Essential drugs to be sold at non-GST price till August

Patients can continue to buy essential medicines at the pre-GST MRP, that is, not at the increased prices, till new batches arrive at pharmacies and stockists, and reach retail shelves.

This will continue till the market inventory, which could be of around two months, is exhausted. The new stocks with revised MRPs are expected to hit the market from August, industry experts told TOI. Insulin and critical-care products for kidney ailments and cancer, as well as anti-retrovirals, whose prices have been revised downwards, may be among the first to be rolled out.

Essential medicines (those under the National List of Essential Medicines, or NLEM) are taxed at 12% under GST, and insulin and critical-care products at 5%.

With the implementation of GST, the tax liability of companies will increase, which will lead to a marginal 2.29% spike in prices of NLEM drugs, as calculated by the drug price regulator, National Pharmaceutical Pricing Authority. Many life-saving drugs are part of the NLEM, which comprises around 25-30% of the pharma retail market (by value).

The NPPA has also finalised post-GST ceiling prices of NLEM medicines, based on information received from companies, and prices were uploaded on its website late on June 30. Prices of approximately 78% of all actively-used and traded drugs in the country are going to remain unaffected post-GST, the NPPA said, adding that patients can report issues with availability of drugs via WhatsApp on 9695736333.

In view of the anti-profiteering clause of the GST Act, manufacturers are only authorised to pass on to consumers the additional burden of tax/duties incurred on scheduled formulations, the NPPA said on Saturday.

Ameesh Masurekar, director, AIOCD Awacs, a pharmaceutical research firm, told TOI, “Generally, there is a market inventory of two months, so stocks with the new price are only expected towards August partially, and September completely.”

“We have started replenishing medicines wherever the stock is low or over. Supplies are expected after a couple of weeks, with the revision in prices,” a Mumbai-based distributor said.
 Apart from 17 days of stockist inventory, there is two weeks of retail inventory — so there is no possibility of drug shortage, and all brands of medicine are available in adequate quantities, Masurekar added.

“Although hospital services are exempt, the outsourced services, aesthetics and outpatient pharmacies are subject to GST imposition. In the pharmaceutical landscape, the 5% rate on life-saving drugs that treat diseases like malaria, HIV-AIDS, tuberculosis, and diabetes is expected to marginally increase the prices of medicinal drugs, leading to a domino effect in the cost structures for the healthcare sector,” Ameera Shah, MD and promoter of diagnostic chain, Metropolis Healthcare said.
Share Now