Gene Therapy Gains GST Exemption: A New Hope for Patients
The Government of India has made a landmark decision by exempting gene therapy from Goods and Services Tax (GST), effective January 16, 2025. This exemption, announced by the Central Board of Indirect Taxes and Customs (CBIC), is expected to significantly reduce treatment costs for life-threatening diseases, making advanced therapies more accessible to patients across the country.
What Does the GST Exemption Mean?
Previously, gene therapy was subject to a 12% GST, adding a substantial financial burden on patients. With the introduction of Entry 105A in Notification No. 02/2017-Central Tax (Rate), this burden has been eliminated. As a result, cutting-edge treatments like CAR-T cell therapy for blood cancers—such as leukemia, lymphoma, and multiple myeloma—will now become more affordable for many.
This policy shift aligns with the government’s broader efforts to improve access to healthcare and address the high costs of critical treatments.
Focus on Rare Diseases and Duty Cuts
In addition to the GST exemption for gene therapy, the Union Budget 2025 is likely to propose customs duty reductions on imported medicines for cancer and rare diseases. This move could offer further financial relief to patients and families grappling with the exorbitant costs of these treatments.
The National Policy for Rare Diseases (NPRD)
The National Policy for Rare Diseases (NPRD), introduced in 2021, already provides a framework for addressing rare diseases in India. It currently lists 63 ailments, including:
- Spinal Muscular Atrophy (SMA)
- Duchenne Muscular Dystrophy (DMD)
- Familial Hypercholesterolemia
- Gaucher’s Disease
- Alkaptonuria (Black Urine Disease)
In March 2023, the government also fully exempted all drugs and special medical foods imported for personal use under the NPRD from basic customs duty. Typically, drugs attract a 10% duty, with some lifesaving drugs levied at a concessional rate of 5% or zero duty.
Budget 2025 Expectations
Healthcare leaders are now urging the government to extend these benefits by reducing custom duties on targeted therapies and increasing allocations for advanced treatments. These changes could further enhance affordability and accessibility for patients battling rare and critical illnesses.
The Bigger Picture
The exemption of GST on gene therapy and potential duty cuts in Budget 2025 signal a commitment to improving healthcare equity. With these measures, India is poised to bridge the gap between innovation and affordability, offering new hope to countless patients.