The reduction of Goods and Services Tax (GST) rates on various essential drugs, including key drugs for treatment of cancer, rare diseases, and severe chronic conditions, will help ease the treatment burden and benefit patients in the long run, experts said.
The GST Council on Wednesday slashed taxes from 12% to nil for 33 lifesaving drugs and medicines and from 5% to nil on 3 lifesaving drugs and medicines used for treatment of cancer, rare diseases and other severe chronic diseases. (Representational image)
“The government’s decision to exempt life-saving and cancer medicines from GST is a step that will bring direct relief to patients and their families. Equally, the reduction in GST on a wide range of medicines from 12% to 5% will help ease the overall treatment burden and make essential therapies more affordable,” Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance, said. “These reforms will improve the accessibility of medicines, ensure wider availability across healthcare settings, and contribute positively to the government’s vision of affordable healthcare for all. The pharmaceutical industry remains committed to working alongside policymakers to further enhance patient access and advance India’s health care outcomes.”
The GST Council on Wednesday slashed taxes from 12% to nil for 33 lifesaving drugs and medicines and from 5% to nil on 3 lifesaving drugs and medicines used for treatment of cancer, rare diseases and other severe chronic diseases. These include: agalsidase beta (for a rare genetic disease), imiglucerase (to treat the rare Gaucher disease), eptacog alfa activated recombinant coagulation factor VIIa (genetically engineered protein that help blood clot), onasemnogene abeparvovec (to treat spinal muscular atrophy), asciminib (to treat chronic myeloid leukemia), mepolizumab (monoclonal antibody to treat inflammatory conditions), daratumumab (monoclonal antibody to treat multiple myeloma), risdiplam (to treat spinal muscular atrophy), amivantamab (targeted cancer therapy), and laronidase (enzyme replacement therapy).
The government has also prescribed a 5% rate for all medical devices and instruments used in medical, surgical, and dental practices, such as anesthetics, medical-grade oxygen, gauze, bandages, diagnostic kits, surgical gloves, glucometers, thermometers, and other appliances, lowering the cost of health care delivery for hospitals, diagnostic centres, and clinics, and encourage wider adoption of modern diagnostic tools, particularly in tier-2 and tier-3 cities.
“The government’s decision to reduce GST on diagnostic kits, reagents and a wide range of medical technology items from 12% to 5% is a reform in line with NATHEALTH’s long-standing recommendations for a more enabling indirect tax framework in the healthcare sector, one that acknowledges the critical role of preventive health and supporting medical technology in strengthening healthcare delivery,” said Ameera Shah, president, NATHEALTH, and executive chairperson, Metropolis Healthcare Ltd. “By easing costs and improving affordability, the measure will enhance access to quality healthcare services, support early disease detection, and bring greater consistency by standardising GST rates across preventive, curative and rehabilitative care.”
Dr Harsh Mahajan, founder Mahajan Imaging & Labs, and chairman, FICCI Health Services Committee said the GST rate rationalisation undertaken by the GST Council and reduction of GST from the existing 12% and 18% to 5% on medical devices, diagnostic kits and reagents is in-line with long-standing recommendations of FICCI.
“We are also hopeful that GST on equipment maintenance service contracts will also be brought down from 18% to 5%, in-line with rate rationalisation, and the fact that hospitals and diagnostic centres do not get any input tax credit on GST that they pay on essential items like equipment, lease rentals, equipment service contracts etc. which is 4-5% of total revenue leading to embedded taxes and higher patient costs.”
These reforms aim to discourage harmful consumption, lower the cost of medicines and medical devices, encourage preventive healthcare, and boost insurance coverage, said the government in a statement issued on Thursday. “The reforms strongly align with national initiatives such as Ayushman Bharat, Poshan Abhiyaan and the Fit India Movement, while supporting the vision of ‘Affordable Healthcare for All.’” the government said.