**Executive Summary**
This report outlines the measures taken by the National Pharmaceutical Pricing Authority (NPPA) and the Department of Pharmaceuticals to ensure medicine affordability in India. It details price controls on scheduled and non-scheduled formulations as of March 18, 2026, and explains the legal safeguards within the Patents Act, 1970. The document emphasizes the balance between protecting pharmaceutical innovation and ensuring public access to essential healthcare.
**Key Points / Main Content**
**Drug Price Regulation**
* **Ceiling Prices:** The NPPA has fixed ceiling prices for 935 formulations listed in Schedule-I of the DPCO, 2013; all manufacturers and importers must adhere to these limits.
* **New Drugs:** Retail prices have been fixed for 3,702 new drugs as defined under the DPCO.
* **Price Increase Caps:** For non-scheduled formulations, manufacturers are prohibited from increasing the Maximum Retail Price (MRP) by more than 10% within any 12-month period.
* **Emergency Provisions:** Under Para 19 of the DPCO, the NPPA regulates prices in extraordinary circumstances, which has previously included capping prices for coronary stents, knee implants, and COVID-19 medical devices.
* **Trade Margin Rationalization (TMR):** This approach was used to reduce the prices of 526 brands of anti-cancer medicines and various medical devices like oxygen concentrators and pulse oximeters.
**Patent Act Safeguards**
* **Scrutiny and Opposition:** Patent applications undergo a two-stage technical and legal scrutiny. Stakeholders can file pre-grant or post-grant (within one year) oppositions to challenge novelty or inventive steps.
* **Prevention of Evergreening:** Section 3(d) restricts patenting new forms of known substances unless they show significantly enhanced therapeutic efficacy, preventing unjustified extensions of patent monopolies.
* **Compulsory Licensing (CL):** Under Section 84, the government can grant compulsory licenses if a patented invention is not available at an affordable price or is not being "worked" in India.
* **Adjudication:** Disputes regarding patent rights (Section 48) are handled by competent courts to balance the interests of innovators and generic manufacturers.
**Impact Analysis**
**Pharmaceutical Manufacturers, Marketers, and Importers**
**Impact**
They are strictly regulated regarding the pricing of both scheduled and non-scheduled drugs. They face legal consequences for overcharging or exceeding the 10% annual price increase limit for non-scheduled medicines.
**Action Required**
Must ensure all products are sold within NPPA-fixed ceiling prices and monitor MRP adjustments to remain within the statutory 10% annual limit.
**Innovator Pharmaceutical Companies**
**Impact**
While granted exclusive rights under Section 48, their ability to extend patent terms through minor modifications is limited by Section 3(d). They are also subject to potential Compulsory Licensing if their products are deemed unaffordable.
**Action Required**
Must provide evidence of enhanced therapeutic efficacy for new formulations and ensure patented products are available in the Indian market at reasonable prices.
**Generic Manufacturers**
**Impact**
The legal framework provides them with opportunities to challenge weak or frivolous patents through the opposition framework and potentially manufacture patented drugs under Compulsory Licensing.
**Action Required**
Utilize the two-stage scrutiny and opposition provisions (Section 25) to contest patents that do not meet statutory requirements.
**National Pharmaceutical Pricing Authority (NPPA)**
**Impact**
Acts as the primary monitoring body for drug pricing and overcharging instances in India.
**Action Required**
Continue monitoring drug prices and update the NPPA website with revised pricing details as per DPCO, 2013 provisions.
Key Entities Referenced
National Pharmaceutical Pricing Authority (NPPA): The regulatory body responsible for fixing ceiling prices of scheduled formulations and monitoring medicine prices in India.
Drugs (Prices Control) Order (DPCO), 2013: The primary legal framework that empowers the NPPA to regulate medicine prices and ensure availability at affordable rates.
Patents Act, 1970: The legislation governing patent rights and safeguards, including compulsory licensing and patentability criteria to balance innovator and generic interests.
Trade Margin Rationalization: A policy approach used to cap margins and lower the prices of anti-cancer medicines and medical devices like oxygen concentrators.
Department for Promotion of Industry & Internal Trade (DPIIT): The government department responsible for providing safeguards under the Patents Act to ensure access to affordable medicines.
Ministry of Chemicals and Fertilizers :
Department of Pharmaceuticals
Affordability of Medicines
Posted On: 20 MAR 2026 2:58PM by PIB Delhi
The National Pharmaceutical Pricing Authority (NPPA) regulates the prices of medicines as per extant
provisions of DPCO, 2013. NPPA fixes the ceiling prices of formulations specified in Schedule-I to
DPCO, 2013. All manufacturers, marketers and importers of scheduled medicines are required to sell their
products within such ceiling price (plus applicable local taxes). As on 18.3.2026, Ceiling prices of 935
formulations are effective.
