← Policy & Regulation: Pricing and Tariff Control (all topics)
NPPA/DPCO price control / NLEM
What it is
The National List of Essential Medicines (NLEM 2022 - 388 medicines) forms Schedule-I of the DPCO, 2013; inclusion makes a molecule subject to an NPPA ceiling price
Ceiling = simple average of prices of brands with 1%+ market share plus 16% retail margin, revised annually by WPI. Non-scheduled drugs may raise MRP only 10% a year, and Para 19 lets NPPA cap any drug or device
Impact on industries
- Access gain - ceilings fixed for 935 scheduled formulations and retail prices for 3,845 new drugs as of Jul 2026, where only ~35% of the population is insured
- Revision far below input inflation: the Apr 2026 cycle allowed a WPI increase of just 0.65% against double-digit API cost rises
- Hits the weakest hardest - small commodity makers with raw material at 55-65% of revenue have no branded mix to absorb the cap, and each NLEM expansion widens control
- Para 19 caps on stents and knee implants of 65-85% compress device and hospital realisations well beyond the drug list