Even though it has been a few days since the implementation of the Goods and Services Tax in India, the country’s pharmaceutical industry has been adversely affected as some traders in their supply chain were yet to comply with norms of the new regime before the implementation.
The Bengaluru-based Biotech giant, Biocon’s Chairman and Managing Director ,Kiran Mazumdar-Shaw had cautioned of a possible drug shortage after implementation of GST days before it was rolled out, saying unprepared stockists in the supply chain were refusing to stock medicines.
She said that although the GST was a path-breaking reform, the manner in which it was launched was cumbersome with pharmaceutical firms taking a huge hit on their businesses in June as a result of pharmacists declining to keep stock.
“Our stockists are refusing to stock, the supply chain is also not willing to accept material. I think bigger impact is the drug shortage that patients are going to face and then we are going to have huge impact on price of drug.” Mazumdar-Shaw told television channel CNBCTV18 while commenting on the fallout and added that in case of shortage, there was going to be black marketing of drugs and was a worrying
sign.While Biocon’s business is very small in domestic market but those pharma companies which are totally dependent on domestic market are seriously impacted, Mazumdar-Shaw said.
She also lashed out at the GST in its current form saying it has been made into a multiple and complex tax regime and criticised the panel responsible for doing “a suboptimal job of delivering a game changing GST regime”.
