Govt Directs Pharma Firms to Revise MRPs of Medicines and Medical Devices Following GST Rate Cut
The Government of India, through the National Pharmaceutical Pricing Authority (NPPA), has recently issued instructions following the decision taken in the 56th GST Council meeting, wherein the council proposed a reduction in GST rates on drugs/formulations (including medical devices) effective from September 22, 2025. After this announcement, many manufacturers, marketing companies, and industry associations requested guidance on how to implement the changes.
In this regard, the National Pharmaceutical Pricing Authority (NPPA) has provided clear directions:
- All companies are directed to ensure that the benefit of GST reduction reaches consumers and patients effectively from September 22, 2025.
- All the manufacturers/marketing companies selling drugs/formulations have been instructed to change the Maximum Retail Price (MRP) on their products based on the GST cuts, effective from September 22, 2025.
- All manufacturer/marketing companies have been asked to issue a revised price list or supplementary price list in Form V/VI to the dealers, retailers, State Drug Controllers and the Government. Additionally, they must ensure the list is clearly displaying the updated GST rates and MRP.
- Manufacturers/marketing companies must also inform the dealers, retailers, and consumers about the recent changes made to the GST rates and the resulting reduction in MRP, which they are not aware of. This should be done using all possible communication methods, like electronic media, print media, and social media. Industry associations are also encouraged to run advertisements in major newspapers (including local language papers) to spread awareness and ensure that everyone complies with the new pricing rules.
- The government has clarified that the companies are not required to recall, relabel, or resticker products that already existed in the market before September 22, 2025. As long as companies can ensure that retailers are selling these older stock items at the new, lower price, no changes to the product packaging are necessary.
- However, if companies choose to relabel or resticker existing stock, they can do it gradually. This phased approach should ensure that there is no shortage of drugs or medical devices in the market. The Central Drugs Standard Control Organisation (CDSCO) had already issued the needed instructions for this on September 11, 2025, under Rule 104A of the Drugs and Cosmetics Rules, 1945.
Refer to the official instructions for complete information.
