Govt tightens oversight on drugs that are outside direct price control

Mint

27-07-2025

New Delhi: To protect consumers from steep drug price increases, the National Pharmaceutical Pricing Authority (NPPA) has issued a directive to strictly enforce price control measures on non-scheduled drugs—those not subject to direct price caps.
This means manufacturers cannot raise the maximum retail price (MRP) of these non-scheduled medicines by more than 10% in a year, as per the Drugs Price Control Order (DPCO). These drugs account for about three-fourths of India's pharmaceutical market by volume.
NPPA has reiterated that companies must adhere strictly to paragraph 20 of the DPCO, 2013, which ensures that commonly used non-scheduled medicines and medical devices remain affordable for the public. Essential medicines are subject to stricter price controls.
Non-scheduled formulations are those that are out of direct price control. NPPA directs these brands to immediately report any price revisions on the NPPA'sIntegrated Pharmaceutical Database Management System (IPDMS).
Brands like Foracort, used to treat respiratory illnesses, Ascoril (a cough syrup), and Dexorange, used to treat nutritional deficiencies, are examples of non-scheduled formulations.
The regulator also cracked down on manufacturers selling the same non-scheduled formulation under different brand names. The directive said the MRP difference between such brands cannot exceed 10%, ensuring consistency in pricing across a company's portfolio.
'The government shall monitor the maximum retail prices (MRP) of all the drugs including the non-scheduled formulations and ensure that no manufacturer increases the maximum retail price of a drug more than 10% of maximum retail price during preceding twelve months and where the increase is beyond ten percent of maximum retail price, it shall reduce the same to the level of ten percent of maximum retail price for next twelve months,' said the NPPA communication issued to manufacturers, industry association and stakeholders on 22 July.
This renewed focus comes amid growing concerns over unchecked price hikes in commonly used medicines. While essential medicines have fixed ceiling prices, non-scheduled drugs—including many popular brands—remain outside direct controls but are still subject to the 10% annual cap.
'The move seeks to make healthcare more accessible and prevent manufacturers from excessive profiteering on a wide range of pharmaceutical products. Any violations will attract penalties for manufacturers,' said a pharma industry executive, requesting anonymity.
Queries sent to the department of pharmaceuticals remained unanswered till press time.
'This circular is primarily on monitoring the pricing of non-scheduled formulations. Our members are already abiding by paragraph 20 of DPCO 2013, and are complying with the provisions applicable to non-scheduled formulations,' said Viranchi Shah, national spokesperson, Indian Drugs Manufacturers Association (IDMA).
"This circular also has a directive to the manufacturers to align prices of multiple non-scheduled brands they manufacture or market. This may have operational issues when a contract manufacturer undertakes the manufacturing of different brands of different companies. We will seek further clarification," Shah added.
The NPPA said any manufacturer found violating the provisions will face action under the DPCO and the Essential Commodities Act.
'The manufacturer shall be liable to deposit the overcharged amount along with interest thereon from the date of increase in price in addition to the penalty,' it said.
According to government estimates, the Indian pharmaceutical market was valued at approximately $50 billion in FY2023-24, with domestic consumption accounting for $23.5 billion.
Notably, India is the world's largest provider of generic medicines by volume, with a 20% share of total global pharmaceutical exports. It is also the third largest by volume globally for overall pharmaceutical production.