The Goods and Services Tax (GST) rollout has brought about many changes in the Indian economy, some of which are beneficial, while others have their downsides. One of the downsides of GST is that medicines will get costlier after the rollout. In this article, we will discuss why this is happening and what it means for patients and the pharma industry.
The main reason why medicines are getting costlier after GST rollout is that they are now being taxed at a higher rate than before. Earlier, medicines were taxed at a rate of 5%, but now they are being taxed at a rate of 12%. This is a significant increase in taxation, and it is understandable that the prices of medicines will go up.
Another reason why medicines are getting costlier is that the GST regime has done away with the excise duty exemption that was available for medicines manufactured in tax-free zones. Earlier, if a medicine was manufactured in a tax-free zone, it was not subject to excise duty. However, under the GST regime, this exemption has been removed, and medicines manufactured in tax-free zones will now have to pay excise duty.
The increase in the prices of medicines will affect patients, especially those who are suffering from chronic diseases and require long-term medication. The cost of medicines will add to their financial burden, and some patients may not be able to afford the medicines they require. This could lead to a situation where patients stop taking their medication, which could have serious health consequences.
Patients who rely on life-saving drugs will be the worst affected by the increase in prices. These drugs are expensive, to begin with, and the increase in taxation will make them even more costly. The government needs to take steps to ensure that these drugs remain affordable to patients who need them.
The increase in taxation on medicines will have a negative impact on the pharma industry as well. The industry is already facing challenges due to the price control measures undertaken by the government. The increase in taxation will further add to the industry's woes.
Many pharmaceutical companies may have to increase the prices of their products to maintain their profit margins. This could lead to a situation where patients switch to cheaper alternatives, which could adversely affect the sales of higher-priced medicines. The pharma industry needs to find ways to keep the prices of their products competitive without compromising on quality.
The increase in prices of medicines due to the GST rollout is a cause for concern for patients and the pharma industry. The government needs to take steps to ensure that life-saving drugs remain affordable to patients who need them. The pharma industry needs to find ways to keep their prices competitive without compromising on quality. Overall, the GST rollout has had its ups and downs, and it is up to the government and the industry to find ways to mitigate the negative impact of the GST regime.
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