The National Pharmaceutical Pricing Authority (NPPA) under the Department of Pharmaceuticals regulates drug prices under the Drugs (Prices Control) Order 2013 (DPCO, 2013). As of July 23, 2026, ceiling prices are effective for 935 formulations based on the National List of Essential Medicines (NLEM) published by the Ministry of Health and Family Welfare, with an average price reduction of approximately 17% due to refixation under NLEM 2022. Additionally, NPPA has fixed retail prices for 3,845 new drugs defined under para 2(1)(u) of DPCO 2013, which includes formulations launched by combining with another drug or changing strength/dosage of NLEM medicines.
Ceiling prices of scheduled medicines are revised annually based on Wholesale Price Index (WPI) for the preceding calendar year, with maximum permissible increases notified on April 1 each year. The WPI figures for the last three years were 0.00551% (April 1, 2024), 1.74028% (April 1, 2025), and 0.64956% (April 1, 2026). For non-scheduled formulations, manufacturers cannot increase maximum retail price (MRP) by more than 10% over the preceding 12 months. Market data from Pharmarack for June 2026 shows the weighted average annual price increase in non-scheduled drugs over the last three years was 6.94%, below the permissible 10% limit.
NPPA monitors prices of both scheduled and non-scheduled formulations continuously and takes action against companies found overcharging consumers under DPCO 2013 provisions. The government also facilitates access to affordable medicines through Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), offering quality medicines at 50-80% lower prices than branded medicines through Jan Aushadhi Kendras. The AMRIT initiative provides affordable medicines for cancer, cardiovascular diseases, implants, and consumables at up to 50% discount through AMRIT Pharmacy stores in hospitals. The Free Drugs Service Initiative under National Health Mission provides essential medicines free of charge at public health facilities from Primary Health Centres to district hospitals.
Drug manufacturing, sale, and distribution are regulated under the Drugs and Cosmetics Act, 1940 and Rules, 1945 through State Licensing Authorities appointed by respective State Governments. Quality monitoring data for the last three years shows: in 2023-24, 2,988 of 106,150 tested samples were declared not of standard quality, with 282 spurious/adulterated and 604 prosecution cases; in 2024-25, 3,104 of 116,323 tested samples were not of standard quality, with 245 spurious/adulterated and 961 prosecution cases; in 2025-26, 3,012 of 141,322 tested samples were not of standard quality, with 283 spurious/adulterated and 779 prosecution cases (provisional). State Licensing Authorities conduct periodic inspections and take actions including license suspension, cancellation, and court prosecutions against non-compliant firms.