According to sources, the committee will look into the drug pricing mechanism as there have been complaints that the companies are making significant profits which go up to few thousand percent.

In July this year, while hearing the petition of NGO All ndia Drug Action Network, the Supreme Court had observed that the Centre was fixing maximum price of a medicine above the retail price of the leading company.

"You (Centre) are fixing the maximum price of a medicine above the retail price of the leading company of the same drug. It is absurd," the bench had observed during the hearing.

One of the five issues to be considered by the government relates to NGO's plea that MBP (Market Based Pricing) was never used for any price regulatory purposes and under the new policy, simple average ceiling prices were, in many cases, higher than the market leader price.

"An inter-ministerial committee comprising representatives from DIPP, Ministry of Health, National Pharmaceutical Pricing Authority (NPPA) and Department of Pharmaceuticals have been formed following the Supreme Court orders to look into the pricing of drugs," a source told reporters.

The committee will look into the pricing of medicines, and specifically in the market based pricing formula which is being used at present under DPCO 2013, the source added.

The NGO had in a petition also alleged that the market based pricing was never used for any price regulatory purposes and this was making medicines costlier.

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