The Drugs and Pharmaceuticals (Prices Regulation and Management) Act being planned by the Central Government may prescribe a two-pronged approach to regulate the prices of essential drugs in the country.

The Act, which intends to replace the subordinate legislation Drugs Prices Control Order (DPCO), is to have specific sections dealing with price control of patented drugs. The Act may also necessitate the setting up of a Settlement Commission to take up the cases hitherto handled by the Drug Prices Liabilities Review Committee. The ministry of chemicals and fertilizers is known to be working overtime to give finishing touches to the draft bill.

According to ministry sources, the proposed Act may draw heavily from the Pharmaceutical Policy 2002 on the criteria to be followed to bring drugs under price control. The Settlement Commission that is to succeed DPLRC would be asked to handle all pending cases of overcharging. The government is known to be in favour of a three-member commission to settle all cases and complaints with regard to overcharging of drugs that comes under price control. The DPLRC had furnished its recommendations in 50 cases for taking further necessary action to recover the due amounts. In all the remaining cases, the companies concerned have either obtained individual interim stay orders from the High Courts or have claimed that their cases were covered by the Interim Stay Order dated 30.06.1997 of the Bombay High Court obtained by the Organisation of Pharmaceutical Producers of India (OPPI) and Indian Drugs Manufacturers' Association (IDMA) restraining the Department of Chemicals & Petrochemicals as well as DPLRC from issuing fresh notices to the companies with regard to DPEA liabilities under Drugs (Prices Control) Order, 1979. Even out of these 50 cases, companies in 18 cases have moved various High Courts and obtained stay orders.

At present, there are 32 cases pending with the Drug Prices Liabilities Review Committee (DPLRC) including 22 cases held up because of the court stay. Once the Commission is set up, all the cases would be transferred to it.

The new Act is to make sure that National Pharmaceutical Pricing Authority (NPPA) remains the monitoring authority and Settlement Commission becomes the review authority.