Drug Price Control Order in India
What is the Drug Price Control Order in India?
The Drugs (Prices Control) Order, 2013 (DPCO 2013) is India's legal framework for controlling medicine prices. The Government notified it under the National Pharmaceutical Pricing Policy, 2012 and the Essential Commodities Act, 1955. The National Pharmaceutical Pricing Authority (NPPA), an attached office of the Department of Pharmaceuticals, administers it (PIB, 22 Jul 2022). Its stated aim is "to put in place a regulatory framework for pricing of drugs so as to ensure the availability of essential medicines at reasonable prices" (PIB, 22 Mar 2022).
Approach: I searched the NPPA ceiling-price lists and the NPPA DPCO 1995 bulk-drug list, which are in the datasets, and opened official Press Information Bureau releases. I couldn't open the DPCO 2013 text or its amendment page on NPPA's site, or the Department of Pharmaceuticals site. So I can't quote the Order paragraph by paragraph, apart from the provisions named below.
How it works
- Scheduled formulations (essential medicines).
- The First Schedule of DPCO 2013 is made up of the National List of Essential Medicines (NLEM). The Ministry of Health & Family Welfare notifies the NLEM; the current version is NLEM 2022.
- NPPA fixes a ceiling price for each scheduled formulation.
- Manufacturers of scheduled medicines, both branded and generic, "are required to sell their products within the ceiling price (plus applicable Goods and Service Tax)" (PIB, 7 Feb 2025).
- New drugs. NPPA fixes the retail price of a "new drug" as DPCO 2013 defines it. That price applies to the manufacturer and marketer who applied for it, and they must sell within it (PIB, 7 Feb 2025). About 2,023 new-drug retail prices had been fixed by July 2022 (PIB, 22 Jul 2022).
- Non-scheduled formulations. A manufacturer "is at liberty to fix" the maximum retail price (MRP). It must not raise the MRP by more than 10% of the MRP during the preceding 12 months (PIB, 7 Feb 2025). NPPA monitors this (PIB, 22 Mar 2022).
- Price controls in the public interest. In certain circumstances a ceiling price "may also be fixed" in the public interest (PIB, 7 Feb 2025). Examples:
- ceiling prices for orthopaedic knee implants, fixed under Para 19 of DPCO 2013;
- trade-margin caps on 42 non-scheduled anti-cancer medicines;
- price regulation of devices such as oxygen concentrators, pulse oximeters and glucometers (PIB, 22 Jul 2022).
Ceiling-price examples from the NPPA lists
- NPPA's category lists cover anti-cancer, anti-diabetes, anti-HIV, anti-TB and cardiovascular formulations. For example, glimepiride 2 mg tablet is listed at ₹5.94 per tablet [1].
- NPPA has fixed ceiling prices for 131 scheduled anti-cancer formulations under NLEM 2022 (PIB, 7 Feb 2025).
The earlier Order (DPCO 1995) NPPA still publishes a "List of Bulk Drugs Under DPCO 1995" of 76 numbered entries. Some carry the footnote "deleted vide so 626(E) dated 2.9.97", for example sulphamethoxazole (No. 1) [2] and amikacin sulphate (No. 56) [3].
Amendments DPCO 2013 has been amended several times. For example, the Department of Pharmaceuticals lists Gazette Notification S.O. 2165(E), which amends Paras 5 and 18 on pricing of off-patent drugs. I couldn't open the notification itself or NPPA's consolidated text. Other figures sometimes cited for the Order, such as the retailer margin and the annual index-linked revision of ceiling prices, therefore couldn't be confirmed from the official text this time. The official copy is on NPPA's DPCO 2013 page.
I can look up the NPPA ceiling price for a specific formulation if you name it.
How did it replace the older bulk drug price controls?
DPCO 2013 replaced the DPCO 1995 controls in two main ways. It moved control off bulk drugs (APIs) and their formulations onto formulations only, chosen by essentiality (the NLEM). It also dropped cost-based pricing in favour of market-based pricing. Under National Pharmaceutical Pricing Policy (NPPP) 2012, "the prices of formulations only are to be regulated and not the prices of the Bulk Drugs and the resulting formulations as adopted in the Drug Policy 1994" (NPPA newsletter, Dec 2024, p. 2).
Approach: I searched NPPA's list of bulk drugs under DPCO 1995 and NPPA's price compendia, then read the Government's December 2013 year-end review on PIB and NPPA's December 2024 newsletter. I couldn't open the text of DPCO 2013 or NPPA's drug-pricing FAQ. So I can't quote DPCO 2013's own repeal or transitional provisions for DPCO 1995.
What changed
| DPCO 1995 (Drug Policy 1994) | DPCO 2013 (NPPP 2012) | |
|---|---|---|
| What is controlled | Bulk drugs and the formulations made from them (NPPA newsletter, p. 2) | Formulations only (same) |
| How the scope is set | A list of named bulk drugs. NPPA's list has 76 entries, from sulphamethoxazole (No. 1) [2] to mefenamic acid (No. 76) [4] | Essentiality: NLEM 2011, 2015 and 2022 have been incorporated as the First Schedule (NPPA newsletter, p. 2) |
| Pricing method | "All the previous DPCOs, 1970, 1979, 1987 and 1995 were based on cost to manufacturers with post manufacturing expenses" (PIB, 19 Dec 2013) | Market-based pricing: the average price to retailer (PTR) of brands with a market share of at least 1% of total market turnover, plus a 16% retailer margin (PIB, 19 Dec 2013) |
Timeline and handover
- 7 December 2012: NPPP 2012 notified. It provides for regulating the prices of "formulations only identified on the basis of essentiality." It changed the basis for ceiling prices "from cost based to Market Based Pricing (MBP)" (PIB, 19 Dec 2013).
