NEW DELHI: Prices of a large number of medicines including pain-killers, anti-infectives and cancer drugs may fall 5-10%, while they would also be put under an intensive price monitoring system.

This comes close on the heels of the industry agreeing to cap margins on unbranded off-patent drugs (called generic generics) which would result in prices coming down by over 70% in some cases.

The industry is now finalising a proposal under which prices of some of drugs covered under the National List of Essential Medicines (NLEM) will fall. NLEM includes 354 popular medicines (663 formulations) and covers 27 therapeutic segments including drugs like Paracetamol, Penicillin, Amoxicillin, Ampicillin, Diazepam, Ibuprofen, Quinine, Omeprazol, Calcium and Folic Acid. The NLEM includes 7,000 packs covering all segments in the market — branded, branded generics and generic generics.

Though the industry has agreed to cut prices, the finer details are to be worked out.

The prices announced by the pharma companies will be frozen for a year. The industry and government broadly agreed to a proposal under which the National Pharmaceutical Pricing Authority (NPPA) will be entrusted with more powers to carry out an intensive monitoring of drug prices so that every little change is reported. The emphasis will now shift from cost-based price control to an online monitoring system.

"NPPA needs more teeth for handling unusual rise in prices and to levy penalties when firms exceed a particular band. Firms will not be able to exceed the limit, which is to be decided," sources said adding it will be less than the existing 20% level.