Cut prices in wake of GST rate reduction: NPPA asks drug cos
New Delhi: Drug pricing regulator NPPA has asked pharmaceutical companies and medical device makers to reduce prices on products on which the GST has been lowered in order to pass on the benefit to the consumers.
In a notification, the National Pharmaceutical Pricing Authority (NPPA) noted that a change in tax rates has an impact on the fixation of maximum retail prices (MRP) of various drugs and formulations.
As per DPCO 2013, MRP of drugs and formulations are inclusive of taxes. Therefore, any downward change in tax or GST rates should be reflected in the MRP and benefit of the reduction should be passed on to the consumers, it noted.
"In view of the above, all the manufacturers and marketing companies are required to revise the MRPs of drugs/formulations on which tax/GST rates have been reduced taking into effect the revised GST rates," NPPA said.
Recalling or re-labelling or re-stickering on the label of the container or pack of the already released stocks in the market is not mandatory if manufacturers are able to ensure price compliance at the retailer level through issuance of a revised price list, it noted.
The NPPA is mandated to fix and revise the prices of controlled bulk drugs and formulations, and to enforce prices and availability of the medicines in the country.
It also monitors the prices of de-controlled drugs in order to keep them at reasonable levels.
The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, on June 12 slashed tax rates on COVID-19 drugs such as remdesivir and tocilizumab as well as on medical oxygen, oxygen concentrators and other COVID-19 essentials.
The finance ministry's revenue department on June 14 notified the lower rates for 18 COVID-related supplies, like hand sanitiser, pulse oximeters, BiPAP machine, testing kits, ambulances and temperature check equipment.
These concessional rates would be applicable till September 30, 2021.
The Council in its June 12 meeting decided to reduce GST on COVID-19 drug tocilizumab and black fungus medicine Amphotericin B to 'nil', from 5 per cent.
