NEW DELHI: In a major relief for the pharma sector, the government has dismissed the mandatory rule for drug manufacturers to recall, or re-label medicines already released in the market before September 22, the Department of Pharmaceuticals said.
This follows the latest revision in Goods and Services Tax (GST) rates early this month by the GST Council, which reduced the GST on medical devices to 5 per cent from 12 per cent.
The National Pharmaceutical Pricing Authority (NPPA), in an Office Memorandum, clarified that companies can instead comply by ensuring revised pricing is reflected at the retailer level.
“All manufacturers/ marketing companies selling drugs/ formulations shall revise the Maximum Retail Price (MRP) of drugs/formulations (including medical devices). The manufacturers/ marketing companies shall issue a revised price list or supplementary price list to dealers and retailers for display to consumers, and to State Drug Controllers and the Government, reflecting the revised GST rates and revised MRP, ” the NPPA said.
“Recalling, re-labelling, or re-stickering on the label of a container or pack of stocks released in the market prior to September 22, 2025, is not mandatory, if manufacturer/ marketing companies are able to ensure price compliance at the retailer level, ” according to the FAQs issued by the Finance Ministry.
The pharmaceutical industry had earlier expressed concerns over the practical challenges and costs of recalling and re-labelling medicines already in circulation.
The new decision to permit revised price lists instead is expected to reduce disruptions in the supply chain, ensuring that patients do not face shortages of essential medicines due to technical labelling requirements.
Retailers will now be responsible for displaying the updated price lists, enabling consumers to access medicines at the revised rates without confusion.
Meanwhile, the Association of Indian Medical Device Industry (AiMeD) has submitted recommendations to the Union Finance Minister and GST Council Chairperson Nirmala Sitharaman, seeking balance GST reforms.
AiMeD emphasised that additional reforms are critical to address persisting challenges such as working capital stress, inverted duty structures, and restricted refund eligibility.