- 15 May 2013: DPCO 2013 came into force under the Essential Commodities Act, 1955 (NPPA newsletter, p. 2). In its first year it brought 348 drugs, covering about 652 formulations, under price control (PIB, 19 Dec 2013).
- The 1995 Order did not disappear overnight. In December 2013 the Government said NPPA "continues to be delegated with the powers to exercise the functions of the Central Government in respect of various paragraphs of the DPCO, 1995 and DPCO, 2013." At that point NPPA's listed functions still included "fixation and revision of prices of scheduled bulk drugs and formulations" (PIB, 19 Dec 2013). By 2024, NPPA described its role as fixing and revising prices of "scheduled formulations" (NPPA newsletter, p. 2). NPPA's Authority meetings are also counted separately: 260 overall by 31 December 2024, of which 128 were under DPCO 2013 (p. 5).
- Reviews: under DPCO 2013, review powers sit with the Government (Para 31) (PIB, 19 Dec 2013).
About the DPCO 1995 list, and a fix to my last answer NPPA's page "List of Bulk Drugs Under DPCO 1995" (last updated 5 September 2018) carries one footnote, "* – deleted vide so 626(E) dated 2.9.97". The asterisk appears against only two entries: No. 56 amikacin sulphate [3] and No. 76 mefenamic acid [4]. My previous answer was wrong to give sulphamethoxazole (No. 1) as an example of a deleted entry; it carries no asterisk.
If you want, I can check whether a particular old DPCO 1995 bulk drug now appears as an NLEM-scheduled formulation in NPPA's current ceiling-price lists.
How do scheduled and non-scheduled formulations differ?
The difference is whether the formulation is listed in Schedule I of DPCO 2013. A scheduled formulation is listed there, and NPPA fixes a ceiling price for it that every manufacturer must sell within. A non-scheduled formulation is not listed: the manufacturer sets its own maximum retail price (MRP) but can raise it by no more than 10% in any 12 months. The Government says plainly that "both schedule and non-schedule drugs are covered under DPCO, 2013" (PIB, 30 Jul 2024).
Approach: I searched NPPA's ceiling-price lists and price compendia, which hold prices but not the rules, and then read two official Press Information Bureau releases. I couldn't open NPPA's consolidated DPCO 2013 text, so the paragraph numbers below are as the Government's releases give them, not read from the Order itself.
| Scheduled formulation | Non-scheduled formulation | |
|---|---|---|
| Definition | Listed in Schedule I, defined at "section 2(1)(zb)" of DPCO 2013 (PIB, 30 Jul 2024) | "Not included in Schedule – I", defined at Para 2(1)(v) (same) |
| What decides scope | Schedule I is the National List of Essential Medicines (NLEM) 2022, notified by the Department of Health and Family Welfare (PIB, 7 Feb 2025) | Any formulation not in Schedule I |
| Who sets the price | NPPA fixes a ceiling price. Manufacturers, "both branded and generic", "are required to sell their products within the ceiling price (plus applicable Goods and Service Tax)" (PIB, 7 Feb 2025) | The manufacturer "is at liberty to fix the maximum retail price (MRP) of drugs launched by it" (same) |
| Price increases | Ceiling prices are revised every year in line with the Wholesale Price Index (WPI, all commodities) for the preceding calendar year. NPPA revises them on or before 1 April, and the Government notifies them on 1 April (PIB, 30 Jul 2024) | Under Para 20, "no manufacturers can increase Maximum Retail Price (MRP) by more than 10% of MRP during preceding 12 months" (same) |
| Enforcement | NPPA monitors both categories. Companies found selling above the permitted price must repay the overcharged amount; Rs. 72.73 crore was recovered in FY 2023-24 (PIB, 30 Jul 2024) | Same |
Points that apply to both
- Taking the full increase is optional. The maximum permitted increase for either category "may or may not be availed" by manufacturers, depending on commercial considerations (PIB, 30 Jul 2024).
- Non-scheduled drugs can still be capped in the public interest. A ceiling price "may also be fixed under certain circumstances, in public interest." For example, NPPA capped the trade margin at 30% on 42 non-scheduled anti-cancer medicines, which cut the MRP of 526 brands by about 50% on average (PIB, 7 Feb 2025).
- New drugs are a third route. NPPA fixes the retail price of a "new drug" as DPCO 2013 defines it. That price applies to the manufacturer and marketer who applied for it (PIB, 7 Feb 2025).
Examples of scheduled ceiling prices (NPPA anti-diabetes list)
- Metformin tablet 500 mg: ₹2.07 per tablet [5]
- Metformin modified-release tablet 1000 mg: ₹4.15 per tablet [6]
- Teneligliptin tablet 20 mg: ₹11.35 per tablet [7]
A brand of a non-scheduled formulation has no NPPA-listed ceiling price. Its limit is the 10% annual cap on its own MRP.
I can check whether a particular formulation appears in NPPA's ceiling-price lists if you name it.