In his keynote address at the 32nd annual general meeting of the Organisation of Pharmaceutical Producers of India (OPPI) here on Saturday, Kelkar suggested that drugs under the open general licence and those that have been off-patent for at least three years could also perhaps be removed from the purview of the Drug Price Control Order (DPCO). "All new drug delivery systems may also be outside price control. Post decontrol, there could possibly be an incentive to reduce prices of the drug and if price hikes go beyond a certain level they must be brought back under DPCO," he said.

Kelkar, who has been the chairman of the Bureau of Industrial Costs andPrices (BICP), is the architect of the "Inclusion/Exclusion Criteria" report on drug price control (popularly referred to as the Kelkar Committee report).Kelkar also said that the industry and the government could work jointly towards establishing an "output-linked incentive" scheme to encourage research and development.

For example, the first five new molecules developed by the industry could possibly be given a 50 per cent grant from a joint resource pool of the government and the industry, he said.

In response to specific queries from the industry, Kelkar said that there was a need to move away from subsidy support, even as output-based incentives may be considered. "We could even consider allowing tax-free royalty income," he said.

Earlier, union minister of state for chemicals and fertilisers AK Patel said that while successive Drugs (Prices Control) Orders have simplified and rationalised the system, the government will not be averse to consider further modifications in response to changes in theenvironment.

Patel said that drug price control is not only resorted to in India but all over the world. "In a country like India, where general poverty and wide disparities in levels of income exist, and health insurance and state social security coverage is inadequate, special efforts are required to ensure the availability of medicines of good quality at reasonable prices. The DPCO is one such instrument to achieve this objective," he said.

He added that the National Pharmaceutical Pricing Authority (NPPA) had been given directions to bring about a greater degree of transparency as well as objectivity in price-fixation matters.

Meanwhile, outgoing OPPI president D Bhadury urged the government to expeditiously settle the long-standing issue of Drug Price Equalisation Account (DPEA) claims even while he stressed the futility and counter-productive character of the current rigid price control regime. The Glaxo and Burroughs Wellcome managing director and current OPPI vice-president will now take chargeas president of the organisation.

Bhadury also supported the need for a strong patent protection in the Indian market as the strength of IPR could be a deciding factor for investment decisions by research-based pharma companies.