‘Treat contract research bodies on par with SMEs’

The ailing Contract Research Organisations (CROs), which conduct drug tests on patients either by conducting clinical trials or BE/BA studies, have urged the government to consider small CROs on a par with SMEs besides extending tax benefits and augmenting R&D budgets.

The sector was under the scanner early this year, when the Supreme Court slammed the government for being negligent in curbing illegal clinical trials and for not preventing ‘rackets’ of some multinational companies conducting illegal clinical trials.

“India needs a strong research culture so as to create at least one blockbuster drug for which R&D and clinical research activities need encouragement by way of a 5-year tax holiday on all products developed in-house,” said Nidhi Saxena, Founder, Karmic LifeSciences, a contract research organisation based in Mumbai.

She added that the government should also extend the weighted deduction on R&D on all research-related services, grants and scholarships for translational medicine.

According to the industry, the government needs to take bold steps in Budget 2013 to promote scientific and research infrastructure development. Thrust should be given to R&D, particularly, clinical research.

Besides, to improve access to healthcare and medicines for the common man, the government has to assign infrastructure status for healthcare sector coupled with a zero-duty on R&D equipment, a longer tax-free allowance to pharma, biotech SEZs and extension of tax exemption to pharma export-oriented units.

Similarly, the industry also said, while the government encourages SMEs, CROs need to be included in this definition as and when they start generating operational profit from the third year of business and a positive return on investment in the next 2-3 years thereafter.