Co-author: Naman

In India, essential medicines are listed in the National List of Essential Medicines (NLEM) which is updated regularly. NLEM considers World Health Organisation (WHO) guidelines, State Drug Lists, National Health Programmes and emergency needs. These medicines are considered critical for public health. Through the Drugs (Prices Control) Order, 2013, pharmaceutical pricing policy is implemented by the National Pharmaceutical Pricing Authority (NPPA). As on March 12, 2025, ceiling prices of 928 scheduled formulations and retail prices of over 3,200 new drugs stood fixed by the NPPA. Due to fixation or refixation of prices under NLEM, 2022, the average price reduction was about 17.0 per cent. This resulted in estimated annual savings of approximately ₹3,788 crore to patients.

The most direct impact of bringing a drug under the price control is the mandated reduction in its Maximum Retail Price (MRP) to or below the ceiling price fixed by the NPPA. In this way, essential medicines become more affordable and accessible to the public. A more pronounced effect is ‘market switch’ as prescribers and patients tend to shift towards the affordable regulated drugs. Price controls can also lead to decrease in the total sales volume of the price-controlled product category. This happens when manufacturers of price-controlled product category reduce their marketing and promotional efforts due to lower profit margins.

In extreme cases, those manufacturers can pull their products altogether from less profitable markets where distribution costs are high, e.g., rural markets. This holds true for those pharmaceutical companies which have local or regional presence and operate on thin margins.

When profit margins for manufacturers become unsustainable due to price controls then they can cease to produce. The Government monitors the production and availability of scheduled formulations and the active pharmaceutical ingredients contained in the scheduled formulations. Para 21(2) of the DPCO has safeguards due to which those manufacturers who intend to discontinue any scheduled formulations from the market must issue a public notice and are under obligation to intimate the Government at least six months prior to the intended date of discontinuation. Further, the government may direct the manufacturer to continue with required level of production or import for a given period.

Previous studies on impact of price regulations have shown the decline in the value of regulated drugs, and increase in the value of unregulated drugs, suggesting a price effect and a shift in firm focus, reduction in margins for wholesalers and retailers, significant price variation for cancer drugs both under and outside price control, decline in realizations for certain drugs and resultant impact on domestic market growth, promotional spending (detailing) by pharmaceutical companies, shift in marketing focus to unregulated but related drugs among others.

Diabetes is a major concern as India is home to the world’s largest diabetic population. Studies point out the number of patients ranging from 77 million to as high as 212 million individuals in India that accounts for over a quarter of the global diabetes burden. By 2045, this number will surge to over 134 million as per the projections by the International Diabetes Federation. Contributory factors cited include genetic predisposition among Indians, rapid urbanization, and associated lifestyle changes such as physical inactivity and altered dietary patterns. Treatment gap due to issue of ‘underdiagnosis’ increases the risk of developing severe and costly complications. Diabetes is a chronic and costly condition for patients, as significant population in India has to bear Out-of-pocket expenditure. In this background, the government’s regulatory interventions are aimed at controlling the prices of antidiabetic medicines.

Quantitative analysis conducted on a cohort of ten key anti-diabetic formulations encompassing a wide range of brands and molecular combinations presents interesting insights. For Linagliptin-based antidiabetic combinations (Linagliptin IP 2.5 mg + Metformin Hydrochloride IP 500 mg), all brands (3 in total) experienced decline in price ranging from 5.33 per cent to 12.46 per cent. For Vildagliptin 50 mg + Metformin Hydrochloride IP 1000 mg combination, decline in price varied 4.00 per cent to as much as 45.0 per cent, e.g., for Vylda M, price per unit after imposition of ceiling price went down from ₹13.18 to ₹7.27, price reduction was 37.65 per cent for METS MALL VX whereas for Valdiff M, the price reduction was only 4.21 per cent. For 5 brands, the reduction was anywhere from 4.00 per cent to 5.46 per cent. Overall, thirteen brands came under price control in this category.

For Vildagliptin 50 mg + Metformin Hydrochloride IP 500 mg combination, the decline in the price was just 3.35 per cent for Valdiff M whereas METS MALL VX faced the steepest percentage decline of 40.5 per cent as the price per unit went down to ₹6.93 per unit from ₹11.66 per unit. Vylda M faced decline in the price to the tune of 32.91 per cent, i.e., ₹6.93 per unit from ₹10.33 per unit. Price decline was in the range of 3.35 per cent and 10.92 per cent for six brands, and for four brands, the decline was in the range of 16.40 per cent to 19.32 per cent. Overall, twelve brands came under price control in this category.

