The National Pharmaceutical Pricing Authority (NPPA) has directed drug manufacturers to revise the maximum retail prices (MRP) of medicines that received customs duty exemptions under the Union Budget 2026. The move aims to ensure that the benefit of reduced import duties on specified pharmaceutical inputs is passed on to patients through lower drug prices.

Under the notification issued recently, the NPPA asked companies to align the MRPs of finished formulations with the reduced cost structure resulting from budgetary duty concessions. The pricing regulator said that companies should review their pricing within the stipulated timeline and make necessary adjustments so that end users benefit from cost savings arising from the duty exemption.

The directive follows tax relief measures introduced in the 2026 Budget that exempted basic customs duty on several categories of imported drugs and raw materials used in pharmaceutical manufacturing. The government’s intention behind the duty exemption was to lower production costs, encourage domestic industry competitiveness and ultimately make medicines more affordable for patients.

In its communication to industry stakeholders, the NPPA emphasised that duty savings must be reflected at the retail level. Drugmakers that fail to comply with the new pricing guidance may be subject to regulatory action under the provisions of the Drugs (Prices Control) Order, 2013.

Industry representatives welcomed the clarification from the pricing authority, noting that timely compliance would help maintain price stability and prevent unjustified price increases in the market. Manufacturers are now in the process of reissuing MRPs on affected products to reflect the duty exemption benefits.

The NPPA’s step underscores ongoing efforts by the government and regulator to balance industry growth with consumer interests, ensuring that policy incentives translate into tangible benefits for patients across India.