GST reduction from 12% to 5% to lower costs of key cancer drugs

In a move that will provide financial relief to cancer patients across India, the 54th GST Council chaired by Union Finance Minister Nirmala Sitharaman announced on Monday a reduction in the Goods and Services Tax (GST) on specific cancer drugs from 12% to 5%.

The drugs are primarily manufactured by AstraZeneca plc and supplied in India by its subsidiary, AstraZeneca Pharma India Limited, based in Bengaluru.

Trastuzumab Deruxtecan, branded as Enhertu and developed by Daiichi Sankyo and AstraZeneca, is used for treating breast and stomach cancers. It targets cells with a protein called HER2 and combines targeted therapy with chemotherapy to treat cancer cells directly.

Osimertinib, known as Tagrisso and produced by AstraZeneca, is a therapy for non-small cell lung cancer, particularly effective for patients with specific genetic mutations. It targets these mutations to slow the progression of the disease.

Similarly, Durvalumab, marketed as Imfinzi and also made by AstraZeneca, works by boosting the immune system’s ability to recognise and fight cancer cells. It is used for treating lung and bladder cancers.

India has a significant burden of these cancers. According to the National Cancer Registry Programme (NCRP) of the Indian Council of Medical Research (ICMR) 2023, breast cancer affects approximately 230,000 individuals annually, while stomach cancer sees about 120,000 new cases each year. Non-small cell lung cancer (NSCLC) impacts around 110,000 people annually, and bladder cancer affects approximately 120,000 individuals each year.

According to market estimates, the daily cost of these cancer drugs in India is approximately ₹6,333 for Trastuzumab Deruxtecan (Enhertu), ₹6,000 for Osimertinib (Tagrisso), and ₹5,000 for Durvalumab (Imfinzi). The reduction in GST rates aims to ease the financial burden of these high-cost treatments. This tax adjustment is part of the government’s broader effort to improve healthcare accessibility and support patients in need, according to government officials.
Healthcare professionals and industry experts have welcomed the move, noting its tangible benefits for those battling severe diseases. 

“The reduction in GST is a significant step towards making cancer treatment more affordable and accessible. The high cost of cancer medications has been a major hurdle for many patients. This move aligns with our mission to ensure that every patient has access to world-class cancer care without the burden of high costs,” D. S. Negi, CEO of Rajiv Gandhi Cancer Institute & Research Centre (RGCIRC), said.

“It will help reduce the financial burden on cancer patients and their families, especially those undergoing treatment with expensive treatments like Trastuzumab, Pembrolizumab, and Durvalumab,” he added.

The decision follows the Finance Minister's announcement in the Union Budget 2024-25, which exempted Trastuzumab Deruxtecan, Osimertinib, and Durvalumab from customs duties. Customs duty is a tax on goods transported across international borders, aimed at generating revenue, protecting domestic industries, and regulating trade.

Sudarshan Jain, Secretary General of the Indian Pharmaceutical Alliance, stated, “We welcome the GST Council’s decision to lower GST on cancer drugs to 5%. With the increasing burden of chronic diseases in India, this move makes life-saving drugs more accessible and improves health outcomes.”