How far has drug price regulation in India balanced affordability with industry viability and availability of medicines?

India regulates drug prices through the Drugs (Prices Control) Order (DPCO), 2013. The order is issued under Section 3 of the Essential Commodities Act, 1955, and the NPPA enforces it [1]. Since DPCO 2013 moved pricing from cost-based to market-based, India has struck this balance largely but not fully. Affordability has clearly improved and safeguards for viability exist, but weak enforcement and a temporary legal basis undermine both.

Affordability: clear gains

• Ceiling prices cover 933 formulations of essential (NLEM) medicines. They are revised every year in line with WPI under Para 16 [1].
• Trade Margin Rationalisation (TMR) was first tried in 2019 on 42 anti-cancer drugs. It cut the MRPs of 526 brands by up to 90% [2] and saved patients about ₹984 crore a year [1].
• In 2026, TMR was extended to 137 anti-cancer drugs, with revised MRPs for 543 brands. For example, Bevacizumab 100 mg falls from ₹21,767.70 to ₹5,930.13 [3].

Industry viability and availability: safeguards

• Non-scheduled drugs make up about 82% of market value. Companies set these prices freely, subject only to a 10% cap on annual increases [1].
• Their prices rose about 5.6% a year in 2020–25, against WPI inflation of 5.4%. Control is light-touch [1].
• To prevent stock-outs, NPPA allowed 50% price rises for drugs that had become unviable in 2019, 2021 and 2024 [1].
• TMR is targeted. Only about 4% of the non-scheduled market has markups above 100% [1].

Where the balance falls short

• Industry strain: MSME drug makers warn that capping margins will hurt rural trade generics. Pharma sector growth (9.9% a year) trailed nominal GDP growth (11.8%) [1].
• Weak enforcement: about 85% of ₹10,013.30 crore in overcharging demands is unrecovered. 280 of 345 court cases have been pending for 6 to more than 20 years [1].
• Temporary legal basis: TMR rests on the Para 19 emergency power. The Standing Committee called the delay in a permanent framework "inordinate" [1].
• Gaps in oversight: NPPA has no power to audit costs. Its price data leaves out hospitals and e-commerce, where cancer drugs are often bought [1].

Way forward

• Write TMR permanently into DPCO. Regulate mark-ups along the supply chain using a published method, as WHO recommends [4].
• Set up fast-track dispute settlement and a legal cell in NPPA, and fill its 15 vacant posts [1].

Indian drug pricing has moved from blunt cost controls to targeted tools that cut prices without driving medicines off the market. A permanent, transparent TMR framework with stronger enforcement would make this partial balance durable. That would serve the duty on public health in Article 47 and SDG 3.8's goal of affordable medicines for all.