The central government will set up monitoring committees to check irrational pricing of basic drugs.

Chemicals and Fertilisers Minister Ram Vilas Paswan Wednesday said the government would consider setting up two monitoring committees to scan production of basic or generic drugs that were hitherto excluded from price control.

The move to set up the panels followed the recommendations made in the Oct 31 interim report submitted by the committee constituted by the department of chemicals and petrochemicals to review span of price control, including trade margins for medicines.

While prices of normal or scheduled drugs went up by only one percent every year, the prices of generic and other non-scheduled drugs were arbitrarily hiked by about 10 percent, Paswan noted.

He said the committee's report felt the need for forming a "basket" of drugs from the 354 bulk drugs listed in the National List of Essential Medicines 2003 for monitoring and maintaining reasonable prices for essential medicines.

Paswan said the committee had also recommended checking the trade margins for generic drugs, which sometimes exceeded 1,000 percent or even more.

"The committee has recommended that for scheduled drugs, the present norm of trade margins (of eight percent for wholesalers and 16 percent for retailers) should continue.

"In case of non-scheduled drugs, the recommended margins for generic drugs were 15 percent and 35 percent for wholesalers and retailers respectively," he said, reading out the committee report.

Paswan allayed apprehension regarding increase in prices of patented drugs with the advent of the patent regime in January 2005, saying whenever a patented drug is introduced, its price would be negotiated to keep it at a reasonable level.

The committee would make its final recommendations in a month, he said.

--Indo-Asian News Service