Treatment costs to ease with GST cut on medicines, devices, insurance

Patients can expect an average reduction of around 7% on prices of medicines billed from Sept 22. This will be in the wake of the GST being lowered from 12% to 5% on all drugs. A reduction in GST on life-saving and chronic therapies, medical devices, medtech items, and health insurance is expected to lower medicine costs, make treatment more affordable, and ease access to essential healthcare.Chemists and stockists are expected to bill existing stocks at the reduced rate, even if the printed MRP is higher, industry experts said. This would apply to medicines and devices like glucometers, available at pharmacies, on which the tax rate has been tweaked. "GST reform is a welcome move and a landmark step’’, Sudarshan Jain secretary-general of the Indian Pharmaceutical Alliance told TOI. Under GST 2.0, Govt fully exempted 33 life-saving and cancer medicines, ``a step that will bring direct relief to patients.

Equally, the reduction in GST on a wide range of medicines from 12% to 5% will help ease the overall treatment burden and make essential therapies more affordable'', the IPA said in a statement. These reforms will improve the accessibility of medicines, ensure wider availability across healthcare settings, and contribute positively to the government’s vision of affordable healthcare.For stocks lying in warehouses, the industry is coordinating with channel partners to ensure a smooth transition so that the GST benefit is fully passed on to patients.

This could avoid the challenge of re-stickering, the expert said. Typically, companies carry two to three weeks of inventory.Additionally, the GST reduction in diagnostic kits and reagents to 5% should also catalyse the much-needed focus on preventive health. GSK Velu, Chairman & Managing Director, Trivitron Healthcare, Neuberg Diagnostics and Maxivision Super Speciality Eye Hospitals says "Reducing the current 12–18% GST on medtech devices, diagnostic machines, reagents, and consumables to 5% will lower establishment costs for new entrant hospitals and significantly lower recurring costs for others.

Such products as diagnostic kits, imaging machines, surgical disposables, and reagents will now become cheaper, easing the financial burden on providers. This will directly mean reduced treatment costs for the patient. By the rationalization of the inverted duty regime, the reforms will also provide an impetus to domestic medtech manufacturing’’. The GST reduction on medicines and devices will enable hospitals and healthcare providers to put more resources towards upgrading technology, driving innovation, and contributing towards patient-centric care. Further, GST on job work services for the pharma sector has also been reduced from 12% to 5%.Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat said: "For pharma players, the clarity on a 5% slab and exemptions removes long-standing ambiguity, enabling transparent pricing and better market planning. The move will expand access in semi-urban and rural markets, ease litigation, and free up resources for innovation. ..It signals a shift in GST’s philosophy—where taxation aligns with social priorities, ensuring that access to critical medicines is never compromised by cost''.