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Parliamentary Panel asks DoP to review current categorisation of medicines for price control
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Gireesh Babu, New Delhi
August 19 , 2026
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The Department-related Parliamentary Standing Committee on Chemicals and Fertilisers has recommended to the Department of Pharmaceuticals (DoP) to undertake a comprehensive review of the current categorisation of medicines to plug any possibility of arbitrary or unjustified fixation in initial prices of non-scheduled formulations.
The Panel, in a latest report reviewing the role, functions, and duties of the National Pharmaceutical Pricing Authority (NPPA) with specific reference to increase in prices of medicines in the country, also advised the Department to take "ameliorative steps" to address the issues related to the huge margins in the distribution channel in some cases.
The Panel, while considering the current practices and regulations of price control over medicines, discussed on whether the extant system of multiple categories of medicines, essential and non essential, scheduled and non-scheduled, ought to give way to a more unified regulatory framework to enhance clarity, transparency and ease of enforcement of price controls.
Considering the response from the DoP on the aspect, it noted that the huge market share (approximately 82%) belongs to the non-scheduled formulations whose prices are fixed by manufactures themselves and NPPA only monitors prices as per the provisions of DPCO 2013, under which manufacturers are required to not increase the maximum retail price (MRP) of such formulations by more than 10% of the MRP during preceding 12 months.
The Panel opined that this mechanism may allow manufacturers to launch non-scheduled formulations at arbitrary points.
"In this regard, the Committee desire that the Department undertake, along with the Ministry/Department concerned and other stakeholders, a comprehensive review of the extant categorization of medicines to plug any possibility of arbitrary or unjustified fixation in initial prices of non-scheduled formulations. The Committee may be apprised of the action taken in the matter," said the Panel headed by Member of Parliament Kirti Azad Jha, in its 33rd report.
The Committee take note of the Department's submission in this regard that the National Pharmaceuticals Pricing Policy, 2012 (NPPP, 2012) strives to achieve a balance between affordability and availability of drugs on the one hand and promotion of growth of industry on the other and price regulation across the board on a particular sector could affect investment, innovation and industrial growth.
The Panel also noticed that several hospitals and retailers offered discounts on medicines ranging from 20% to 60% on maximum retail price (MRP), which indicates the existence of inbuilt margins across the supply chain.
The Department has submitted that under DPCO 2013, the NPPA regulates scheduled and new drug prices, while non-scheduled formulation price increases are capped at 10% annually. Trade margins for non-scheduled drugs vary based on factors like dosage form, sales volume, ex-factory price, and marketing and distribution model. Further, discounts offered by hospital and retailers are guided by marketing and cost considerations of various business entities in the supply chain.
"However, in the view of the Committee, the Department's own admission that 'something needs to be done to contain these huge margins that are there in the distribution channel in some cases', warrant that the Department should look into the matter and initiate ameliorative steps in this regard," it opined.
"The Committee would like to be apprised regarding the steps taken by the Department," added the Panel.
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