NPPA Flags Margin on Knee Implants
Average trade margins on knee systems for implants are as high as 300%, National Pharmaceutical Pricing Authority said on Friday. place on July1— more specifically, the underlying principle that any exemptions would weaken the efficacy of one of India’s biggest indirect tax reforms ever.
Medicines imported for personal use that were earlier exempt from customs duty, countervailing duty and special additional duty now attract GST. The government is charging12% Integrated GST on most Enzyme Replacement Therapy (ERT) drugs used to treat seven types of LSDs, which means a steep payment on even free medicines because the sticker price is very high.
More importantly, nearly 200 out of 600 patients with LSDs had been given drugs for free through charitable access programmes like the India Charitable Access Program (INCAP) by Sanofi Genzyme, according to the Lysosomal Storage Disorders Support Society (LSDSS), a group for patients with LSDs.
“My son’s medication will stop by next week and, if treatment isn’t restarted after that, he will have about two years to live,” Mangath said. He lost his daughter to Pompe in 2010 because she wasn’t diagnosed and treated in time. ERT drugs are used to correct the deficiency of enzymes, a particular kind of protein molecule in his body. Some patients with LSDs require this type of treatment to keep their symptoms in check.
“There are no exemptions for drugs under the GST regime,” said a finance ministry official. “GST works on the principle of minimal exemptions.” The official also pointed out that all life-saving drugs that were exempted under the previous regime have been put in the lowest rate bracket of 5%. Only those that faced tax in the previous regime have been put in the 12% bracket, he said. While life-saving medicines imported for personal use would continue to be exempt from basic customs duty, they are not exempt from IGST, according to Sandeep Chilana, partner, Shardul Amarchand Mangaldas. These medicines would attract either 5% or 12% IGST, he told ET. “My medicine would actually cost me .₹ 2 crore a year if I had to pay for it, but I get it for free through an access programme,” said Delhi-based Shashank Tyagi, 27, who has Gaucher’s disease and takes a pill by Genzyme everyday to prevent symptoms such as his spleen bloa- ting up. He may have to pay .₹ 2 lakh a month to get his medicines into the country, he said.
Already, ERT medicines from companies such as Sanofi Genzyme and Shire have stopped entering India since July, according to Manjit Singh, president, LSDSS. This is because 5% or 12% IGST would mean patients having to pay lakhs of rupees every month — money they don’t have, he said. ERT drugs become costlier as a patient gets older and heavier as the dosage increases, said Singh.
“I earn around .₹ 50,000 a month, I have a family of eight to take care of and a daughter to marry off in November,” said Greater Noidabased Ram Naresh Singh, 49, who was diagnosed in February with
Fabry, an LSD that he says makes him feel like his body is on fire.
Singh, who said he hasn’t been able to work for the last four months, was told in June that he was added to the thin list of patients eligible for free drugs from the access programme run by Sanofi Genzyme. He’s been making the rounds of the All India Institute of Medical Sciences (AIIMS) in Delhi ever since only to be told the medicines haven’t been imported yet because of the tax.
“I may be able to scrape together enough to pay the tax for a month, but how can I do this every time?” he said. Sanofi Genzyme said the tax was a burden for patients.
“With regards to IGST, the impact is not only on the Compassionate Free Drug Program but also on other life-saving drugs that are imported by patients for their personal use wherein they directly pay the overseas supplier for the drug. These patients will now have to bear this tax,” a Sanofi Genzyme spokesperson told ET.