GST Impact on Pharma Product Price – As the pharmaceutical industry was demanding to allow one-time price revision of the non-scheduled drugs after the implementation of GST, it is not accepted by the National Pharmaceutical Pricing authorise.
The pharma companies are strictly notified to follow the government rule of not exceeding hike in the price by 10% in the 12 months. Get to no more revise MRP rates of DPCO products with the effect of GST.
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Here are the impacts of GST on the Pharmaceutical drugs prices
As soon as the GST is applied by the government this is needed to be followed by the pharmaceutical companies all across the countries. GST rates which are notified by the government, here is how it will affect the price of formulations:
For Schedule Drugs
Here are is the impact of GST on the formulations which are scheduled
Presently the excise duty is levied on the MRP or the schedule formulations. The revised ceiling price of schedule formulation will be calculated by applying the factor of 0.95905 to the notified existing price after the application of GST.
On the other side, the schedule formulations on which there is no excise duty, there will no multiplication factor applicable. The ceiling price exclusive of GST will not alter the existing ceiling price of the formulations.
For Non Schedule Formulations
This is how the GST will affect the price of non-schedule drugs:
In non-schedule formulations the paragraph 20 of the DPCO, 2013 should be followed in which govt should monitor the MRP of the drugs. Also, ensure that no manufacture increase the maximum retail price of more than 10 %. The companies have to absorb the net increase.
Note: due to low rates of tax, the benefits will be given to the customers according to the anti-profiteering clause in the GST.