The National Pharmaceutical Pricing Authority (NPPA) has allowed a marginal increase in the prices of essential medicines. From April 1, 2026, companies can raise the Maximum Retail Price (MRP) of certain medicines by about 0.65%. This increase is linked to the Wholesale Price Index (WPI), which reflects changes in the cost of goods in the economy.
The decision follows data shared by the Office of the Economic Adviser (OEA) under the Department for Promotion of Industry and Internal Trade (DPIIT). The NPPA, under the Department of Pharmaceuticals, has a mandate to fix and monitor prices of essential medicines and medical devices in the country.
According to this data, the WPI rose by around 0.65% in 2025 compared to 2024. Since medicine prices are tied to this index, the increase in drug prices will be in line with this marginal rise.
The NPPA, in a memorandum issued on Wednesday, also clarified that pharmaceutical companies do not need to take prior approval from the government to increase prices under this rule.
“As per provisions of Paragraph 16(2) of the Drugs (Prices Control) Order, 2013 (DPCO, 2013), the manufacturers may increase the Maximum Retail Price (MRP) of scheduled formulations on the basis of this WPI, and no prior approval of the Government in this regard shall be required.”
Scheduled drugs are those listed under the National List of Essential Medicines (NLEM). These include commonly used medicines such as painkillers, antibiotics, and anti-infective drugs. Around 900 formulations fall under this category. Since these medicines are essential, their prices are regulated by the government to ensure they remain affordable.
The revised prices will come into effect from the beginning of the financial year 2026–27. The NPPA is expected to soon issue a detailed notification listing the updated prices for all scheduled drugs.
This year’s increase is quite small compared to previous years. For example, in 2024, the price hike was almost negligible at around 0.005%. In contrast, there was a sharp increase of over 12% in 2023, which was one of the highest in recent years. Similarly, in 2022, prices were allowed to rise by around 10.7%. These higher increases were due to a significant rise in the WPI during those years.
Looking further back, the WPI increase for medicines was about 1.88% in 2020, 4.26% in 2019, and 3.43% in 2018. Interestingly, there was even a decline in prices in 2016, when the WPI showed a negative growth of around -2.71%. This means that drug prices can go down as well if the index falls.
The way drug pricing works in India is quite structured. For scheduled medicines, the government fixes a ceiling price. This price is based on the average market price of different brands of the same medicine that have a certain level of market share. Because of this system, prices sometimes reduce when a new ceiling is fixed.
Every year, these ceiling prices are revised on April 1, based on the WPI for the previous year. Importantly, the increase in prices of scheduled medicines cannot be more than the WPI. This ensures that price hikes remain controlled and linked to inflation.
For non-scheduled medicines, the rules are slightly different. The NPPA does not fix their prices directly but ensures that companies do not increase their MRP by more than 10% in a 12-month period.
