The Indian government has announced a reduction in GST rates on life-saving medicines, chronic therapies, medical devices, medtech items, and health insurance, aiming to make healthcare more affordable and accessible. Life-saving and cancer medicines have been fully exempted from GST, while a wide range of other medicines now attract a 5% tax instead of 12%. Industry experts and healthcare leaders have welcomed the move, calling it a “landmark step” that benefits both patients and the pharmaceutical sector.

Key highlights

Impact on medicines and treatments

• Life-saving and cancer drugs fully exempt from GST.

• Other essential therapies, previously taxed at 12%, now taxed at 5%.

• Expected to reduce out-of-pocket expenses and ease access to critical treatments.

Medical devices and diagnostics

• GST on medical devices, diagnostic kits, and medtech items reduced from 18% to 5%.

• Includes retail healthcare products such as glucometers, corrective spectacles, and health insurance.

• Lower tax burden improves affordability for patients and standardizes GST rates across preventive, curative, and rehabilitative care.

Industry and expert perspectives

• Sudarshan Jain (IPA): “This will improve access, affordability, and address public health concerns.”

• Ameera Shah (NATHEALTH): “Easier costs will support early disease detection and better healthcare services.”

• Manoj Mishra (Grant Thornton Bharat): “GST rationalization is a win for patients and the pharma industry, enabling transparent pricing and market planning.”

• Rajiv Nath (AiMeD): Calls for timely GST refunds and transition support on packaging material to ensure benefits reach consumers.

Public health significance

• Expected to expand access in semi-urban and rural markets.

• Frees resources for innovation and reduces litigation risks for pharma companies.

• Aligns taxation with social priorities, ensuring critical medicines remain affordable.

  
  

The GST reduction marks a significant policy shift prioritizing affordable healthcare in India. Pharmacists and healthcare providers should be aware of the changes, as they directly affect medicine pricing, patient affordability, and supply chain planning. This reform is expected to ease the financial burden on households, enhance access to essential medicines and devices, and strengthen India’s overall healthcare ecosystem.