National Pharmaceutical Pricing Authority (NPPA) may adorn the role of identifying and certifying 'gold standard' companies soon. The proposal, mooted by the Department of Chemicals, is to enable R&D intensive companies go for a higher price band for their scheduled formulations.

According to the proposal, NPPA would determine the eligibility of companies fulfilling gold standards on an annual basis based on the audited data submitted by the companies. The department has proposed a higher Maximum Allowable Post Manufacturing Expense (MAPE) for R&D intensive companies that qualify the 'gold standard' requirements. It has also suggested the formation of a certifying committee and an evaluation committee headed by NPPA to carry out the task.

As per the current understanding, the gold standard companies should spend five percent of their turnover subject to a minimum of Rs 50 crore on R&D It should also employ at least 200 scientists in its Indian research facilities. The other criteria for gold standard eligibility as proposed by the ministry include owing and operating manufacturing facilities that have at least two international regulatory approvals. Number of patent filings, presence of industry-institution linkages would all help companies achieve 'gold standard' status.

With the eligibility criteria proposed to be renewed from time to time, only a handful of Indian companies may get through the final scrutiny.

Promotion of R&D in pharmaceutical sector by suitable incentives and encouraging public-private-partnerships are among the high priority areas of the central government. The proposal for 'gold standard' was first made by the Mashelkar Committee few years ago.