Review on Drug Price Control Order

Abstract

Price regulation is one of the raging topics in the pharmaceutical sector. As every subject has its pros and cons, so is the case with Drug Price Control Orders (DPCO). After the initiation of DPCO in 1995, its revised version was implemented in 2013. DPCO 1995 accounted for about 74 bulk drugs. On the contrary, DPCO 2013 has almost 652 drugs under it. Hence, currently, all the medicines under DPCO are regulated by DPCO 2013. Also, it can be analyzed that the increase in the number of drugs under DPCO meansthere is ahigher demand for essential drugs.Thus,on abiggerpicture, itmeans that there is an increase in the diseases overall.

Introduction

The Drug Price Control Order (DPCO) is an Indian government regulation designed to ensure that essential and life-saving medicines are available at affordable prices for all sections of society. It is implemented through the National Pharmaceutical Pricing Authority (NPPA), which fixes and revises drug prices, enforces ceiling prices, and ensures compliance by pharmaceutical companies. If companies sell drugs above the government-set ceiling price, NPPA can order price reductions and recover excess charges.

A key mechanism under DPCO is the National List of Essential Medicines (NLEM), which identifies essential drugs (over 348 listed, and expanding). These medicines are brought under price control to ensure affordability and access.

Over time, DPCO has evolved through multiple revisions:

• DPCO 1970: Introduced profit caps on pharmaceutical companies.
• DPCO 1979: Introduced ceiling prices and MAPE-based pricing.
• DPCO 1987: Reduced number of controlled drugs and refined pricing rules.
• DPCO 1995: Further liberalized controls, reducing price-controlled drugs.
• DPCO 2013 (current major version): Expanded price control to 348 drugs and 652 formulations and shifted from cost-based pricing to market-based pricing.

Under DPCO 2013, pricing is determined using a ceiling price system, calculated from the average market price of major brands plus a fixed retailer margin (16%). Wholesaler and retailer margins are regulated to prevent excessive pricing.

Conclusion

Price control was needed for regulation of prices as multinationals were imposing ahigher price for drugs. DPCO is an initiative taken by the NPPA in accordance with NLEM. Several amendments have been carried out and the DPCO is upgraded according tocurrenttrendsandfutureforecasting.ThecomparisonbetweenDPCO1995andDPCO 2013 elaborates different aspects of change such as pricing strategy, number of formulations under DPCO, etc. This has provided with the information of increase in demand of drugs. DPCO provides essential drugs at less expensive prices to the patients who cannot afford the treatment. Thishas alsobeen amotive in many other countries and formulation of different price control agencies has taken place. Developed countries like the USA, the UK, Japan, etc. are also keen to launch different price control initiatives for the enhancement of healthcare sector. A maximum retail price (MRP) is a manufacturer calculated price that is the highest price that can be charged for a product sold in India. The NPPA regularly publishes list of medicines and the maximum ceiling prices. NLEM forms the basis of deciding which medicines should come under price control via DPCO. This Act is very much helpful for patient who take regular medicine so, they can afford medicine in minimum price. Due to that the patient compliance is achieve. According to the need of the drug the medicine should place in essential medicine list.

References

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Copyright

Copyright © 2026 Chandan Mani Shukla, Chirag Singh, Tarkeshwar Prasad Shukla. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.