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NPPA works out provisional ceiling prices of 761 formulations towards GST implementation
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Shardul Nautiyal, Mumbai
June 30 , 2017
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Despite the fact that pharma industry was apprehensive about substantial
hike in drug prices under the new goods and services tax (GST) regime,
it is unlikely to be the case for the pharmaceutical industry. While
around 80 per cent drugs were put in the 12 per cent GST bracket (up
from the current 9 per cent slab), implying a sharp rise in prices, the
National Pharmaceutical Pricing Authority (NPPA) has worked out
provisional ceiling prices of 761 formulations towards a smooth GST
implementation on July 1 for the pharmaceutical industry.
The
pharma pricing regulator has notified the revised ceiling prices of 761
drugs which are part of the Schedule 1 of the Drug Price Control Order
(DPCO) 2013. According to the revised list issued by the NPPA, prices of
most drugs have come down.
Somes of the scheduled drugs are 5 -
aminosalicylic acid, 5-fluorouracil, abacavir, abacavir (A) + lamivudine
(B), acetazolamide, acetylsalicylic acid, acyclovir, adenosine,
adrenaline, albendazole, allopurinol, alprostadil, amiodarone,
amitriptyline, amlodipine, amoxicillin, amoxicillin (A) + clavulanic
acid (B), amphotericin B –conventional, amphotericin B –
lipid/liposomal, ampicillin, anti - rabies immunoglobulin, artemether
(A) + lumefantrine (B), artesunate, artesunate (A) + sulphadoxine -
pyrimethamine (B), ascorbic acid (vitamin C), atazanavir (A) + ritonavir
(B), atenolol, atorvastatin, atracurium, atropine, azathioprine,
azithromycin, baclofen, benzathine benzylpenicillin, benzoyl peroxide,
betamethasone, bisacodyl, bleomycin, bortezomib etc.
With this regulatory move, the price increase after the GST roll-out would be marginal as the base price has been lowered.
While
most of the drugs will fall under the 12 per cent GST bracket, certain
life-saving drugs are in the 5 per cent tax slab under the new regime.
Under the GST regime, the prices of stents have not been increased. The
NPPA has kept the prices of drug eluting stents at Rs. 30,800 and bare
metal stents at Rs. 7,400. Just like stents, prices of
immunosuppressants like cyclosporine and drugs to treat leukaemia remain
unchanged. Prices of erythropoietin, filgrastim and hepatitis B vaccine
also remain the same.
The NPPA notification would mean
reduction in prices of drugs to treat HIV, cancer, Crohn’s disease,
pneumonia and skin-related ailments among others. Prices of some of
these drugs have come down by a few hundred rupees. For instance, the
price of anti-cancer drug bortezomib has been brought down to Rs. 11,160
from Rs. 11,637 for a packet of injection powder. Apart from drugs to
treat chronic diseases, regular medicines like paracetamol have also
seen price cuts.
The NPPA notification of prices has not
included the GST element. The list has deducted the excise duty element
and VAT from the existing ceiling price of the drugs. In the case of
scheduled drugs where companies have been exempted from paying the
excise duty, the NPPA has not revised the ceiling price. Companies
believe that while the ceiling price has come down for these drugs,
adding the GST element to the new ceiling price will make medicines
slightly more expensive than their current rates. Analysts have
maintained that the impact of GST will not be drastic on such drugs. But
the industry is worried about input credit which is only 40 per cent
for those without receipts.
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