Duty Exemptions for Rare Disease Drugs


    In Context

    • The Union 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.


    How does the new duty exemption work?

    • The exemption has been granted by the Central Board of Indirect Taxes and Customs (CBIC) by substituting “Drugs, Medicines or Food for Special Medical Purposes (FSMP)” instead of “drugs or medicines”.
    • Now, in order to avail of this exemption, the individual importer has to produce a certificate from the 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 a concessional rate of 5 per cent or nil.

    What are Rare Diseases?

    • Rare diseases (also called “Orphan” diseases) are broadly defined as diseases that infrequently occur in a population and three markers are used (the total number of people with the disease, its prevalence, and the availability/non-availability of treatment options).
    • The World Health Organisation (WHO) defines a rare disease as having a frequency of less than 6.5-10 per 10,000 people.
    • According to the Organization for Rare Diseases India, rare diseases include inherited cancers, autoimmune disorders, congenital malformations, Hirschsprung’s disease, Gaucher disease, cystic fibrosis, muscular dystrophies and Lysosomal Storage Disorders (LSDs)

    What are the Major Challenges in Fighting Rare Diseases?

    • Less than 5% have therapies available to treat and about 95% have no approved treatment and less than 1 in 10 patients receive disease-specific treatment.
    • Where drugs are available, they are prohibitively expensive, placing immense strain on resources and also the government has not been able to provide these for free.
    • In India, there is a lack of epidemiological data on the prevalence here and hence has only classified certain diseases as ‘rare’.
    • The use of inconsistent definitions and diverse terminology can result in confusion and inconsistencies and have implications for access to treatment and for  research and development.
    • Diagnosis of a rare condition may take  up to several years, owing to difficulty  in diagnostic modalities and lack of awareness among doctors.
    • In NPRD policy, many CoEs were yet to seek financial support as per the policy for treating the patients.

    National Policy for Rare Diseases, 2021

    • About:
      • Promotion of local development and manufacture of drugs and creation of a conducive environment for indigenous manufacturing of drugs for rare diseases at affordable prices.
    • Provisions:
      • It categories ‘rare disease’ into three groups: 
      • Group 1: Disorders amenable to one-time curative treatment.
      • Group-2: Diseases requiring long term/lifelong treatment having relatively lower cost of treatment and benefit has been documented in literature and annual or more frequent surveillance is required.
      • Group 3:- Diseases for which definitive treatment is available but challenges are to make optimal patient selection for benefit, very high cost and lifelong therapy.
    • The government would notify selected Centres of Excellence at premier government hospitals for comprehensive management of rare diseases.
      • The Centres of Excellence would be provided a one-time grant to a maximum of Rs. 5 crore each for infrastructure development for screening, tests, treatment.

    Rashtriya Arogya Nidhi

    • The Scheme provides financial assistance to patients, living below the poverty line (BPL) and who are suffering from major life-threatening diseases, to receive medical treatment at any of the super speciality Government hospitals/institutes.


    What are the concerns associated with the National Policy for Rare Diseases?

    • It offers no support to patients under the earlier National Policy for Treatment of Rare Diseases 2017.
    • Patients with Group 3 rare diseases are left to fend for themselves due to lack of proper selection criteria.
    • In the absence of sustainable funding support for Group 3 patients, the lives of all patients, mostly children, are now at risk and at the mercy of crowdfunding.
    • Even Group 1 is only for a few and Group 2 has been openly left for the State government.
    • The policy fails to capture that these diseases last a lifetime and also does not realise that people might not be able to even make it to the prescribed tertiary hospitals for treatment.
    • Diseases such as LSD for which definitive treatment is available, but costs are prohibitive, have been categorised as Group 3. However, no funding has been allocated for the immediate and lifelong treatment needs, for therapies already approved by the Drugs Controller General of India (DGCI).


    • There is an immediate need to create awareness amongst the general public, patients & their families and doctors, training of doctors for early and accurate diagnosis.
    • As resources are limited and have multiple uses, the policy makers have to make a choice of prioritizing certain set of interventions over others.
    • There should be policy measures for supporting R&D and drug development for rare diseases.

    Source: TH