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Panel asks DoP to submit reply to specific issues on regulatory blind spots in DPCO
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Gireesh Babu, New Delhi
August 01 , 2026
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The Department-related Parliamentary Standing Committee on Chemicals and Fertilisers has asked the Department of Pharmaceuticals (DoP) to furnish reply specific to the issues it has highlighted earlier in connection with the regulatory blind spots in the Drugs Prices Control Order (DPCO), 2013, as the action taken reply submitted by the Department was silent on various issues.
It has also asked the DoP to have a closer regulatory scrutiny on the pricing of non-scheduled fixed dose combinations (FDCs), as the category remains outside the ambit of price regulation despite their widespread use and potential for irrational combinations.
The Committee, in its latest report presented to Lok Sabha on July 27, was considering the action taken by the government on its recommendations in the previous report on 'Price rise of medicines in the pharmaceutical sector impacting the lives of ordinary citizens adversely - A review'.
In the previous report, the Committee had highlighted inadequacy of the current DPCO, 2013 framework in curbing pricing malpractices in India’s pharmaceutical sector, regulatory gap which allowed manufacturers to launch non-scheduled formulations at arbitrary points, lack of transparency in Price to Stockist (PTS) data on platforms like Pharma Sahi Daam and Sugam App and exclusion of FDCs from ambit of price regulation.
"However, the Committee find that Department’s Action Taken Reply is silent with respect to most of these issues pointed out by the Committee. The Committee, therefore, desires that the Department furnish their reply to these specific issues highlighted by the Committee at the earliest," said the Panel headed by Member of Parliament Kirti Azad Jha in its latest report.
The Committee, in their original report, has observed that FDC drugs, which accounted for a substantial share of prescriptions in India, also remained outside the ambit of price regulation despite their widespread use and potential for irrational combinations.
It noted that the Department's clarification in this regard that ceiling price of FDC drugs, that are considered essential for priority health need and hence included in NLEM, is fixed as per the provision of DPCO, 2013 while increase in prices of non-scheduled FDCs are regulated as per the extant provision of DPCO, 2013 in this regard.
"However, the Committee is of the view that the pricing of non-scheduled FDC drugs require closer regulatory scrutiny. The Committee therefore reiterates their earlier recommendation that the Department should look into the matter and initiate ameliorative steps in this regard," added the Panel.
The Panel, in the original report, noted that the existing Drugs (Prices Control) Order 2013 (DPCO) is structurally inadequate to curb pricing malpractices in India’s pharmaceutical sector.
It observed that while the DPCO empowers the National Pharmaceutical Pricing Authority (NPPA) to fix ceiling prices for drugs listed under the National List of Essential Medicines (NLEM), it fails to extend this regulatory authority to the unscheduled drugs.
As such the NPPA is not empowered to regulate trade margins for non NLEM drugs in cases where excessive markups are evident on widely used and lifesaving medicines. This regulatory gap allows manufacturers to launch non-scheduled formulations, both branded and generic, at arbitrary points.
Although they are technically restricted from increasing the maximum retail price (MRP) by more than 10 percent annually, the absence of initial price fixation renders this control largely meaningless. This loophole requires to be corrected, it opined and recommended to look into these matters, along with the issues of disclosing the PTS and regulating price of FDC drugs.
The DoP, in its reply to this, said that the National List of Essential Medicines (NLEM) released and revised by the ministry of health from time to time contains such medicine which satisfy the priority health needs of the country’s population and are required to be made available within the context of functioning health system at all times in adequate quantity to serve the general public.
"In addition, the existing policy and regulatory regime has also given impetus to the sustained growth of the sector while balancing it with the objective of facilitating availability and accessibility of drugs in the country at reasonable price," informed the DoP. The prices of scheduled and non-scheduled formulations in India are comparatively lower, it pointed out quoting a study from life sciences consulting firm IQVIA.
The relatively lower prevailing prices in India and the market competition affects the business decision regarding launch price of manufacturers of non-scheduled formulations, both branded and generic. It added that the prices of FDCs are not outside the ambit of DPCO, 2013.
The Department added that according to Pharmarack database for financial year 2024-2025, which covers about 98,000 SKUs, shows that majority (approximately 87%) of the non-scheduled market is availing weighted average markup (margin for distributor and retailer as a percentage of price to distributor) up to 45%.
Out of the total non-scheduled market, approximately 4% are having the weighted average markup more than 100% of the price to the distributor. Thus, the high margin is not the industry norm but is observed only in the case of a small fraction of the market.
"However, government is seized of the matter regarding high trade margin in some cases in some of the drugs and have taken measures to address the same from time-to-time by regulating their prices under trade margin rationalisation (TMR) approach using the provision under paragraph 19 of DPCO, 2013," said the Department, adding that it has conducted extensive consultations with all stakeholders on these issues and incorporation of a suitable enabling provision in DPCO, 2013 for a TMR approach and the issue is presently under consideration of the Department.
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