Hyderabad: The Indian Society for Clinical Research, bio-pharma and herbal drug companies have objected to the Centre’s decision to levy service tax of 12.3 per cent on the clinical trial industry.
The industry has witnessed a major decline in the last 18 months with approvals being very slow. Clinical trials on Indian patients are required because the efficiency of the drug differs from region to region.
The previous government had withdrawn service tax on drug testing and the new law is already making many multinational partners look for other options as they find they will have to dig deep into their pockets.
Dr Manoj Agarwal, cardiologist said, “Often the drugs which come from abroad are not prescribed completely. We give only half dosage as the build of the people there is different from those out here. Hence if there are drugs tried here, we will be sure of how they will work on our population.”
The new policy to get these multinational companies in a service tax regime will send wrong signals to the global community, claims the industry as it is struggling to establish better and affordable health care for all in India.
The herbal companies depend on human studies to prove their case to the drug control authorities. A senior official of a research centre said, “The herbal industry does 10 clinical trials every year which spans over four months. The investigations for our human studies are mandatory as the products are prescription driven and the clinical data on effectiveness and well-being requires to be properly documented. These new rules will badly hit the net earnings of the company.”
The earlier government had withdrawn service tax on drug testing and the new law is already making many multinational partners look for other options as they find they will have to dig deep into their pockets.
