GST Slashed on 36 Lifesaving Drugs: A Bold Move to Ease Patients’ Burden

GST Slashed on 36 Lifesaving Drugs A Bold Move to Ease Patients’ Burden

India’s central government has announced a sweeping reform: 36 lifesaving medicines, including those for cancer, cardiovascular disease, diabetes, and rare genetic disorders, are now exempt from Goods and Services Tax (GST). What once carried 5% or 12% GST will now attract zero tax, enabling significant cost relief for patients.

What Changed? The Details

·         The policy, effective from 22 September 2025, removes GST entirely on these 36 essential drugs, many of which involve high-cost therapies like gene therapy, monoclonal antibodies, and injectables for chronic disease management.

·         Previously, manufacturers and importers could claim Input Tax Credit (ITC) on raw materials, but losing GST would force them to forgo that credit. Therefore, the policy retains a 5% GST rate on many other medicines and medical devices (down from 12%) to balance affordability and industry sustainability.

·         Some of the medicines exempted include Onasemnogene abeparvovec (for spinal muscular atrophy), Daratumumab, Atezolizumab, Inclisiran, Alirocumab, Evolocumab, among others.

Why This Matters

1.    Substantial Cost Savings for Patients
For many patients, especially those on long regimens (e.g. cancer therapies, rare disease treatments), removing the 5–12% GST tax can save thousands to lakhs of rupees over time.

2.    Improved Adherence to Therapy
High out-of-pocket medical expenses often cause patients to skip dosages or delay treatments. With lower costs, therapies become more sustainable and accessible.

3.    Healthcare Equity & Access
Patients in underserved or rural areas often lack insurance coverage or state subsidies. The GST exemption helps narrow disparities in access to high-end therapies.

4.    Relief for Insurance & Public Health Budgets
As medical bills shrink, insurance claims may reduce, and public health expenditure could become more efficient. The move complements the broader shift in GST structure for medical devices, diagnostics, and health insurance.

Challenges & Caveats

·         Changing MRPs & Industry Pass-through
Many existing medicines are sold at MRPs that include GST. Manufacturers and pharmacies must revise prices and ensure the benefit actually reaches patients.

·         Supply Chain & Availability
Tax relief does not guarantee prompt availability. Import, manufacturing capacity, distribution bottlenecks and regulatory delays may still limit access.

·         Regulatory Compliance & Oversight
States must enforce the new pricing, monitor profiteering, and prevent unjustified markups.

·         Sustainability for Pharma Industry
With no GST on these drugs, the industry must find alternative means to remain profitable while absorbing the lost tax credit.

·         Not All Medicines Exempt
Only 36 drugs got full exemption; many other medicines and devices will now attract 5% GST, not zero.

What Patients Can Do

·         Check Updated Prices
When buying medicines, especially expensive or biologic ones, verify if new GST-free pricing is applied.

·         Ask for Invoices/Breakups
Request bills that show the tax component before and after the change.

·         Report Discrepancies
If a pharmacy or hospital doesn’t pass on the tax benefit, patients can lodge complaints with drug regulatory agencies or state enforcement units.

·         Plan Therapy Costs
Speak with your doctor and pharmacist - now that cost burdens are partially reduced, optimal dosing or newer therapies might become more feasible.

·         Monitor Policy Notifications
Keep an eye on CBIC, GST Council, and state notifications about implementation and clarifications.

Remember

This GST reform marks one of the boldest steps yet to make high-cost therapies accessible in India. By removing tax on some of the most expensive lifesaving drugs, the government signals that health affordability is a priority. But the real success will depend on how quickly these savings reach patients, how the industry adapts, and how states enforce the new structure.

If implemented transparently and timely, this could be a landmark policy shift in the fight against catastrophic health expenditure in India.

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