The National Pharmaceutical Pricing Authority (NPPA) under the Department of Pharmaceuticals regulates drug prices as per 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), 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 as formulations launched by combining NLEM medicines with other drugs or changing strength/dosage.
Ceiling prices of scheduled medicines are revised annually based on Wholesale Price Index (WPI) for the preceding calendar year, with notified increases being the maximum permissible. The WPI figures for the last three years are: 0.00551% for April 1, 2024; 1.74028% for April 1, 2025; and 0.64956% for April 1, 2026. For non-scheduled formulations, manufacturers cannot increase maximum retail prices by more than 10% annually, though market data from June 2026 shows a weighted average annual price increase of only 6.94% over the past three years.
NPPA continuously monitors prices of both scheduled and non-scheduled formulations and takes action against companies found overcharging consumers under DPCO 2013 provisions.
The government also facilitates access to affordable medicines through several initiatives. The Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) offers quality medicines at 50-80% discounts compared to branded medicines through Jan Aushadhi Kendras. The AMRIT (Affordable Medicines and Reliable Implants for Treatment) initiative provides medicines for cancer, cardiovascular diseases, implants, and surgical disposables at up to 50% discount through hospital-based pharmacies. Additionally, the Free Drugs Service Initiative under National Health Mission makes essential medicines available 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. Quality monitoring data for the last three years shows: In 2023-24, 106,150 samples tested with 2,988 not of standard quality, 282 spurious/adulterated, and 604 prosecution cases; in 2024-25, 116,323 samples tested with 3,104 not of standard quality, 245 spurious/adulterated, and 961 prosecution cases; in 2025-26, 141,322 samples tested with 3,012 not of standard quality, 283 spurious/adulterated, and 779 prosecution cases (provisional). State authorities conduct periodic inspections and take enforcement actions including license suspension/cancellation and legal prosecution against violators.