Beyond the pills: What India’s latest DPCO Amendment could mean for MedTech

Price control has always been one of the most difficult policy instruments to calibrate. While it undeniably improves affordability in the short run, its long-term success depends on whether the framework can distinguish additive value from products that offer incremental benefit. More than a decade ago, Germany found itself confronting a familiar policy dilemma in their healthcare reimbursement space, on how could one preserve the affordability angle while giving space for innovation to breathe. Since healthcare in Europe has its own sensitivities, the German government rather than choosing between a blanket price cap or its total abandonment, opted to redefine their pricing strategy. Through AMNOG (Pharmaceuticals Market Reorganisation Act), 2011, the German government introduced a scientific way to differentiate the newer forms of medicine which could justify added therapeutic superiority or benefits over existing drugs to be differently priced from the ones which were capped in their healthcare reimbursement models. So, the drugs that were capable to offer meaningful clinical value add could be priced at the premium while those medicines with limited outcomes were priced conservatively. This is one of the global reforms that healthcare economists usually quote while making an argument for a shift from uniform price capping towards value-based regulation, recognising that not all medicines are equal, but genuine innovation deserves to be distinguished. 

The value-based differentiation is not limited to Germany, in United Kingdom, the National Institute for Health and Care Excellence (NICE) evaluates medicines not merely on acquisition cost, but the value addition they bring to patients. A similar philosophy can be seen reflecting in Japan’s pricing framework, where national price controls coexist with premium pricing for medicines demonstrating superior efficacy, meaningful clinical usefulness, or genuine innovation. These examples underscore an important policy principle: price regulation and innovation need not be competing objectives. Rather, well-designed frameworks can preserve affordability while recognising demonstrable therapeutic value, ensuring that meaningful innovation is incentivised without compromising patient access.

On 30 June 2026, the Department of Pharmaceuticals notified the Drugs (Prices Control) Amendment Order, 2026, amending the existing DPCO, 2013, acknowledging a different pricing mechanism for any drug under price control if it justifies its added therapeutic value. Prima facie this amendment may appear modest on paper, but its broader significance lies in the policy direction it points towards. This shows the Government’s intent for greater flexibility into the pricing framework, acknowledging clinically relevant distinctions within the same product category. This positive signal opens a window where the Government may gradually move away from treating all medicines/formulations within a broad identity and instead adopt a more granular pricing framework that recognises technological innovation, provided there is demonstrable clinical or therapeutic justification. This science backed approach towards such a complex and highly regulated sector would build trust for global players who are looking to invest in India pursuant to various FTAs & CEPA agreements signed by India. If pursued consistently, it will allow gradual transition from regulating products solely because they belong to the same category to recognising meaningful clinical differentiation where evidence justifies it. Such an approach has the potential to strengthen both patient access and long-term innovation. 

What it means for MedTech?

Now the similar principle that guides the pharmaceutical reimbursement/pricing that not all innovations carry the same therapeutic value, can be replicated to the medical devices. Medical device industry is not static, and with constant feedback from patients, doctors, clinicians and scientists, every product goes through engineering refinements on a day-to-day basis. We have built mechanisms for post marketing surveillance so that we can innovate finer products which can compete with their predecessors. Take examples of stents and orthopaedic implants, the first-generation devices primarily established clinical feasibility; subsequent generations introduced thinner struts, improved alloy compositions, enhanced drug-eluting coatings, superior wear characteristics, and longer durability. Today’s technologies go even further, integrating artificial intelligence for procedural planning, compatibility with robotic-assisted surgery, patient-specific anatomical customisation, and advanced biomaterials designed to improve biocompatibility. This constant value addition reduces complications and extends implant longevity. Each innovation represents incremental investments in research, manufacturing precision, clinical validation, and physician training, often translating into measurable improvements in patient outcomes, procedural efficiency, or lifetime healthcare costs. Yet, under conventional price-control frameworks, these technologies are frequently grouped within a single product category and subjected to uniform pricing, with limited recognition of their differing clinical value or technological sophistication. Such an approach may succeed in improving short-term affordability but risks weakening incentives for continuous innovation, particularly in a sector where progress occurs through day-to-day incremental improvements rather than disruptive breakthroughs.

If such principle of recognising demonstrable therapeutic value is extended judiciously to selected medical technologies, it can create a more balanced regulatory environment without compromising affordability. Such policy predictability becomes particularly important at a time when India is actively positioning itself as a global MedTech manufacturing hub through dedicated medical device parks, increasing foreign direct investment, and a growing pool of skilled clinical and engineering talent. For global manufacturers, long-term investment decisions depend not only on infrastructure and market size, but also on a stable and predictable pricing ecosystem that rewards genuine innovation. 

If this DPCO amendment is carried forward consistently, it could be remembered as the moment India began reimagining its pricing philosophy. Its true success will not lie in how many products it regulates, but in whether it can distinguish meaningful innovation from routine product iteration across sectors. A pricing framework that rewards demonstrable therapeutic value while preserving affordability has the potential to improve patient access, strengthen regulatory credibility, and encourage long-term investment in healthcare innovation.