Who actually sets the MRP on your medicine? A plain guide for India
The MRP on a medicine strip is printed by the manufacturer, inside rules set by the government. For essential medicines, the National Pharmaceutical Pricing Authority fixes a ceiling price. For all other medicines, the manufacturer sets the price but can raise it by no more than 10% a year. Every seller, including a hospital, can sell at or below MRP, never above it. That is why the same molecule can carry very different prices across brands.
The short answer
Three parties shape the number you see: the government, which writes the rules; the manufacturer, which sets the price within them; and the trade (distributors, stockists and retailers, including hospital pharmacies), which earns the gap between what it pays and the MRP. The rules come from the Drugs (Prices Control) Order, 2013, administered by the National Pharmaceutical Pricing Authority (NPPA).
Scheduled medicines: a government ceiling
Medicines on the National List of Essential Medicines are placed in Schedule I of the order. For these, NPPA calculates a ceiling price, broadly based on the average price of brands with meaningful market share. Manufacturers may sell at or below the ceiling. Price changes each year are linked to the wholesale price index, so ceilings can move up or down.
Non-scheduled medicines: the manufacturer decides, within a limit
For everything outside Schedule I, which is most of the market by number of brands, the manufacturer fixes the MRP when it launches. After that, it cannot raise the MRP by more than 10% in twelve months. The Centre restated these rules in the Rajya Sabha in August 2026, explaining why the same drug can carry different MRPs under different brands (Medical Dialogues).
| Type of medicine | Who sets the price | Main control |
|---|---|---|
| Scheduled (essential medicines list) | NPPA fixes a ceiling | Cannot sell above ceiling; annual revision linked to WPI |
| Non-scheduled | Manufacturer | Increase capped at 10% in 12 months |
| New drugs (new combinations or forms of scheduled drugs) | NPPA fixes a retail price on application | Price set before launch |
| Special cases | Government, using special powers | Trade margin caps, as with cancer drugs in 2019 |
Where the trade margin fits
The trade margin is the difference between the price at which a manufacturer sells to the stockist and the MRP. It funds the distributor, the retailer and the costs of storage and transport. India does not cap it for most medicines, so it can vary a lot between brands. When the government did cap it, for 42 cancer medicines in 2019, prices of 526 brands fell, some by around 90% (PIB). The full story is in what India’s 2019 cancer drug margin cap teaches us.
Why the same molecule has different MRPs
- Each brand is priced by its own manufacturer.
- Brands launched at different times start from different base prices.
- The 10% annual rule limits increases, not the starting point.
- Trade margins are negotiated brand by brand.
- Generic and trade-generic versions are often priced far lower to win volume.
Can anyone charge more than MRP?
No. Selling above MRP is not allowed for any seller. Selling below MRP is allowed, which is why online pharmacies, chain stores and government schemes can offer discounts. Jan Aushadhi Kendras sell generic medicines 50% to 80% cheaper than branded equivalents (PIB).
What this means for patients and hospitals
For patients, the useful question is rarely “is this above MRP?” and usually “is there an equivalent brand or generic at a lower MRP, and is it right for me?” That is a conversation to have with the doctor and pharmacist. For hospitals, explaining how MRP works is one of the easiest ways to reduce suspicion at the billing counter. I cover the hospital side in what a hospital pharmacy does that a chemist doesn’t and the wider debate in hospital medicine prices: what the debate misses.
This is a general explainer, not legal or medical advice. Rules change; check NPPA notifications for the current position.
Questions people ask
The manufacturer prints the MRP. For essential (scheduled) medicines, NPPA fixes a ceiling the MRP cannot exceed. For other medicines, the manufacturer sets the price but cannot raise it more than 10% a year.
The National Pharmaceutical Pricing Authority is the government body that fixes and monitors medicine prices under the Drugs (Prices Control) Order, 2013.
The Drugs (Prices Control) Order, 2013 is the regulation that sets out how medicine prices are controlled in India, including ceiling prices for essential medicines.
A medicine listed in Schedule I of DPCO 2013, based on the National List of Essential Medicines. Its price is capped by a government ceiling.
No. No seller can charge above the printed MRP. Selling below MRP is allowed.
Each brand is priced by its manufacturer, launched at a different time and sold with a different trade margin. Rules limit increases, not the starting price.
The difference between the price at which the manufacturer sells to the stockist and the MRP. It pays for distribution and retail.
Yes. In 2019, NPPA capped trade margins at 30% for 42 non-scheduled cancer medicines, and prices of 526 brands came down.
No. A hospital pharmacy sells at or below the MRP printed by the manufacturer. It does not set the MRP.
Ask your doctor or pharmacist whether an equivalent brand or generic is suitable. Jan Aushadhi Kendras sell generics at lower prices.
NPPA revises ceiling prices annually in line with the wholesale price index, and can also revise them when the essential medicines list changes.
NPPA publishes price notifications on its website, and its Pharma Sahi Daam app lets you look up ceiling prices and alternatives.
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