**Executive Summary**
This document is the response to Unstarred Question No. †1228 in Lok Sabha regarding the pricing of branded medicines, answered on February 6th, 2026. The Minister of Chemicals and Fertilizers clarifies the government's approach to regulating drug prices under the Drugs (Prices Control) Order 2013 (DPCO, 2013) and outlines actions taken against overcharging and violations. It also addresses the prescription of generic drugs and regulations concerning banned medicines.
**Key Points / Main Content**
* **Drug Pricing Regulation:**
* Prices are regulated under DPCO, 2013, based on the National Pharmaceuticals Pricing Policy, 2012.
* The objective is to ensure the availability of essential medicines at reasonable prices.
* The policy follows principles of essentiality and market-based pricing.
* Cost data of companies are not maintained by the Department.
* **Price Control Mechanisms:**
* NPPA controls prices by fixing ceiling prices for formulations specified in Schedule-I to DPCO, 2013, based on the National List of Essential Medicines (NLEM).
* Ceiling prices and retail prices are fixed by adding a 16% margin to the average Price to Retailer (PTR) of brands with over 1% market share.
* Manufacturers of non-scheduled formulations cannot increase MRP by more than 10% within 12 months.
* Prices of scheduled and non-scheduled formulations are monitored, and action is taken against companies overcharging or violating DPCO, 2013.
* Margins at various levels in the supply chain are not regulated.
* **Generic Drug Prescription:**
* The Indian Medical Council Regulations mandate physicians to prescribe drugs with generic names legibly, preferably in capital letters.
* Circulars have been issued directing Registered Medical Practitioners to comply.
* Central Government hospitals and CGHS Doctors and Wellness Centres are directed to prescribe generic medicines.
* State Medical Councils or the Ethics and Medical Registration Board (EMRB) can take disciplinary action for violations.
* States are advised to ensure prescription of generic drugs and conduct regular prescription audits.
* **Maximum Retail Price Display:**
* Manufacturers must display the maximum retail price (inclusive of all taxes) in indelible print on the label of the container.
* **Banned Medicines:**
* The Central Government has prohibited the manufacture, sale, and distribution of 603 drugs and Fixed Dose Combinations for human use and 40 drugs for animal use.
* Lists of banned drugs are available on the CDSCO website (www.cdsco.gov.in).
* Selling banned drugs is punishable under the Drugs and Cosmetics Act, 1940.
* State Licensing Authorities (SLAs) can take action against such offences.
* CDSCO addresses complaints related to selling banned drugs with the State Drugs Controller.
**Impact Analysis**
**Drug Manufacturers**
* **Impact:** Subject to price control regulations, monitoring of prices, and potential action for overcharging or violating DPCO, 2013.
* **Action Required:** Adhere to DPCO, 2013 guidelines, ensure correct pricing, and comply with MRP display requirements.
**Medical Practitioners**
* **Impact:** Required to prescribe generic drugs and potentially subject to disciplinary action for non-compliance.
* **Action Required:** Prescribe generic drugs legibly, ensure rational prescription practices.
**Consumers**
* **Impact:** Protected by price regulations on essential medicines and have access to information about banned medicines.
* **Action Required:** Be aware of MRP on medicines and report overcharging or sale of banned drugs.
**State Licensing Authorities (SLAs)**
* **Impact:** Empowered to take action against the manufacture, sale, and distribution of banned drugs.
* **Action Required:** Enforce the Drugs and Cosmetics Act, 1940, and take necessary action against offenders.
Key Entities Referenced
Drugs (Prices Control) Order 2013 (DPCO, 2013): Controls prices of medicines; based on the National Pharmaceuticals Pricing Policy, 2012 and National List of Essential Medicines (NLEM).
National Pharmaceuticals Pricing Policy, 2012: The policy upon which prices of drugs are regulated.
National Pharmaceutical Pricing Authority (NPPA): Regulatory body under the Department of Pharmaceuticals that controls prices of medicines.
Department of Pharmaceuticals: The department under which the NPPA functions.
Drugs and Cosmetics Act, 1940: Law under which manufacture, sale, and distribution of banned drugs are punishable offenses.
