DPCO Amendment 2026: What NPPA’s New Overcharging and Compliance Rules Mean for Pharma Companies

On June 30, 2026, the Ministry of Chemicals and Fertilizers notified the Drugs (Prices Control) Amendment Order, 2026 (S.O. 3516(E)), amending the Drugs (Prices Control) Order, 2013 (DPCO). There have been multiple changes introduced by the Drugs Prices Control Amendment Order 2026, which is going to significantly impact the pharma industry. This article will explore what the modifications are, how it differs from the old regime, and what does it mean for the pharma industry.

What Was the Old Regime Under DPCO 2013?

Before this amendment, five things worked in a way that regularly caused disputes between manufacturers and the National Pharmaceutical Pricing Authority (“NPPA”):

• Overcharging liability ran up the chain: If a distributor, stockist, or retailer sold a scheduled formulation above the notified ceiling price, the manufacturer could still be pulled into recovery proceedings for that overcharging, even where the manufacturer had done everything right on its end. There was no formal carve-out that said, “if you proved you communicated the revised price correctly, you are not on the hook for what happened three steps down the supply chain.” This is where a large share of NPPA show-cause notices to manufacturers originated, and it often felt disproportionate to the manufacturer’s actual conduct.
• Every new drug needed fresh price approval: Under DPCO 2013, a formulation counts as a new drug if it combines an NLEM drug with another drug, or changes the strength or dosage of an NLEM drug. Even when one company had already secured NPPA’s price fixation for such a formulation, another manufacturer wanting to launch the same drug still had to go through the full price approval process again. This created delay for what was, in substance, a repeat filing.
• Limited Scope for Pricing: The DPCO framework did not give the government a clear, general mechanism to fix different ceiling or retail prices for the same drug based on pack size, packaging type, or whether the product came in liquid, gaseous, or another form. Differentiated pricing was really only possible by invoking the extraordinary circumstances route under Paragraph 19, which is a high bar and not meant for routine commercial variation.
• Record retention had no fixed floor: DPCO did not specify a clear minimum period for which manufacturers had to preserve records relating to active pharmaceutical ingredients, bulk drugs, and formulations. In practice, this meant companies sometimes faced requests for records going back much further than they had anticipated, with no statutory certainty on how long they actually needed to hold on to them.
• Pricing review happened on a case-to-case basis: There was no defined, formal process for a manufacturer to seek a review of a price related decision. Matters were largely taken up individually, at the government’s discretion, with no set procedure or timeline that a company could rely on when it wanted a price point reconsidered. This made outcomes harder to predict and left manufacturers waiting on the regulator to act, rather than being able to initiate the process themselves.

What Does the DPCO Amendment 2026 Change?

The amendment addresses each of these five points directly:

• Overcharging liability is now tied to fault, not just position in the supply chain: Where a manufacturer can demonstrate compliance with the prescribed price dissemination requirements, its DPCO overcharging liability is now restricted to the quantity of stock actually overcharged by the distributor, retailer, or stockist found to be in violation. It is no longer automatically exposed for the entire chain’s conduct. That relief is conditional, and the conditions are specific. A manufacturer has to follow the conditions specified in the DPCO Amendment 2026. Miss any one of these, and the older, broader liability position still applies.
• A lighter path for repeat new drug launches: Existing manufacturers launching the same new drug within 12 months of the government fixing its retail price will no longer need to apply afresh for price approval. Instead, they intimate the launch through a newly introduced Form IA DPCO, within one month of launch. NPPA still gets visibility into the launch, but the duplicate approval step is gone.
• Room for genuinely different prices for the same drug: The government is now empowered to notify separate ceiling or retail prices for the same drug, taking into account pack size, packaging, dosage form, and whether the product is liquid, gaseous, or in another form, where there is a specified therapeutic rationale. This is not a blanket permission to price every SKU differently. The rationale has to be genuine and clinical, not just a packaging cost argument.
• A defined, seven-year DPCO record retention period: Manufacturers must now maintain records relating to active pharmaceutical ingredients, bulk drugs, and formulations for at least seven financial years. Where DPCO proceedings are pending, the records have to be preserved for longer, until those proceedings conclude.
• Pricing review is now application based: Instead of leaving price related reviews to be picked up on a case-to-case basis at the government’s discretion, the amendment moves toward an application-based process. A manufacturer can now put in a formal application to have a pricing matter reviewed, rather than waiting for the regulator to take it up on its own. This gives companies a defined route to initiate a review and a clearer sense of where things stand, instead of an open-ended wait.

What is the Impact of the DPCO Amendment 2026?

The real value here lies in the certainty this brings, not in any one relief measure on its own. Manufacturers now have a way to know, in advance, what protects them and what does not, instead of finding out after the fact that they were on the wrong side of an enforcement action. It also changes what NPPA compliance is for. Getting the paperwork right was always mandatory, but it rarely felt like it earned anything beyond staying out of trouble. Now it directly determines whether a company is protected or exposed, which gives manufacturers a genuine business reason to build these habits properly, and not just a legal one. For price fixation matters, this should translate into fewer disputes reaching the show-cause or recovery stage. Manufacturers now have clearer, self-executing routes to demonstrate compliance and seek a review, rather than waiting on the regulator to act first. Over time, that should make outcomes more consistent and cut down the number of contested matters altogether. For an industry that has often found itself reacting to enforcement rather than shaping its own compliance position, that shift, from discretion to process, is what makes this update worth paying attention to. If your organisation has open overcharging matters, a new drug launch in the pipeline, or wants to explore differentiated pricing for an existing product, this is a good time to have that conversation with your regulatory counsel rather than waiting for an inspection or a notice to force the issue.

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