Tax cuts are a relief but won’t go far

Indian Express

Context and Central Issue

The article examines the Union Budget decision to slash customs duty on 17 cancer therapies, positioning it as a humane and necessary step, but one that falls well short of addressing the deeper structural problem of catastrophically high out-of-pocket health expenditure in India. Through patient narratives and expert commentary, it highlights the limits of tax-based relief in making advanced cancer care genuinely affordable.

Key Arguments Presented

Customs duty cuts offer marginal price relief
The reduction in customs duty may lower prices by ₹20,000–25,000 per month for some drugs. While not insignificant, this relief is marginal when therapies cost ₹2–3 lakh per month or more.

High-cost therapies remain unaffordable for most
Targeted therapies, immunotherapies, and CAR-T treatments continue to remain far beyond the reach of average households. Even after tax cuts, cumulative treatment costs over months or years remain financially ruinous.

Insurance coverage is inadequate and fragmented
Most private health insurance plans either cap coverage for advanced cancer therapies or exclude them altogether. Public schemes cover only a fraction of costs, leaving families dependent on personal savings, borrowing, or charity.

Out-of-pocket expenditure dominates cancer care
The article underlines that 60–70% of cancer treatment costs in India are still paid out of pocket, making tax relief an insufficient substitute for systemic financing reform.

Patent protection limits price competition
Many exempted drugs remain under patent protection, preventing large-scale price reduction through generics. Duty cuts alone cannot counter monopoly pricing.

Author’s Stance

The author adopts a cautiously critical stance. While acknowledging the symbolic and practical value of duty cuts, the article clearly argues that such measures are palliative rather than curative. The stance is that meaningful affordability requires deeper interventions in insurance design, pricing regulation, and public health financing.

Biases and Perspective

Patient-centric and equity-oriented bias
The narrative prioritises patient experience and affordability over fiscal or industry considerations.

Scepticism of incrementalism
There is a clear bias against small, incremental policy measures when faced with large structural problems.

Limited engagement with fiscal constraints
The article does not deeply explore budgetary trade-offs or the government’s revenue considerations, focusing instead on welfare outcomes.

Pros and Cons of the Tax Cut Measure

Pros

• Immediate, if limited, reduction in drug prices
• Signals policy sensitivity to cancer care affordability
• May slightly extend insurance coverage duration
• Reduces treatment discontinuation due to short-term cash stress

Cons

• Insufficient relative to total treatment costs
• Does not address insurance exclusions and caps
• No impact on patented drug pricing power
• Benefits skewed toward those already accessing advanced care

Policy Implications

Health financing reform
India must move beyond tax relief toward risk pooling through comprehensive cancer coverage under public and private insurance.

Drug pricing and patents
Stronger use of price negotiation, compulsory licensing (where justified), and faster generic entry are needed for life-saving drugs.

Insurance regulation
Mandatory inclusion of advanced cancer therapies with realistic coverage limits is essential.

Public healthcare investment
Expanded public provision of oncology services can reduce dependence on high-cost private care.

Real-World Impact

• Patients and families receive some relief but remain financially vulnerable
• Insurers face pressure to reassess exclusions and caps
• Pharmaceutical companies retain pricing power due to patent regimes
• Public health system continues to bear credibility risks due to affordability gaps

UPSC GS Paper Alignment

GS Paper II (Social Justice & Governance)

• Health policy and access to healthcare
• Welfare measures and their effectiveness

GS Paper III (Indian Economy)

• Health expenditure and human capital
• Role of taxation and subsidies in social sectors

GS Paper IV (Ethics)

• Equity in access to life-saving healthcare
• State responsibility toward vulnerable citizens

Essay Paper

• “Healthcare affordability in India: beyond budgetary symbolism”
• “Out-of-pocket expenditure as a barrier to human development”

Balanced Conclusion and Future Perspective

The article convincingly shows that customs duty cuts on cancer drugs, while welcome, are structurally inadequate. They ease the edges of suffering but do not alter the core reality of unaffordable advanced care. For most families, cancer treatment remains a financial catastrophe, not because taxes are high, but because health financing is weak and fragmented.

The future policy challenge lies in shifting from price tinkering to systemic reform—expanding insurance depth, strengthening public oncology services, and addressing monopoly pricing. Without this, tax cuts will remain a gesture of intent rather than an instrument of justice.