GST cut on key cancer drugs set to boost patient coverage, say experts

Move is part of ongoing initiatives to reduce financial burden for cancer patients

With rising cancer cases in India, the goods and services tax (GST) reduction on key cancer drugs is expected to improve patient access, say experts. The Centre has been implementing multiple measures to alleviate the financial burden of cancer treatment in India.

However, the drug industry has recommended extending such exemptions to all rare disease medications.

“We recommend extending these exemptions not only to all cancer medications but also to all rare disease medications. Such initiatives will make a significant difference in the lives of patients across India, enabling better treatment and improving overall health care outcomes,” said Anil Matai, director general of the Organisation of Pharmaceutical Producers of India, which represents multinational drug firms in India.

These innovative drugs are already quite expensive. For example, Enhertu (trastuzumab deruxtecan) costs Rs 18.7 lakh per 5 ml vial; Tagrisso (osimertinib) 40 mg tablets cost Rs 1.5 lakh per 10-tablet strip, and Imfinzi (durvalumab) 500 mg injection costs Rs 1.89 lakh for a 10 ml vial.

A spokesperson for AstraZeneca, which manufactures these drugs, said, “We are awaiting government notification, but given the reduction of GST from 12 per cent to 5 per cent, the MRP of specified cancer drugs will also decrease accordingly.”

The company said that it will work with its partners to ensure that patients benefit from this change.

Nuvama analysts said that AstraZeneca stands to benefit from the GST reduction on these cancer drugs, as demand is expected to increase. The Union Budget had already provided Customs duty exemptions for these drugs, the analysts added. AstraZeneca shares rose 1 per cent on the BSE on Tuesday.

Currently, generic (or copycat) versions of these drugs are not available in India.

With increasing cases of lung cancer in non-smokers, some of these drugs are crucial for patient treatment.

Dr Pritam Kataria, consultant, medical oncology at Sir HN Reliance Foundation Hospital, said that osimertinib is an important drug for lung cancer with EGFR mutations. “It is a wonder drug and can be used in a chemotherapy-free regimen for lung cancer, especially in post-operative situations to prevent recurrences.”

Doctors highlighted that these molecules are not available in generic form.

Dr Indoo Ambulkar, director of medical oncology at HCG Cancer Centre, Borivali, said, “These are innovator molecules, and generics are not available for them in India. Therefore, we depend on these innovator drugs for the treatment of advanced-stage cancers, making them very important. They offer newer treatment options with very good results, and in some cases, they are life-saving.”

“Many advanced-stage cancer patients will benefit from this GST reduction. Access to treatment will improve, particularly for advanced cases of breast cancer and lung cancer,” she added.

Cancer cases are on the rise. Dr Manisha Karmarkar, chief executive officer of DPU Super Specialty Hospital, Pimpri, Pune, highlighted that cancer is currently among the top five causes of death in India.

A considerable portion of these cases is due to the inability to afford medical expenses. India recorded roughly 1.49 million cancer cases in 2023, and estimates suggest a 12.8 per cent increase in annual cancer cases by 2025. This underscores the need for a robust system to combat the growing cancer burden, and the GST rate reduction is a crucial step in that direction.

In a major development for cancer patients across India, the GST Council announced on Monday a reduction in tax rates on essential cancer drugs. The Council decided to lower the GST rate from 12 per cent to 5 per cent on key cancer medications, including trastuzumab deruxtecan, osimertinib, and durvalumab.

This decision follows a series of measures targeted at reducing cancer treatment costs. In July 2023, the Council exempted dinutuximab, a drug for neuroblastoma, from GST.

Finance Minister Nirmala Sitharaman had announced the exemption of three crucial cancer treatment medicines from basic Customs duty in the Union Budget 2024. In March 2023, the government had exempted Keytruda, a drug for cervical cancer, from basic Customs duty.

A parliamentary panel had suggested in 2022 that GST on cancer medications be waived and that cancer be designated as a notifiable disease. This would require reporting cancer cases to the government, helping to map the severity and prevalence of cancer in the country.

Ambulkar noted that India is seeing more EGFR-positive lung cancers compared to Western countries.

“Among Asian countries, India has about 35 per cent positivity for EGFR-positive lung cancers where osimertinib will be used. Other cancers like renal cell carcinoma, hepatocellular carcinoma, and pancreatic biliary carcinoma use durvalumab for immunotherapy. This reduction will help us offer more patients these options, potentially reducing fatality rates,” she added.

Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance, which represents large pharmaceutical firms in India, said, “With the increasing burden of chronic diseases in India, this move towards making life-saving drugs more accessible is crucial. It builds on the Customs duty exemptions announced in the recent Budget and represents a step in the right direction.”