Drug prices set to rise with GST

Prices of drugs that fall under price control will increase by 2.3 per cent once the Goods and Services Tax (GST) rolls out on July 1. The National Pharmaceutical Pricing Authority (NPPA) is expected to draft a notification of the rise in drug prices by July 1.

The pharma industry has been pushing for a price rise since the first week of June, and an appeal to this effect was submitted to the NPPA. “We have asked for an increase in the price of controlled drugs, to which NPPA has responded positively. They will release the notification very soon,” said Daara Patel, Secretary General, Indian Drugs Manufacturing Association.

Bhupendra Singh, Chairman, NPPA confirmed the move. “Once the GST notification is issued, we will issue a notification indicating the hike in prices. We are keeping our price lists ready,” said Singh.

Currently, 760 drug compositions are under price control, under the National List of Essential Medicines and their prices are regulated by NPPA. Those pharma companies which overcharge are penalised. “The share of controlled drugs is yet only 20 per cent. About 80 per cent of the market consists of drugs where price control is not applicable,” said Singh. However, Singh said anti-tuberculosis drugs and anti-diabetes drugs like insulin therapy will attract 5 per cent tax and are set to become cheaper. In the case of non-controlled drugs, NPPA has appealed to the pharma industry to not hike prices immediately.

“It is a norm for pharma companies to hike prices of drugs by 10 per cent every year. These items may not see an immediate hike, but by next year, you will see all medicines becoming expensive,” said Anil Navandar, General Secretary, Maharashtra State Chemists and Druggists Association.

Meanwhile, All India Organization of Chemists and Druggists has submitted a list of days for which they can maintain inventory of drugs to NPPA, before the new regime settles smoothly. “The lowest inventory is that of anti-diabetes medication, but chemists have assured that there will be no shortage,” said Sinha. “We have to see the condition of inventory for drugs post July 6. Only after GST is implemented will we know how stocks are flowing and if there will be shortages,” said Navandar.

In brief

760 drug compositions are under price control, and their prices are regulated by NPPA
Share of controlled drugs is 20 per cent; 80 per cent of the market is non-controlled
Anti-TB and anti-diabetes drugs are set to become cheaper