GST makes ‘orphan drugs’ prices soar

Drugs & Pharmaceuticals Services (Medicine services) under GST

MUMBAI: Prices of exorbitantly-priced life-saving medicines, used to treat rare diseases have increased by 12%, with implementation of Goods and Services Tax, resulting in skyrocketing bills and leaving many patients in the lurch.

These high-value ‘orphan’ drugs used in bone marrow transplant, classical Hodgkin Lymphoma, Crohn’s disease and melanoma, prescribed usually lifelong with certain treatment running into crores, have now been burdened with the 12% additional levy, which was nil before July.

While no specific details are available, the market size is estimated between Rs 50-60 crore, with 100-odd life-saving drugs imported to treat rare diseases mainly genetic disorders, that affect a small percentage of population.

According to Rare Diseases and Disorders — Research, Resource & Repository of South Asia, 2011, there are over seven crore patients suffering from these diseases in India. As against this, GST impact on drugs sold in the country has largely been neutral, with no significant increase in prices as domestic companies absorbed the increased tax liability of around 2.29%.

According to guidelines, patients can import these lifesaving medicines (for personal use) which are not approved in India, by applying for an import permit and custom duty exemption. In addition to the 12% levy, patients need to cough up the freight cost of 200 euros for normal and 650 euros for cold chain shipment of drugs being imported.

Often debilitating lifelong disease or disorder condition with a prevalence of 1or less, per 1000 population is defined by the WHO as a rare disease. Considering the sheer number of identified rare and ultra rare diseases and their varying prevalence, it becomes nearly impossible to ascertain the total number of rare (and ultra rare) disease patients in the world, experts pointed out.

“In most cases, the import quantity is not available, but the burden of additional 12% is high, when the patient has to take the medicine lifelong,” says Praveen Sikri of Ikris Pharma Network, a firm which connects patients with overseas suppliers.

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