Department of Pharmaceuticals, and the Directorate General of Health Services (DGHS), is reviewing a list of these essential but non-affordable drugs eligible for customs duty exemptions or reductions.
Under the current proposal:
- Around 69 non-affordable drugs may receive full customs duty exemption, eliminating the existing 10–12% import charges to make them affordable drugs.
- Another 74 non-affordable drugs could be moved to a reduced duty slab of 5% to make them affordable drugs.
- The scope of this policy includes cancer immunotherapy drugs, rare disease medications, antiretrovirals for HIV, transplant drugs, advanced diagnostic kits, and enzyme therapies.
This comes as part of a broader strategy to make treatment for life-threatening and chronic conditions more reachable to anyone due to affordable drugs and to reduce India’s dependence on domestically unavailable, expensive foreign drugs.
The Targeted Medicines and Their Impact
Examples of Key Non-affordable Drugs Likely to Benefit
| Drug Name | Condition Treated | Proposed Duty Change |
|---|---|---|
| Pembrolizumab (Keytruda) | Lung, melanoma, breast cancer | Full exemption |
| Osimertinib (Tagrisso) | Lung cancer | Full exemption |
| Trastuzumab deruxtecan (Enhertu) | HER2-positive breast cancer | Full exemption |
| Hydroxyurea | Cancer, sickle cell anemia | 5% import duty |
| Enoxaparin | Blood clots, DVT | 5% import duty |
| Zolgensma | Spinal muscular atrophy | Full exemption |
| Spinraza | Neuromuscular disorders | Full exemption |
| Evrysdi | Rare genetic disorders | Full exemption |
These expensive or non-affordable drugs are life-saving but have been unaffordable drugs for the average Indian due to their high import and retail costs. By lifting or lowering the customs duty, treatment costs are expected to fall by 10% to 20%, depending on the product and therapy duration.
The Socio-Economic Benefits
Lower Treatment Costs
The immediate benefit of this customs duty reform is lower out-of-pocket expenditure for patients. Cancer immunotherapies and orphan drugs for rare diseases often cost lakhs to crores of rupees. Reducing the tax burden will substantially cut prices, making these treatments accessible to a broader section of the population.
Broader Access to Critical Medicines
Access to drugs for rare diseases, HIV, and advanced-stage cancers has been limited by their high cost. This reform is a step toward universal healthcare accessibility, especially for those dependent on public health institutions and charitable programs.
Boost for Health Equity
For patients in rural and underserved areas, the price drop could be the difference between life and death. Lower costs can increase adoption of advanced treatments in government-run district hospitals and rural clinics.
Historical Background and Precedents
Previous Government Initiatives
India has a precedent of capping prices on essential cancer and HIV medicines. The National Pharmaceutical Pricing Authority (NPPA) has, in the past, mandated price reductions of up to 35% on select drugs.
Rare Disease Policy and Duty Exemptions
In 2023, the government allowed customs duty exemptions for medicines treating rare diseases when imported for personal use. Drugs like Zolgensma and Cerezyme became eligible under this rule, offering partial financial relief to families affected by these debilitating conditions.
Union Budget 2025 Announcements
The 2025–26 Union Budget further extended duty exemptions to 36 essential drugs and lowered import tax rates for six more. This also included a proposal to create over 200 day-care cancer centers across India to decentralize cancer treatment infrastructure.
The Role of Key Institutions
Interdepartmental Committee
Formed in 2024, this committee’s primary role is to continually review global treatment developments and align India’s import duties with the healthcare needs of its population. Members include:
- Drug Controller General of India (DCGI)
- Indian Council of Medical Research (ICMR)
- Department of Pharmaceuticals (DoP)
- Directorate General of Health Services (DGHS)
Their combined expertise ensures that decisions are made with scientific, economic, and public health perspectives.
