The government machinery once again started the exercise of working on the new pharmaceutical policy under the leadership of Sharad Pawar who heads a Group of Ministers for the purpose. Pawar and his team came into the picture after the policy draft, prepared by Union chemicals ministry, was strongly objected by the industry and when Union cabinet decided to refer it to a GoM in January last. The first meeting of the GoM with the officials of the chemicals ministry took place last week. The meeting, as expected, was inconclusive. There could be at least three or four meetings spread over three months to prepare the fresh draft. The new policy making, started in 2002, has never been so tumultuous with several inter ministerial discussions and interventions as happened this time. The simple reason for this deadlock is the two diametrically opposite stands taken by the industry and the government. The chemicals ministry is obviously concerned over the increased number of essential drugs launched in the market after the 1995 DPCO was notified. Nearly 500 drugs are currently outside price control in the country and many of them are essential. With huge promotional costs and trade margins loaded on to these drugs, their prices are usually unaffordable to a large majority of Indian population. The ministry, therefore, thinks that there should be a proper expansion of the basket of price controlled drugs in the new policy in consideration of the changes in the disease profile of the country. Use of cardiovascular, diabetic, cancer and psychotropic drugs is no more restricted to affluent classes only but also by middle class and poor. The stand of the ministry, thus to raise the span of price control to 260 drugs including the 74 already under the 1995 DPCO, is with this objective. Two other considerations also have led the ministry to come to this position. One is the Supreme Court directive of 2003 asking the central government to bring all NLEM drugs under price control. Second is the government's own assessment of high prices of several drugs prevailing in the country. The ministry has the records of overcharging of several price controlled drug formulations by over two dozen companies during the last 10 years. The total overcharged amount is in the region of Rs 800 crore. Pharmaceutical industry, on the other hand, is totally against increasing the span of price control to 260. They feel that the ministry is reversing the policy of progressive liberalization of price control so far and that too at a time when the industry is on a globalization drive. They are of the view that unlike other industries, pharmaceutical sector needs huge amounts of money to invest in new drug discovery and that is possible only under a regime of price monitoring. The balance sheets of large pharma companies are showing increased spending on new drug discovery research and other R&D activities. The industry's argument do make some sense. Despite the claims of heavy expenditure on R&D, pharma companies are making better profits than companies from other sectors. Considering all these, government has to do a balancing act without disappointing the patient community on the one hand and pharmaceutical companies on the other.