The industry for its part is unhappy with the manner in which prices are controlled with no allowances for ability to pay (both the rich and the poor pay the same) or even investment in quality. Ranjit Shahani, vice-chairman and managing director of Mumbai’s Novartis India cites the example of its anti-epilepsy drug Tegretol. The drug, carbamazepine, is under price control. Shahani says that the NPPA has pegged its price to the cost of Chinese raw material that some copycat makers use. But Tegretol, he says, uses more expensive Indian-made material because it contains no traces of bromine, an impurity that is known to trigger epilepsy. “What should I do, buy from China?” he asks.

Companies at the receiving end of the NPPA’s latest notices are crying foul. They believe that free pricing is important to generate funds for drug research. Swati Piramal, director of Mumbai-based drug maker Nicholas Piramal, says that medicines outside control subsidise the ones in it. “Otherwise, where is the money for R&D going to come from?” she asks. Last year, the Rs 2,500-crore Nicholas Piramal spent Rs 130 crore in finding new cures for diseases like cancer in response to India’s move to a drug patents regime. There is another problem says Ramesh Adige, an executive director at Gurgaon-based Ranbaxy Laboratories. The NPPA has revised the 20 per cent permissible increase in price per year to 10 per cent, with retrospective effect. “That is unfair, the industry may have to evaluate options,” says Adige.

The pricing authority’s actions bring to a head a three-year battle that the industry has fought with Union minister for chemicals and fertilizers Ram Vilas Paswan. The minister has been threatening to bring 354 drugs under price control through a new pharma policy. The industry accuses him of trying to earn political dividend by publicly flaying them for profiteering. And it has lobbied hard to preempt the minister from carrying out his threat. “The industry is united against expanded and intrusive price controls,” says Adige. The policy is now out of Paswan’s hands and rests with a group of ministers (GoM) appointed by the PM.

This is not a good sign. Since 1999, the entire pricing debate has been caught in a web of committees. The GoM, led by Union Agriculture Minister Sharad Pawar, is the fourth committee in eight years charged with the task of giving India a workable drug pricing policy.