What Happened
- A significant gap exists between the budgetary allocation and actual utilisation under India's National Policy for Rare Diseases (NPRD) 2021: while Rs 299.59 crore was earmarked for 2025-26, only approximately Rs 30 crore has been utilised — a utilisation rate of around 10%.
- The 13 Centres of Excellence (CoEs) designated under the NPRD — premier medical institutions tasked with diagnosing and treating rare diseases — have collectively spent less than half of the funds disbursed to them since April 2021.
- Patients with rare diseases face catastrophic out-of-pocket expenditure, with individual treatment costs often running into crores per year for enzyme replacement therapies, gene therapies, and orphan drugs.
- The crisis is compounded by the extreme rarity of diagnostic infrastructure — most rare diseases lack biochemical testing capacity outside major metro centres, delaying diagnosis and treatment initiation.
- Budget 2026-27 waived customs duty on a list of rare disease drugs and cancer medicines, signalling intent to reduce cost barriers, but implementation challenges in fund utilisation remain unaddressed.
Static Topic Bridges
National Policy for Rare Diseases (NPRD) 2021 — Framework and Architecture
The National Policy for Rare Diseases 2021, formulated by the Ministry of Health and Family Welfare, replaced the earlier NPRD 2017. It defines rare diseases as those affecting less than 1 in 2,500 persons. The policy classifies rare diseases into three groups: Group 1 (disorders amenable to one-time curative treatment), Group 2 (diseases requiring long-term, relatively less expensive treatment), and Group 3 (diseases requiring expensive long-term treatment). Financial support under the policy is primarily routed through 13 designated Centres of Excellence — institutions such as AIIMS Delhi, NIMHANS, and other premier institutes — which provide diagnosis, treatment, and registry functions.
- Definition of rare disease: affects fewer than 1 in 2,500 persons (NPRD 2021); globally, some definitions use 1 in 10,000.
- Implementing ministry: Ministry of Health and Family Welfare (MoHFW).
- Nodal implementing institutions: 13 Centres of Excellence (CoEs) across India.
- Financial support cap: Under NPRD 2021, patients from BPL or those spending more than 40% of monthly household income on healthcare can access up to Rs 50 lakh in financial support per patient for Group 1 diseases.
- Separate National Fund for Rare Diseases: Rs 974 crore announced for 2024-26 period.
- Budget 2025-26 allocation: Rs 299.59 crore; utilisation: ~Rs 30 crore (approximately 10%).
Connection to this news: The structural problem is not insufficient allocation but institutional capacity to absorb and deploy funds — reflecting systemic weaknesses in CoE-level programme management, diagnostic infrastructure, and patient identification pipelines.
Orphan Drugs and Access to Treatment — Global and Indian Context
Rare diseases disproportionately affect children and are predominantly genetic in origin (approximately 80%). Most rare disease drugs — called "orphan drugs" — are developed for very small patient populations, making commercial development financially unviable without regulatory incentives. Countries provide market exclusivity, tax credits, and fee waivers to incentivise orphan drug development. India lacks a standalone Orphan Drug Policy — pharmaceutical regulation falls under the Drugs and Cosmetics Act, 1940, and the Central Drugs Standard Control Organisation (CDSCO).
- Orphan Drug Act (USA, 1983): Grants 7-year market exclusivity, tax credits, and priority review — the global template for orphan drug incentives.
- EU Orphan Regulation (2000): Similar provisions with 10-year market exclusivity.
- India: No dedicated Orphan Drug Act. The New Drugs and Clinical Trials (NDCT) Rules, 2019, provide some fast-track provisions for orphan drugs but no comprehensive incentive framework.
- Customs duty waiver (Budget 2026-27): Removes import duty on a specified list of rare disease drugs — reducing (but not eliminating) cost barriers.
- Many rare disease treatments (enzyme replacement therapy, gene therapy) cost Rs 1-5 crore per patient per year.
- National Rare Disease Registry: Under NPRD 2021, but enrolment remains low due to diagnostic capacity gaps.
Connection to this news: The absence of domestic manufacturing and a dedicated orphan drug framework means India depends almost entirely on imported treatments, keeping costs prohibitively high even after customs duty waivers — compounding the problem of unutilised treatment budgets.
Right to Health and State Obligations Under the Constitution
Article 21 of the Constitution (right to life and personal liberty) has been interpreted by the Supreme Court to include the right to health — making healthcare access a fundamental right obligation. Article 47 (a Directive Principle of State Policy) specifically directs the state to raise nutrition levels, improve public health, and as a primary duty, prohibit drugs injurious to health. For rare disease patients, the gap between policy existence and effective implementation raises a constitutional accountability question.
- Paschim Banga Khet Mazdoor Samity v. State of West Bengal (1996): SC held that failure of state to provide timely medical treatment violates Article 21.
- State of Punjab v. Mohinder Singh Chawla (1997): SC affirmed right to health as integral to right to life.
- NPRD 2021 creates an entitlement framework — but the gap between budget allocation and utilisation effectively denies this entitlement to patients in practice.
- The Ayushman Bharat — PM Jan Arogya Yojana (AB-PMJAY) does not cover rare disease treatments (the cost ceiling is Rs 5 lakh per family per year, far below rare disease treatment costs).
Connection to this news: The 90% budget underutilisation under NPRD 2021 represents a governance failure that has constitutional dimensions — patients who are eligible for government-funded treatment are effectively denied their Article 21 right due to institutional bottlenecks, not absence of funds.
Key Facts & Data
- NPRD 2021 definition: Rare disease affects fewer than 1 in 2,500 persons.
- Budget 2025-26 allocation for rare diseases: Rs 299.59 crore.
- Estimated utilisation: ~Rs 30 crore (~10% of allocation).
- Number of designated Centres of Excellence: 13.
- Financial support ceiling for Group 1 patients: Rs 50 lakh per patient.
- National Fund for Rare Diseases (2024-26): Rs 974 crore announced.
- Budget 2026-27: Customs duty waived on specified rare disease and cancer drugs.
- Approximately 300 million people in India estimated to be living with rare diseases (collective burden, across thousands of conditions).
- 80% of rare diseases are genetic in origin; 50% affect children.
- AB-PMJAY coverage ceiling: Rs 5 lakh per family/year (does not cover rare disease costs).