GOVERNMENT OF INDIA
MINISTRY OF CHEMICALS AND FERTILIZERS
DEPARTMENT OF PHARMACEUTICALS
LOK SABHA
UNSTARRED QUESTION NO. †1228
TO BE ANSWERED ON 6th FEBRUARY, 2026
Prices of Branded Medicines
†1228. Shri Rajkumar Roat:
Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:
(a) whether it is a fact that branded medicines are currently being sold in the market at prices
ten, twenty and even thirty times higher than their manufacturing cost and that doctors are also
prescribing these same medicines, if so, the details thereof;
(b) whether the Government proposes to implement a policy to address the issue, if so, the
details thereof;
(c) whether the Government is likely to take action to ensure that the MRP (Maximum Retail
Price) of medicines does not exceed a certain percentage of profit margin, if so, the details
thereof;
(d) whether the Government proposes to introduce a regulatory law to ensure that both the
Wholesale Unit Price and MRP are clearly marked on every medicine, if so, the time by which
it is likely to be done and if not, the reasons therefor; and
(e) the names of medicines banned during the last ten years along with the action taken by the
Government against the violators selling such medicines?
ANSWER
THE MINISTER IN THE MINISTRY OF CHEMICALS AND FERTILIZERS
(SHRI JAGAT PRAKASH NADDA)
(a) to (c): Prices of drugs are regulated as per the provisions of the Drugs (Prices Control)
Order 2013 (DPCO, 2013) based on the National Pharmaceuticals Pricing Policy, 2012, with
the objective of ensuring the availability of essential medicines at reasonable prices while
providing sufficient opportunity for innovation and competition to support the growth of
industry. It follows the principles of essentiality and market-based pricing of formulations only.
Therefore, the cost data of the companies are not maintained by the Department. As per extant
provisions of DPCO, 2013, the National Pharmaceutical Pricing Authority (NPPA) under the
Department of Pharmaceuticals (DoP) controls prices of medicines by fixing ceiling prices of
formulations specified in Schedule-I to DPCO, 2013 which is based on the National List of
Essential Medicines (NLEM) and retail prices of new drugs as defined in paragraph 2(1)(u) of
DPCO, 2013. Ceiling prices and retail prices of a drug is fixed by adding 16% margin to the
average of Price to Retailer (PTR) of all brands of that drug having market share of 1% or more
of that drug in the market database. In case of non-scheduled formulations, manufacturers are
not allowed to increase the maximum retail price (MRP) of such formulations by more than
10% of MRP during preceding 12 months. Prices of both scheduled and non-scheduled
formulations are monitored and action is taken against companies found overcharging
consumers or violating the provisions of the DPCO, 2013. Further, as per the current policy
framework the margin at various levels in the supply chain is not regulated and are part of
business practices, and are guided by commercial considerations.The Clause 1.5 of the Indian Medical Council (Professional Conduct, Etiquette and
Ethics) Regulations, 2002 prescribes that every physician should prescribe drugs with generic
names legibly and preferably in capital letters and he/she shall ensure that there is rational
prescription and use of drug. The erstwhile Medical Council of India (MCI) had issued
Circulars vide which all Registered Medical Practitioners have been directed to comply with
the aforesaid provisions. The Directorate General of Health Services has directed all Central
Government hospitals to prescribe generic medicines only. Similar instructions to prescribe
drugs with generic name legibly have also been issued to all Central Government Health
Scheme (CGHS) Doctors and Wellness Centres. The National Medical Commission Act, 2019,
empowers the appropriate State Medical Councils or the Ethics and Medical Registration Board
(EMRB) of the National Medical Commission to take disciplinary action against a doctor for
violation of the provision of the aforesaid Regulations. Further, States have been advised to
ensure prescription of generic drugs and conduct regular prescription audits in public health
facilities.
(d): As per the extant provisions of DPCO, 2013, every manufacturer of a formulation,
whether scheduled or non-scheduled, is required to display in indelible print mark, the
maximum retail price (inclusive of all taxes) of that formulation on the label of the container
of that formulation and the minimum pack thereof offered for retail sale.
(e): As informed by MoHFW, till now, the Central Government has prohibited the
manufacture for sale, sale and distribution of 603 drugs and Fixed Dose Combinations for
human use and 40 drugs for animal use. List of banned drugs and veterinary drugs available
on the website of the Central Drugs Standard Control Organization (CDSCO) i.e.
www.cdsco.gov.in.
Manufacture, sale and distribution of Banned Drug in the country is a punishable
offence as per the Drugs and Cosmetics Act, 1940 and State Licensing Authorities (SLAs)
appointed by respective State Governments are empowered to take action against such
offences. As and when any such complaints/issues are received in CDSCO on selling of
banned drugs, the matter is taken up with State Drugs Controller for necessary action.
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