India’s Pharma Sector Gets A Boost With GST Cuts On Life-Saving Drugs

India’s pharmaceutical industry is witnessing a pivotal moment as the GST Council implements sweeping tax reforms aimed at improving healthcare affordability.

At its 56th meeting, the Council approved a new two-rate structure—5% for essential medicines and 18% for standard categories—while placing 36 critical life-saving drugs under a nil GST rate.

This move is set to enhance patient access to expensive therapies and support the growth of the pharmaceutical sector.

Suresh Nair, Tax Partner at EY India, called the reform ‘transformative for accessible healthcare’, noting that reduced tax burdens will directly benefit patients and boost uptake of critical medicines.

Major Relief for Patients with Cancer and Rare Diseases

The impact is particularly significant for therapies targeting cancer and rare diseases.

Treatments from global pharma giants like Roche, Novartis, Johnson & Johnson, Sanofi, Takeda, GSK, Amgen, and Bayer are now cheaper, improving their accessibility in India.

Roche’s therapies, such as Tecentriq, Gazyva, Rozlytrek, Evrysdi, and Hemlibra—previously priced out of reach for many—will now attract nil GST.

Novartis’s gene therapy Zolgensma, used to treat spinal muscular atrophy and priced at around ₹17 crore per dose, has seen a marked MRP reduction of over ₹11 lakh.

Similarly, Janssen’s Daratumumab, used in treating multiple myeloma, has seen a price drop of ₹4,700 per dose.

Roche Pharma India’s MD & CEO, Rajji Mehdwan, described the reform as ‘not just policy—it’s hope’.

Pharma Market Sees Robust Growth

The Indian Pharmaceutical Market (IPM) has already shown strong momentum, growing to ₹2.32 lakh crore in MAT August 2025, according to PharmaTrac.

Key therapy areas such as anti-diabetics, cardiac, and anti-neoplastics witnessed double-digit growth, with the latter surging by 19.7%—a clear indication of growing demand for cancer therapies, many of which are now more affordable.

“Reduced MRP along with patient support programmes will not just ease costs but also help onboard patients from weaker sections,” noted a PharmaTrac analyst.

However, the reforms come with challenges.

Dr Vivek Desai, MD of HOSMAC, warned that the 18% GST on input costs, combined with 5% or nil GST on final products, could squeeze manufacturer margins due to inverted tax credits.

Despite this, industry sentiment remains positive. Leading pharma companies like Sun Pharma, Cipla, and Intas reported strong double-digit value growth, reflecting confidence in the sector’s future.

With the revised GST rates taking effect from 22 September 2025, pharmaceutical companies are expected to recalibrate pricing strategies, expand access programmes, and explore growth in tier-2 and tier-3 cities.

The GST cuts mark a decisive step towards improving healthcare affordability and strengthening India’s position as a global pharmaceutical powerhouse.

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