DPCO (Amendment) Order, 2026: Overcharging Liability Relief for Pharma manufacturers

On 30 June 2026, the Department of Pharmaceuticals notified the Drugs (Prices Control) Amendment Order, 2026 (S.O. 3516(E)), the thirteenth amendment to the Drugs (Prices Control) Order, 2013 (DPCO 2013), issued under Section 3 of the Essential Commodities Act, 1955. The Order took effect on the date of its Gazette publication. Alongside changes to Paragraphs 11, 14 and 15 covered elsewhere, this amendment makes three operationally significant changes that every scheduled-formulation manufacturer’s regulatory affairs and finance teams need to build into their SOPs: a conditional cap on overcharging liability, a mandatory seven-year record-retention period, and a new proforma — Form-IA — for intimating the launch of new drugs.

Background

DPCO 2013 governs the fixation and revision of ceiling and retail prices for scheduled formulations, and the market-based pricing discipline applicable to non-scheduled formulations, under powers the Central Government exercises through the Essential Commodities Act, 1955. Since its original notification on 15 May 2013 (S.O. 1221(E)), the Order has been amended twelve times, most recently in May 2023. The 2026 Amendment Order continues this pattern of incremental refinement, but its changes to Paragraphs 24 and 29 go directly to the documentary evidence manufacturers must produce during NPPA price-revision and overcharging enforcement proceedings.

Conditional Relief on Overcharging Liability — Paragraph 24(1)

Paragraph 24 deals with a manufacturer’s obligations when a ceiling or retail price is revised downward. The 2026 Amendment inserts a second proviso to sub-paragraph (1) that, for the first time, gives manufacturers a documented pathway to cap their overcharging exposure rather than face liability across the entire chain of distribution.

Where a manufacturer produces documentary evidence, on demand, of sufficient effort to disseminate the revised price to all stakeholders, the overcharged amount attributable to that manufacturer will be calculated only on the stock held by the specific retailer, distributor or stockist found selling above the ceiling price for that batch — not on the manufacturer’s wider production or distribution network.

The five qualifying actions specified under the new proviso are:

1. Circulating the revised Market Retail Price list to dealers and retailers for display to consumers — within two weeks of the notification date.
2. Advertising the price reduction in at least two national newspapers, informing dealers, retailers and consumers — within two weeks of the notification date.
3. Issuing a revised or supplementary price list in Form V or Form VI to dealers and retailers, reflecting the revised prices.
4. Creating a dedicated “Drugs (Prices Control) Order Matters” section on the company’s homepage and uploading the revised price notification and Market Retail Price details.
5. Submitting batch-wise production details and stock position — held by the company and its distributors — at the time of the price revision.

Price List Reference Requirement — Paragraph 24(3)

Sub-paragraph (3) of Paragraph 24 has been substituted in its entirety. Every manufacturer must now issue a price list — and a supplementary price list where required — in Form V or Form VI to the State Drug Controllers and the Government, and that list must specifically reference the order or Gazette notification under which the price fixation or revision is being made. This closes a documentation gap: the specific regulatory trigger for a price list filing must now be traceable on the face of the filing itself.

Seven-Year Record Retention Mandate — New Paragraph 29

Paragraph 29 (“Maintenance of records and production thereof for inspection”) has also been substituted in full. Manufacturers must now maintain, in good order, records relating to the sales of individual active pharmaceutical ingredients or bulk drugs, and the sales of formulation units and packs manufactured, imported and marketed, for a period of not less than seven financial years immediately preceding the current financial year, along with any other records the Government may direct from time to time. The Government retains the power to call for and inspect these records at the manufacturer’s premises.

A proviso attached to the new Paragraph 29 states that where any proceeding under the Order has been initiated or is pending against a manufacturer, the relevant records must continue to be maintained in good order until the proceeding’s final disposal — irrespective of whether the seven-year window has lapsed. Industry commentary following the notification has read the seven-year period as intended to align DPCO retention obligations with limitation periods under other fiscal legislation, and as replacing a position in which retention expectations during NPPA proceedings were not tied to a fixed, clearly defined period.

Form-IA — Launch Intimation for New Drugs

Schedule-II now carries a new Form-IA — “Proforma for Intimation of Launch of New Drugs” — inserted immediately after Form-I, giving effect to Paragraph 15(2) as amended. Under the amended Paragraph 15(2), an existing manufacturer launching the same new drug within twelve months of the original retail price fixation is no longer required to apply for its own price fixation, but must file Form-IA within one month of launch. The form requires: the formulation name; manufacturer/importer and marketing company name and address; the composition as per the approved label; the date of commencement/launch; the formulation type and pack size; the therapeutic category or use; the launch price (Rs. per unit, excluding taxes); and the latest Government-notified price with its date of notification — self-certified by an authorised signatory.

Before vs After — Consolidated Comparison

Note: This Amendment Order sets out only the inserted or substituted text of Paragraphs 24(1), 24(3) and 29. Where a sub-paragraph is described as “substituted,” the exact prior wording is not reproduced in the notification itself; readers should cross-refer to DPCO 2013 as amended up to S.O. 2324(E) dated 25 May 2023 for the full previous text.

Compliance Implications