Membrane fusion is an essential process guiding many important biological events, which most commonly requires the aid of proteins and peptides as fusogenic agents. Small drug induced fusion at low drug concentration is a rare event. Only three drugs, namely, meloxicam (Mx), piroxicam (Px), and tenoxicam (Tx), belonging to the oxicam group of non steroidal anti-inflammatory drugs (NSAIDs) have been shown by us to induce membrane fusion successfully at low drug concentration. A better elucidation of the mechanism and the effect of different parameters in modulating the fusion process will allow the use of these common drugs to induce and control membrane fusion in various biochemical processes. In this study, we monitor the effect of lipid headgroup size mismatch in the bilayer on oxicam NSAIDs induced membrane fusion, by introducing dimyristoylphosphatidylethanolamine (DMPE) in dimyristoylphosphatidylcholine (DMPC) small unilamellar vesicles (SUVs). Such headgroup mismatch affects various lipid parameters which includes inhibition of trans-bilayer motion, domain formation, decrease in curvature, etc. Changes in various lipidic parameters introduce defects in the membrane bilayer and thereby modulate membrane fusion. SUVs formed by DMPC with increasing DMPE content (10, 20, and 30 mol %) were used as simple model membranes. Transmission electron microscopy (TEM) and differential scanning calorimetry (DSC) were used to characterize the DMPC-DMPE mixed vesicles. Fluorescence assays were used to probe the time dependence of lipid mixing, content mixing, and leakage and also used to determine the partitioning of the drugs in the membrane bilayer. How the inhibition of trans-bilayer motion, heterogeneous distribution of lipids, decrease in vesicle curvature, etc., arising due to headgroup mismatch affect the fusion process has been isolated and identified here. Mx amplifies these effects maximally followed by Px and Tx. This has been correlated to the enhanced partitioning of the hydrophobic Mx compared to the more hydrophilic Px and Tx in the mixed bilayer.