The Indian state of Kerala, in the southwest of the country, has announced that new drugs which are not covered by official price controls will be denied a marketing licence if their prices are higher than the cheapest product available in the state in their drug category.

Kerala has taken this step as plans by India’s central government to widen official price controls on essential drugs from the current 74 to include a further 354 products continue to meet delays, due to opposition from the industry. In addition, drugmakers operating in Kerala will not be able to increase their price of any medicine there without prior permission from the state Drugs Controller, although they will be able to reduce prices as they wish.

The state policy was introduced on December 1, 2007, and manufacturers have been given until March 21 to provide the state Drugs Controller with pricing details of every medicine product sold in Kerala. After that, the firms will be required to provide updated pricing information every six months. The government is now collecting point-of-sale data and says it will monitor the market with frequent inspections of pharmacies.

In other moves announced in late December, Kerala’s Drugs Control Department held a meeting with pharmaceutical manufacturers at which they asked them to reduce the Maximum Retail Prices of life-saving medicines which are not under official price controls. In addition, the state government said it is planning to introduce a list of essential medicines, backed up by education campaigns for health care professionals and consumers, in order to counteract the “influence” of pharmaceutical manufacturers.

With around 31.8 million people, Kerala accounts for nearly 3.5% of India’s total population. Keralans have the highest life expectancy in the nation and a larger aging population than the national average and, at a value of more than 1.5 billion rupees a year and with over 35,000 individual drug products available, the state’s pharmaceuticals market is one of the largest in the country.