The new GST rates have kicked in. Pharmaceutical products that were earlier taxed at 12% now attract just 5% GST, while 36 critical life-saving drugs are fully exempted (0% GST) under the reform that came into effect on September 22. Case studies by the Indian Pharmaceutical Alliance (IPA) show that treatment and medicine bills for long-term diseases such as obesity, diabetes, and non-alcoholic fatty liver disease, as well as rare diseases like cancer, will become cheaper, providing patients relief from their financial burden.
New GST rates lower expenses of obesity, diabetes, and fatty liver disease patients by Rs 2 lakh
On the basis of a study from an obesity patient who was later diagnosed with 2 diabetes and non-alcoholic fatty liver disease, IPA highlights that a patient’s monthly costs for medicines and tests for obesity before the GST reforms were around Rs 9 lakhs each year. With the new GST reductions on essential medicines to 5%, his expenses have dropped by Rs 2 lakhs.
The IPA highlighted that the exempted drugs largely address oncology, genetic and rare diseases, and cardiovascular conditions—areas with significant treatment costs. The alliance said, “Lower medicine costs will deliver tangible financial relief to patients across all socio-economic groups—from middle-class families to chronic care patients and senior citizens.”
GST reforms beneficial for patients with rare diseases
Patients suffering from rare diseases, cancer, and genetic disorders are expected to benefit the most. India has an estimated 72.6 million rare disease patients, many of whom struggle with the high cost of treatment.
IPA highlights the case of Rohan, a 19-year-old diagnosed with Fabry disease, a rare genetic disorder. His earlier enzyme replacement therapy cost nearly Rs 1.8 crore annually. With GST on such therapies now reduced to zero, his family is saving close to Rs 20 lakh each year.
Breast cancer patients may sees Rs 4 lakh relief on drug bill after GST cut
On the basis of a study of a patient diagnosed with HER2-positive early breast cancer, the IPA highlights that with the GST cut to 5%, the drug bill could come down by about Rs 4 lakh. The treatment requires a combination of Pertuzumab and Trastuzumab, which is among the most effective but also one of the most expensive therapies. The financial burden further increases as the costs of medicines, lab tests, and diagnostics quickly add up.
For patients suffering from long-term conditions like diabetes and hypertension, which require daily insulin and regular medicines, the GST cut translates into annual savings of around Rs 6,000.
Respiratory patients can save Rs 2,351 with GST reforms
A chronic obstructive pulmonary disease was prescribed by his doctor, an essential daily inhaler costing about ₹3,135 per month, totaling Rs 37,620 annually. For a patient who earns a modest ₹15,000 a month, it was a significant strain on his already tight budget.
The tax on essential medicines like these gives an annual savings of around Rs 2,351, which they can use for further treatment.
IPA also highlighted three key benefits for the Indian pharmaceutical sectors with the GST reform.
1. Affordable and accessible medicines
One of the biggest benefits will be affordable and accessible medicines. By lowering the overall tax burden, the reforms will help reduce the prices of essential drugs, making healthcare more equitable. This will also support the broader vision of universal healthcare and encourage preventive treatment across the country.
2. Boosting domestic manufacturing and innovation
With favourable tax structure, local production of essential, specialty, and complex generics will receive a strong push. This will not only strengthen India’s pharmaceutical base but also align with the government’s Atmanirbhar Bharat agenda by reducing dependence on imports.
3. Simplified taxation and operational efficiency
The harmonisation of GST has removed multiple levies, easing compliance for companies. By streamlining processes, pharma firms can now devote more resources to research, development, and innovation, ultimately strengthening India’s position as a global pharmaceutical hub.