The Ministry of Chemicals and Fertilizers' Department of Pharmaceuticals provided a detailed explanation of India's medicine price regulation framework in response to a parliamentary query.

Price Regulation Mechanism

Drug prices are regulated under the Drugs (Prices Control) Order 2013 (DPCO, 2013), which is based on the principles of the National Pharmaceutical Pricing Policy, 2012. The National Pharmaceutical Pricing Authority (NPPA) fixes ceiling prices for formulations specified in Schedule-I of DPCO and determines retail prices for new drugs as defined under section 2(1)(u) of DPCO 2013. These prices are set based on market data and DPCO provisions, with ceiling prices applying to all manufacturers and retail prices applying specifically to applicant manufacturers and marketers.

Manufacturers have flexibility to sell scheduled drugs below the ceiling price and can fix different prices for the same schedule formulation under different brand names, provided they remain below NPPA's ceiling prices. For non-scheduled formulations, manufacturers can set prices but cannot increase the Maximum Retail Price (MRP) by more than 10% during any 12-month period.

Compliance and Monitoring

NPPA monitors compliance with DPCO 2013 provisions and takes action against overcharging and other violations. Monitoring occurs through multiple channels including Price Monitoring and Resource Units in states, State Drugs Controllers, market samples, market database reports, and public complaints. The order requires every manufacturer to print the maximum retail price on container labels, and no seller may charge consumers above the listed price.

Impact and Supplementary Initiatives

The price regulation framework, combined with other government healthcare initiatives, has significantly reduced out-of-pocket expenditure as a share of Total Health Expenditure from 62.6% in 2014-15 to 43.4% in 2022-23. Additional measures to improve medicine access include:

  • Pradhan Mantri Bhartiya Janaushadhi Pariyojana: Provides quality generic medicines through over 20,000 Janaushadhi Kendras at 50-80% discounts compared to branded medicines
  • Ayushman Bharat Pradhan Mantri Jan Arogya Yojana: Offers health insurance cover of ₹5 lakh per family per year for secondary/tertiary care hospitalization including medicines
  • Free Drugs Service Initiative: Makes essential medicines from the Indian Public Health Standards list available free of charge at public health facilities from PHCs to district hospitals
  • AMRIT Initiative: Provides affordable medicines for cancer, cardiovascular diseases, implants, and surgical disposables at up to 50% discount through hospital-based pharmacies
  • Rashtriya Arogya Nidhi: Provides financial assistance to below-poverty-line patients suffering from major life-threatening diseases including cancer

The information was provided by Minister of State for Chemicals and Fertilizers, Smt. Anupriya Patel, in a written reply to the Rajya Sabha on August 11, 2026.