NPPA also fixes retail prices of new drugs as defined in para 2(1)(u) of DPCO, 2013. As on 18.3.2026,
Retail prices of 3,702 new drugs are fixed. Further, in case of non-scheduled formulations, manufacturers
are required to not increase their maximum retail price (MRP) of a formulation by more than ten percent
of the MRP of that formulation during the preceding 12 months. In addition, NPPA also fixes the prices of
drugs under Para 19 of the DPCO, 2013 in case of extra-ordinary circumstances and in public interest to
ensure the availability of drugs at affordable prices which, inter alia, include the following:
i. MRP of 106 non-scheduled anti-diabetic and cardiovascular drugs were capped in 2014.
ii. Ceiling prices of coronary stents were fixed and notified on 13th February, 2017 for the first
time.
iii. Ceiling price of knee implants, which is one of the components under ‘Orthopaedic Implants’,
was notified on 16th August, 2017.
iv. A cap on Trade Margin of 42 selected non-scheduled anti-cancer medicines was put under
‘Trade Margin Rationalization’ approach, which brought down prices of 526 brands of anti-
cancer medicines.
v. During COVID-19, the price of Oxygen Concentrators, Pulse Oximeter, Blood Pressure
Monitoring Machine, Nebulizer, Digital Thermometer and Glucometer were regulated under
“Trade Margin Rationalisation” approach in June/July 2021.
Details of prices fixed or revised by NPPA are available on NPPA’s website (www.nppa.gov.in). NPPA
monitors the prices of drugs and instances of overcharging are dealt with as per the relevant provisions of
DPCO, 2013.
As informed by Department Promotion of Industry & Internal Trade (DPIIT), the Government has
incorporated several safeguards under the provisions of the Patents Act, 1970 to maintain a balance
between the interests of innovator pharmaceutical companies and generic manufacturers, while ensuring
access to affordable medicines. The key measures are as under: -
i. Patent rights granted under Section 48 are private rights, providing the patent holder exclusive
authority to prevent others from making, using, selling or importing the patented product
without consent. Disputes arising from such rights are adjudicated by competent courts,
thereby providing a structured legal framework for resolving conflicts between innovators and
generic manufacturers.ii. Patent applications undergo a robust two-stage scrutiny in the Indian Patent Office. Under
Sections 12 and 14, applications are first examined by a Patent Examiner for technical and
legal compliance, including patentability criteria. The findings are subsequently reviewed by
the Controller of Patents, and patents are granted under Section 43 only after due
consideration, thereby ensuring quality and preventing grant of weak or frivolous patents.
iii. The Act provides a comprehensive opposition framework to safeguard public interest. Pre-
grant opposition under Section 25(1) allows any person to challenge a patent before grant,
while post-grant opposition under Section 25(2) enables interested parties to contest a granted
patent within one year. These provisions allow generic manufacturers and other stakeholders
to challenge patents not meeting statutory requirements of novelty, inventive step and
industrial applicability, thereby reducing potential disputes.
iv. To prevent unjustified extension of patent monopoly, Section 3(d) restricts patentability of
new forms of known pharmaceutical substances unless they demonstrate enhanced
therapeutic efficacy. This ensures that minor or incremental modifications cannot be used to
prolong patent protection.
As informed by DPIIT, the Patents Act, 1970 contains carefully designed safeguards to ensure that
Compulsory Licensing (CL) is invoked only in exceptional circumstances, while protecting the legitimate
interests of patent holders. The key provisions are as under:
i. Under Section 84, compulsory licences may be granted only when specific conditions are
fulfilled, such as non-availability of the patented invention at a reasonably affordable price,
failure to meet the reasonable requirements of the public, or non-working of the patent in
India. This ensures that CL is not granted arbitrarily.
ii. Under Section 90, the Controller of Patents determines the terms and conditions of the
licence, including payment of reasonable royalty and remuneration to the patent holder. This
balances public interest with the commercial interests of innovators.
iii. Compulsory licences are granted only after detailed examination, hearing, and adherence to
due process by the Indian Patent Office, ensuring transparency and fairness.
This information was given by Minister of State for Chemicals and Fertilizers, Smt. Anupriya Patel, in a
written reply in the Lok Sabha today.
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