Health in Indiabecame more expensive as the government levied a 5% Goods and Services Tax (GST) on all non-ICU hospital rooms that cost more than ₹5,000.
- India also imports a lot of
medicationsalthough Indian pharmaceutical companies also export to the United States and other countries.
- According to a recent poll by LocalCircles, a community-based social media platform, 52% of respondents feared that a weakening rupee would negatively impact them and their families, as
fooddrugs and the overall cost of health care are rising.
Indians are now expected to face expensive medical care, which will strain their already food-burdened household budgets.
The falling value of the Rupee is the latest nail hitting consumers in all their healthcare needs, be it medical devices, medicines and even hospitalization.
According to a recent poll by LocalCircles, a social media community platform, 52% of respondents feared that a weakening rupee would negatively impact them and their families as food costs, medicines and health care are increasing.
India is heavily dependent on imports for its medical equipment and the weakening rupee is making imports more expensive.
“Their (consumer) fears appear to be well-founded, as India continues to import a considerable amount of pharmaceuticals and medical devices despite a thriving generic drug industry and increased production of medical devices,” the report said.
Exports increase, but so do imports
While India’s pharmaceutical industry exports increased by 103% from $11.6 billion to $24.6 billion during the period 2014-22, it also imports heavily for its own medical needs.
According to data from the Association of Indian Medical Device Industry (AiMeD) Department of Commerce, imports of medical devices rose by a record 41% to ₹63,200 crore (about $8.1 billion) in 2021-22, from ₹44,708 crore (about $6). billion) in 2020-21.
A majority of active pharmaceutical ingredients (APIs), raw materials and hospital equipment are also imported and paid for in dollars, according to the LocalCircles report.
“Given the choice, those who can afford the cost continue to purchase imported devices for implants. In addition, most of the medical equipment used in hospitals continues to be imported, which will necessarily result in increased treatment costs in private hospitals and laboratories,” the report said.
In addition to the value of the rupee, earlier this year the government allowed pharmaceutical companies to increase the prices of domestic formulations by up to 10%. It affected 800 formulations covering major drug groups like painkillers, antibiotics, heart medications and more, further driving up healthcare costs.
Rising input costs are also a concern for the pharmaceutical industry
There are also other problems on the horizon. Rising input costs and rising API prices are already eating into the profitability of pharmaceutical companies. Some of this can be passed on to customers.
According to a report by the rating agency CareEdge, the operating profitability of Indian pharmaceutical companies is expected to decline by 200 to 250 basis points (or 2.5% points) in the financial year 2022-23.
“Due to supply chain disruptions and the ongoing lockdown in China, prices for some APIs have increased by 25-120% while excipient prices have increased by 15-200% over the 12-18 months,” the report said.
On top of that, the Indian government has recently introduced a 5% GST on all non-ICU hospital rooms that cost more than ₹5,000 which would make health care even more expensive.