The Ministry of Chemicals and Fertilizers (Department of Pharmaceuticals) has released the Drugs (Prices Control) Amendment Order, 2026 (DPCO 2026), introducing significant changes that will alter how the Department of Pharmaceuticals regulates drug manufacturing and pricing within India. According to The Health Master, this order was issued under the Essential Commodities Act, 1955 and represents a comprehensive overhaul of the regulatory framework. The amendments provide relief to manufacturers in cases involving overcharging of scheduled formulations after price revisions, with the pharmaceutical industry stating these changes will simplify regulatory processes and reduce manufacturers' exposure in overcharging cases.
The relief comes with stricter compliance obligations that manufacturers must demonstrate. As reported by The Health Master, manufacturers must now circulate revised price lists to dealers and retailers, advertise price reductions in at least two national newspapers, update revised prices on their websites, issue revised price lists and maintain batch-wise production and stock details. Under Paragraph 24(1), manufacturers will have to provide documentation of their distribution of a price list to retailers within two weeks of the announcement of the ceiling price by the DPCO. The new framework requires direct circulation of the revised MRP list to all dealers and retailers for consumer display, submission of batch-wise production details and distributor stock status recorded at the exact time of revision.
The government has introduced measures to reduce procedural requirements for existing manufacturers launching new drugs. According to The Health Master, existing manufacturers launching the same new drug within 12 months of the government fixing its retail price will no longer have to seek a fresh price approval from the National Pharmaceutical Pricing Authority (NPPA). Instead, they will only have to submit an intimation of the launch via the newly introduced Form-IA within one month. The revised order states that if a manufacturer manufactures a new drug that is identical to the existing drug, and they intend to launch it within 12 months of the price being established for the initial launch of that drug, they are not required to apply for a ceiling price for that drug. Any launches of drugs at a higher price or failure to file Form-IA will result in the manufacturer being required to deposit into the government the total amount of overcharged money and the interest earned by the manufacturer on that amount.
The amendments introduce stricter record-keeping requirements for manufacturers. As reported by The Health Master, manufacturers will now be required to maintain records relating to active pharmaceutical ingredients, bulk drugs and formulations for at least seven financial years, with records to be preserved for longer where proceedings under the DPCO are pending. If the drugs of any manufacturer are under a legal proceeding with the Department of Pharmaceuticals, the records related to those drugs will have to be maintained indefinitely. The new regulations also include changes to Paragraph 15 that establish that if a manufacturer of a drug can prove that it distributed a notice of the new ceiling price for that drug to all other stakeholders in the supply chain of the drug, then the manufacturer will not be held financially liable for overcharging that resulted from that drug's pre-existing stock.
Industry executives said the amendments simplify implementation of the DPCO by reducing procedural bottlenecks while making compliance obligations more explicit. According to The Health Master, the changes reflect a shift towards stronger implementation rather than additional price controls. The government has also empowered itself to notify separate ceiling or retail prices for the same drug after considering factors such as pack size, packaging, dosage compliance and form, where there is a specified therapeutic rationale. This provision addresses industry demands for flexibility in recognizing genuine clinical needs across different drug presentations. The new regulations will impact all individuals associated with the pharma industry, including executives, compliance officers, and specialists who interact with the DPCO, requiring them to adapt to the enhanced compliance framework.
