The government has said that drug prices in India are regulated under the provisions of the Drugs (Prices Control) Order, 2013 (DPCO, 2013), with the National Pharmaceutical Pricing Authority (NPPA) monitoring and controlling prices of essential medicines to ensure affordability.
According to the Department of Pharmaceuticals, NPPA fixes ceiling prices of medicines included in Schedule-I of DPCO, which is based on the National List of Essential Medicines (NLEM) notified by the Ministry of Health and Family Welfare. As of July 23, 2026, ceiling prices for 935 formulations were in effect. Following the implementation of NLEM 2022, the average reduction in medicine prices due to price refixation has been around 17%.
NPPA also regulates retail prices of new drugs introduced through changes in dosage, strength, or combinations of medicines listed in the NLEM. Till July 23, 2026, retail prices of 3,845 new drugs had been fixed by the authority.
The government noted that prices of scheduled medicines can be revised annually based on the Wholesale Price Index (WPI). The notified increase represents the maximum permissible price hike for a given year. For non-scheduled medicines, manufacturers are not allowed to raise the Maximum Retail Price (MRP) by more than 10% over the preceding 12 months.
However, market data from Pharmarack for June 2026 shows that the weighted average annual increase in prices of non-scheduled medicines over the last three years was 6.94%, which remains below the permitted limit.
NPPA continuously monitors prices of both scheduled and non-scheduled formulations and takes action against companies found overcharging consumers, in accordance with the provisions of DPCO, 2013.
The government also highlighted several initiatives aimed at improving access to affordable medicines. Under the Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), medicines are available through Jan Aushadhi Kendras at prices typically 50% to 80% lower than branded alternatives. Additionally, the AMRIT initiative provides medicines, implants and consumables at discounts of up to 50% through dedicated pharmacy outlets in hospitals. Essential medicines are also supplied free of cost at public health facilities under the National Health Mission’s Free Drugs Service Initiative.
On drug quality and regulation, the Ministry of Health and Family Welfare stated that the manufacture, sale and distribution of medicines are governed by the Drugs and Cosmetics Act, 1940 and associated rules. State Licensing Authorities are responsible for issuing licences, conducting inspections, and taking action against violators, including suspension or cancellation of licences and prosecution where necessary.
The information was provided by Minister of State for Chemicals and Fertilizers Anupriya Patel in a written reply in the Lok Sabha.
