GST impact: Are drug-makers running out of medicines?

New Delhi: While we all wait with bated breath for the rollout of goods and services tax (GST) Friday midnight, there are reports about shortages of medicines in the coming days.

As per a report in TOI, although the All India Organisation of Chemists and Druggists has assured the government that supply of drugs will remain uninterrupted, pharmaceutical industry fears that there may be a temporary shortage of medicines as over 20,000 traders across the country are yet to adhere to the new GST norms.

“Many stockists and retail chains, especially those in small and rural regions, do not even have a GST number in place. We are anticipating some shortages and problems at least for first few months before things settle down,” a senior industry executive with a leading pharma company was quoted as saying by TOI.

Sources said the industry has also witnessed a reduction in inventories since May-end, as distributors and retailers tried to minimise losses due to change in tax structure.

It is said that under the new GST regime, most medicines will be taxed at 12%, while essential drugs, including, insulin will be taxed at 5%.

Earlier this week, the National Pharmaceutical Pricing Authority (NPPA), had announced provisional ceiling prices of 761 medicines, including anti-cancer, HIV, diabetes and antibiotics to facilitate smooth implementation of GST for companies.

As per the provisional list, ceiling price of various cancer drugs like Bortezomib, Docetaxel and Gemcitabine have been reduced.