27/11/2025
GST REDUCTION IN PHARMCEUTICALS AND ITS IMPACT ON ALL STAKEHOLDERS INCLUDING PATIENTS
The recent GST reduction on medicines in India, effective September 2025, has brought significant benefits to all stakeholders in the pharmaceutical supply chain and most importantly, to patients. The GST on 33 critical lifesaving drugs, including those used for cancer and rare diseases, has been completely exempted (NIL GST). Additionally, the GST rate on all other drugs and medicines has been reduced from 12% to 5%. This reform also extends to medical devices and equipment, decreasing their GST from 18% or 12% to 5%. These changes substantially lower the cost burden on patients and improve access to essential healthcare treatments.
For manufacturers, the GST reduction means a simplified tax structure and a more competitive pricing environment, which encourages increased production and innovation. Manufacturers have been mandated to revise the maximum retail prices (MRP) of medicines to reflect the new GST rates, which also helps in making medicines more affordable in the market without the need for re-labeling existing stock. Distributors and retailers benefit from increased sales volumes due to the enhanced affordability of medicines, which ensures a steady supply chain and wider distribution across regions.
End consumers, especially patients suffering from serious and chronic conditions, gain the most from these reforms as the price reductions lead to lower out-of-pocket healthcare expenses. The reduction in GST on medical apparatus and devices also indirectly benefits patients by lowering hospital and diagnostic costs. Overall, the GST cut fosters equitable healthcare access, strengthens public health, and supports the growth and sustainability of the Indian pharmaceutical sector, reinforcing India’s position as a global pharmaceutical hub.
The details of changes are :
• GST on 33 lifesaving drugs is now NIL; on other medicines, reduced from 12% to 5%.
• Medical devices and equipment GST reduced to 5%, lowering healthcare costs.
• Manufacturers revise MRPs downwards, promoting affordability without relabeling burden.
• Distributors and retailers see increased turnover due to greater medicine affordability.
• Patients benefit from reduced treatment costs and better access to essential medications.
This all-around benefit from manufacturers to the end users marks a significant step toward affordable and accessible healthcare in India, contributing positively to public health and the pharma industry alike.
Regards,
JAKSTAR PHARMA