NPPA asks pharma, medtech firms to cut prices after GST rate reduction

NPPA directs pharma and medical device makers to revise MRPs after GST cut to 5 per cent, while making relabelling of old stock voluntary subject to compliance

The National Pharmaceutical Pricing Authority (NPPA) has asked all manufacturers, marketing companies, and industry associations to pass on the benefits of a reduction in goods and services tax (GST) rates to consumers by cutting medicine prices.

 

This follows the Centre’s decision last week to reduce the GST rate from 12 per cent to 5 per cent.

 

“All manufacturers and marketing companies selling drugs and formulations shall revise the maximum retail price (MRP) of drugs, including medical devices, with effect from September 22, 2025,” the NPPA said in an office memorandum.

 

Manufacturers and marketers have also been asked to issue revised or supplementary price lists to dealers, state drug controllers, and the government, reflecting the revised GST and MRPs.

 

In a significant move, the pricing body has said that recalling, relabelling, or restickering of containers or packs already released in the market will not be mandatory. 

 

This exemption will apply if manufacturers ensure compliance at the retail level through revised price lists and sensitisation of retailers about the GST rate reduction using all communication channels.

 

Welcoming the step, Rajiv Nath, forum coordinator of the Association of Indian Medical Device Industry (AIMED), said the provision enforces compliance, promotes consumer transparency, and prevents wastage of packaging material while also safeguarding the industry against undue stock losses.

 

“The allowance to use existing packaging material by the Department of Consumer Affairs (DoCA) till December 31, 2025 is a cost-saving measure that will benefit micro, small and medium enterprises (MSMEs) and reduce unnecessary waste,” he added.

 

The NPPA had discussed these measures with several pharmaceutical and medical device industry associations.