Sitagliptin Phosphate Monohydrate IP (eq. to Sitagliptin 50 mg) + Metformin Hydrochloride IP 500 mg combination had ten brands which came under price control. All these brands experienced a decline in prices, with the highest reduction of 26.67 per cent observed for EMSITA M as the price per unit came down to ₹7.87 per unit from ₹10.71 per unit. SIAGLIDE M and STANLAT M also faced about 25.0 per cent reduction in price. Brands like LUPISIT-M and Glura M showed relatively smaller decline of about 8.0 per cent.

For Sitagliptin Phosphate Monohydrate IP (eq. to Sitagliptin 50 mg) + Metformin Hydrochloride IP 1000 mg combination, eleven brands came under price control. Reduction was to the extent of almost 40.0 per cent for one brand (Sitabite M) as the price came down to ₹8.96 per unit from ₹14.89 per unit. Minimum reduction in the price was observed to the extent of 3.55 per cent in case of LUPISIT M. Reduction in the prices of seven brands was in the range of 13.51 per cent – 39.82 per cent.

For Dapagliflozin Propanediol Monohydrate (eq. to Dapagliflozin 10 mg) + Vildagliptin IP 100 mg (SR) + Metformin Hydrochloride IP 500 mg (SR) combination, price reduction was observed for all four brands. The ceiling price after price control came down to ₹12.30 per unit. Prior to price control, two brands were being sold at ₹14.29 per unit, and two brands were being sold at ₹14.21 per unit. Overall, the price reduction was in the range of 13.44 per cent to 13.92 per cent.

Dapagliflozin Propanediol Monohydrate (eq. to Dapagliflozin 10 mg) + Vildagliptin IP 100 mg (SR) + Metformin Hydrochloride IP 1000 mg (SR) combination had four brands which came under price control. VICEMIC ODM faced the reduction to the extent of 23.99 per cent. For two brands, the decline is price was about 9.84 per cent as earlier, these brands were being sold at ₹14.93 per unit, and due to price control, the ceiling price was fixed at ₹13.46 per unit. Lowest reduction of 5.80 per cent was in case of VERIFICA DM.

Dapagliflozin 10 mg formulation had 11 brands which came under price control.  DAPNAT faced the steepest fall as the price got reduced from ₹16.43 per unit to ₹10.24, i.e., 37.67 per cent decline in the price. DAPAGLYN also faced significant decline in price to an extent of 30.29 per cent. For 3 brands, the reduction in the price was just 1.16 per cent. For 6 brands, the reduction was in the range of 12.55 per cent – 20.98 per cent.

For Metformin Hydrochloride 500 mg (Extended Release) + Dapagliflozin 10 mg combination, 13 brands came under price control. For 5 brands, reduction in the price was very nominal, i.e., 1.45 per cent. For 4 brands, reduction was in the range of 5.03 per cent – 13.14 per cent. DAPLO M faced the steepest reduction of 33.68 per cent.

For Metformin Hydrochloride 500 mg (Extended Release) + Glimepiride 1 mg combination, 9 brands came under price control in 2023.  GLUCRETA M faced the steepest fall of 35.09 per cent, as the price came down from ₹10.20 per unit to ₹6.62 per unit. Other brands also faced reduction in price, e.g., AMARYL M (27.17 per cent), UDAP M (26.36 per cent) etc. GEMER, the lowest priced formulation also faced price reduction of 6.76 per cent.

It is evident from analysis that price control resulted into reduction in prices of antidiabetic drugs, which in turn affected overall contribution of these formulations in the turnover of respective pharmaceutical companies. From the patient’s perspective, the price reduction of antidiabetic formulations lowered Out of Pocket Expenditure. None of these 90 brands related to ten specific anti-diabetic formulations faced discontinuation which suggests that pharmaceutical companies have developed effective strategies to navigate a difficult regulatory and competitive landscape without withdrawing their established brands.

Dr. Anil Kumar Angrish-Associate Professor (Finance and Accounting),

Department of Pharmaceutical Management, NIPER S.A.S. Nagar (Mohali), Punjab

Naman-M.B.A. (Pharm.) (2023-25 Batch),Department of Pharmaceutical Management,

NIPER S.A.S. Nagar (Mohali), Punjab

Disclaimer: Views are personal and do not represent the views of the Institute.