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DoP asks companies to revise MRP of drugs on which GST rates have been reduced
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Shardul Nautiyal, Mumbai
June 17 , 2021
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The Department of Pharmaceuticals (DoP) has directed all the manufacturers and marketing companies to revise the maximum retail price (MRP) of drugs or formulations on which Goods and Services Tax (GST) has been reduced taking into effect the revised rates of GST.
Drugs Controller General India (DCGI) and State Drug Controllers (SDCs) have also been apprised about the same and directed to enforce the compliance on the same.
Recalling or re-labelling or re-stickering on the label of container or pack of released stocks in the market prior to date of notifications, is not mandatory, if manufacturers are able to ensure price compliance at the retailer level through issuance of a revised price list, as per an Office Order from DoP.
The move comes in the wake of queries from some of the manufacturers and marketing companies regarding implementation of MRP on the drugs due to change in the Tax/GST rates.
As per the DoP order, “In this regard, reference is invited to the O.M. No. 25(5)/2014/Div-V/NPPA dated April 13, 2016 issued by the National Pharmaceutical Pricing Authority (NPPA) which contains detailed guidelines for compliance of revised prices by manufacturers or marketing companies. The change in Tax/GST rates has an impact on the fixation of MRP of items attracting Tax/GST. As per Drugs Price Control Order (DPCO) - 2013 MRP of drugs/formulations is inclusive of Taxes/GST. Therefore, any downward change in Tax/GST rates should be reflected in MRP and benefit of Tax/GST reduction should be passed on to consumers.”
The GST Council recently waived tax rates on black fungus amphotericin and reduced rates on several other Covid-related drugs, ventilators, testing kits and others. These revised rates are valid till September end as against the earlier August end.
GST on black fungus drug amphotericin B has been slashed to nil from 5 per cent along with tocilizumab. The Council decided to go ahead with the recommendations made by the Group of Ministers (GoM) in their report to bring down the rates in the wake of the spread of the deadly black fungus.
India has reported over 28,200 cases of the deadly fungal infection known as mucormycosis in a growing epidemic of the disease. From 28 states, 28,252 cases of mucormycosis are reported. Of these, 86%, or 24,370 cases, have a history of Covid-19 and 62.3%, or 17,601, have a history of diabetes. The difficult to treat condition is also facing the challenging of drug cost.
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