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Prices Of Life-Saving Medicines Escalate Under GST

Life-saving Medicines
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Prices of life-saving medicines, used to treat rare diseases have increased by 12%, with implementation of Goods and Services Tax (GST).

This has resulted in soaring medical bills, which has created a lot of trouble for the patients.

These life-saving medicines commonly referred as ‘orphan’ drugs are used in bone marrow transplant, classical Hodgkin Lymphoma, Crohn’s disease and melanoma.

According to a Rare Diseases and Disorders report, there are more than 7 crore patients in India who suffer from orphan diseases.

These orphan drugs are prescribed usually lifelong with certain treatment running into crores.

These already costly treatments have now been burdened with the 12% additional levy, which was nil before July.

Under GST, the government had also increased the ceiling prices of essential medicines listed in the National List of Essential Medicines (NLEM).

The new ceiling prices reflected 2.3 percent increase for price-controlled drugs — that is for NLEM drugs in the 12 percent GST category.

However, medicines which fall in the 5 percent category witnessed no change on MRP (maximum retail price).

The GST impact on orphan drugs sold in the country has largely been neutral as domestic companies absorbed the increased tax liability of 2.3 percent.

The All India Organisation of Chemists and Druggists (AIOCD) has said since the National Pharmaceutical Pricing Authority (NPPA) controls prices of drugs, companies will not increase the prices.

Currently, applicable GST rates on medicines are put in four categories: 0 percent, 5 percent 12 percent and 18 percent. Medicines exempt from tax are human blood and its component and all types of contraceptives.

Only pharmaceutical products made from Nicotine polacrilex gum fall in the high tax cap, which is 18 percent. Otherwise, most of the medicines are under 5 percent or 12 percent GST slabs.

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