Potential Challenges to Implementation
Quality Control and Compliance
Reducing import duties is only part of the equation. Ensuring that imported drugs meet strict quality and safety standards is essential. Customs and health departments must enforce rigorous checks and documentation processes.
Revenue Loss vs Public Benefit
Customs duties are a source of government revenue. Waiving them may impact fiscal collections. The government will need to weigh the short-term revenue loss against the long-term savings in public healthcare spending and improved national productivity.
Encouraging Domestic Manufacturing
While the policy supports access to imported drugs, it may unintentionally discourage local pharmaceutical innovation if not coupled with Make in India incentives. Balanced reforms are needed to support both import access and domestic R&D.
Infrastructure and Distribution
Even if drugs are cheaper, patients will not benefit unless there is efficient distribution and healthcare infrastructure. The expansion of diagnostic centers and district-level treatment facilities must complement pricing reforms.
International Comparisons
Globally, countries like the United States have introduced laws (e.g., Inflation Reduction Act) that aim to bring down prescription drug costs through regulatory and negotiation mechanisms. In low- and middle-income countries, global health organizations have negotiated bulk pricing agreements for HIV and tuberculosis drugs.
India’s move, while unilateral, could have similar outcomes in scale and affordability. Moreover, India may use this reform to assert leadership in global health negotiations by advocating equitable access to life-saving therapies worldwide.
Patient-Centric Impact
Cancer Patients
High-cost biologics and immunotherapies such as Keytruda and Enhertu are often financially out of reach. With duty cuts, thousands of patients undergoing long-term cancer treatment can expect reduced expenses and better survival outcomes.
HIV Patients
Antiretrovirals form the backbone of HIV management. While India already has a robust generics market, certain branded, newer drugs or test kits still depend on imports. This reform could enhance India’s fight against HIV/AIDS.
Rare Disease Families
For families dealing with disorders like Spinal Muscular Atrophy (SMA), Lysosomal Storage Disorders (LSDs), and Cystic Fibrosis, imported non-affordable drugs cost up to ₹16 crore per treatment. Customs duty exemptions offer significant relief and hope.
Rural and Low-Income Beneficiaries
By reducing government procurement costs, the reform could empower public hospitals and insurance schemes to cover more patients, especially under programs like Ayushman Bharat.
Strategic Recommendations
To ensure long-term success and equitable impact, the following steps are crucial:
- Publish Transparent Lists: A regularly updated public list of duty-exempt drugs should be made available for patients, hospitals, and importers.
- Domestic R&D Investment: Complement the duty cuts with incentives for Indian pharmaceutical companies to manufacture high-end drugs domestically.
- Awareness Campaigns: Inform the public and healthcare professionals about the policy so that eligible patients can avail of the benefits without delay.
- Digital Monitoring: Use digital tools to monitor drug availability, pricing, and usage trends to prevent misuse or artificial inflation by intermediaries.
- Expand Ayushman Bharat: Integrate these price reforms into insurance packages to ensure broader coverage.
Future Outlook
If implemented effectively, the customs duty reform could set a precedent for further patient-centric healthcare policies in India. By balancing fiscal responsibility with public health, the country could emerge as a leader in accessible, affordable drugs. The policy also underlines India’s commitment to aligning economic reforms with healthcare equity.
Moreover, this initiative reflects the broader ambition of the Indian government to achieve healthcare for all under its Universal Health Coverage (UHC) vision and strengthens the credibility of India’s pharmaceutical governance on the global stage.
Conclusion
India’s decision to slash or eliminate customs duties on nearly 200 life-saving medicines represents a paradigm shift in how the country tackles the affordability of critical healthcare. With rising disease burdens and a growing demand for advanced therapies, this initiative could profoundly change the lives of millions of patients—especially those battling cancer, HIV, and rare diseases.
While challenges remain, the path ahead is promising. With sustained political will, stakeholder collaboration, and public awareness, India can ensure that life-saving medicines are not a privilege but a right for every citizen.
