Discuss the institutional framework for drug pricing in India. Why is a statutory, permanent TMR framework needed?

India regulates drug prices through executive instruments, not a dedicated pricing law. The National Pharmaceutical Pricing Authority (NPPA) was created by a Government Resolution in 1997 [1] and enforces the Drugs (Prices Control) Order (DPCO), 2013. The 2026 extension of Trade Margin Rationalisation (TMR) to 137 anti-cancer drugs shows how much this framework can do and how weak its legal base is.

Institutional framework

• Policy and law: The National Pharmaceutical Pricing Policy, 2012 led to DPCO 2013, the governing order [2].
• Regulator: NPPA is an attached office of the Department of Pharmaceuticals (Ministry of Chemicals & Fertilizers). It fixes, monitors and enforces prices [1].
• Scheduled drugs: The NLEM (prepared by MoHFW) forms Schedule-I. NPPA has fixed ceiling prices for 935 formulations, revised every year in line with WPI [2].
• Non-scheduled drugs: There is no ceiling price. Under Para 20, MRP may rise by at most 10% in 12 months [3]. TMR caps the margin added along the supply chain: 30% on 137 anti-cancer drugs, advised by a DGHS expert committee and notified under Para 19 [4].
• Enforcement and grievances: State Drug Controllers enforce prices on the ground [4]. Citizens complain through Pharma Sahi Daam, now integrated with Pharma Jan Samadhan [5].

Why TMR needs a statutory, permanent framework

• It rests on emergency powers: TMR uses Para 19's extraordinary powers, one notification at a time [4]. Any later order can withdraw it.
• The pilot never ended: The 2019 pilot covered 42 drugs [6]. In August 2026 a Standing Committee found no timeframe for making TMR a permanent part of DPCO 2013 [7].
• Coverage gap: Non-scheduled drugs make up 82% of the market [7]. The 10% cap slows price growth but leaves already-inflated starting prices untouched.
• Weak legal shield: A regulator without its own statute, using discretionary powers, is easy to challenge in court. ₹8,526 crore (85%) of overcharging demands is unrecovered, about 70% of it stuck in litigation [7].
• Certainty for everyone: Fixed rules give industry predictability and patients lasting relief. They also make it possible to extend TMR to more medicines in an orderly way.

India's framework pairs ceiling prices for essential medicines with margin caps for the rest, but the second tool still depends on discretion. TMR should be written into DPCO 2013 within a set deadline. It should be backed by fast-track dispute resolution and a dedicated legal cell in NPPA, as the Committee recommended [7]. That would turn a successful pilot into lasting policy, in line with Article 47 and SDG 3.8 on affordable medicines.