Photoswitchable lipids, particularly azobenzene-derivatized phosphatidylcholine (azoPC) lipids, offer a unique mechanism for reversible modification of membrane properties upon exposure to ultraviolet (UV) radiation. Through all-atom molecular dynamics simulations, we explore how UV irradiation-induced trans-to-cis photoisomerization (TCPI) of AzoPC lipid influences the structure and dynamics of a lipid membrane, composed of dipalmitoylphosphatidylcholine (DPPC) and cholesterol with similar composition to that of the DOXIL®. Structural and dynamical analyses of two states of the membrane, 'dark' state (containing cis-azoPC lipid) and 'bright' state (containing 85 % cis-azoPC and 15 % trans-azoPC lipids) reveal that the TCPI reduces membrane packing density and increases diffusivity of lipids. We have demonstrated an enhanced intercalation of doxorubicin (DOX), an anticancer drug, in the 'bright' state of the membrane compared to that in the 'dark' state. This study - elucidating the complex interplay between lipid composition, photoswitching, and lipid-drug interactions - contributes to the design of lipid-based systems for targeted drug delivery and biomedical applications.