Patients can buy Medicines on Pre-GST Price till August

On 1^st July 2017, India introduced a new era of single nationwide tax for Goods and Services that will transform the economy with price cuts on key products. GST certainly would benefit most of the sectors including pharmaceuticals and make the taxation process easier as it will replace a number of different taxes and duties.

However, patients can continue to purchase the essential medicines at the pre-GST MRP i.e. the maximum retail price (MRP) fixed before the GST rollout as the pharmacies are yet to receive new supply with revised price list from pharma companies. Thus, for consumers, their medicine bills would look exact same unless they are buying from chain stores.

Companies are making the requisite changes in their product pricing, wholesalers and pharmacies are waiting for the new batches of medicines to make GST transition. Medicines with revised prices and new batches are expected to reach the market from August onwards.

With the implementation of GST, medicines in the National List of Essential Medicines (NLEM) are taxed at 12% while diabetes and critical-care products at 5%. Most of the life-saving drugs are part of the NLEM and by value it accounts for nearly 30% of the pharma retail market.

Medicines for diabetes, cancer, anti-retrovirals and some critical-care products whose prices have been slashed with the implementation of GST, may be among the first to hit the market.

On 30^th June 2017, NPPA has uploaded the post-GST prices of NLEM medicines on their website, based on the information received from pharma companies. As per NPPA, the prices of nearly 78% of all actively-used and traded drugs are going to remain unaffected post-GST across the country. In view of the anti-profiteering clause of the GST Act, pharma companies are only authorized to pass on to consumers the additional burden of tax/duties incurred on scheduled formulations, the NPPA said.

GST Rate on Pharmaceutical Products