Quick Summary
India's pharmaceutical industry is preparing for a new phase of growth as sweeping GST reforms promise to make medicines and healthcare more affordable. The sector, which reported 8.7% value growth in August 2025, is expected to see major gains in drug accessibility, pricing and patient volumes. GS
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FAQ :
The GST Council has approved a two-slab structure of 18% standard rate and 5% merit rate for medicines. Additionally, 36 life-saving drugs will now have nil GST.
Several life-saving drugs, including Roche Pharma India's Tecentriq, Gazyva, Rozlytrek, Evrysdi, and Hemlibra, will be GST-free. Treatments like Novartis's Zolgensma and Daratumumab will also see significant price reductions.
Patients will benefit from lower out-of-pocket expenses, especially for costly treatments like oncology and rare diseases. The reforms are expected to improve access to medicines and offer 'hope' to those undergoing treatment.
The reforms are anticipated to drive significant value growth, increase drug accessibility, and boost patient volumes. Companies are expected to recalibrate pricing, expand access programs, and potentially boost innovation.
Industry experts have raised concerns about a potential inverted duty situation where inputs are taxed at 18% while final medicines are taxed at 5%, which could pressure manufacturer margins.
The new GST rates are set to take effect from September 22, 2025.
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