The new watchdog will offer technical help to the State Drug Controllers and the NPPA to monitor notified prices of medicines, detect violation of the provisions of the DPCO, look at price compliance, collect test samples of medicines, and collect and compile market-based data of scheduled as well as non-scheduled formulations.

Pharma companies have been accused of overcharging prices of drugs in the scheduled category fixed by the DPCO and those outside its ambit too.

The suggestion to set up PMRUs was made against the backdrop of the lack of a field-level link between the NPPA and the State Drugs Controllers and State Drug Inspectors to monitor drug prices.

States and UTs have been classified into three categories for staff recruitment and infrastructure.

Kerala falls in the second category, having a population of less than 3%, but more than 1% of the total population of the country.

The State will have a project coordinator, two field investigators, and two data entry operators. The unit is expected to help the State Drugs Control wing, which is hit by severe staff shortage, and regulate drug prices more effectively.

Highly placed sources say that about Rs. 10,000 crore worth medicines are sold in Kerala in a year. Official data on drug purchases for public institutions were not disclosed.

Mr. Menon said that the NPPA had fixed the prices of around 1,000 drugs and the unit would track if buyers were being overcharged. It would also check if pharma companies were hiking the prices of non-scheduled drugs by more than 10% a year. “We need to also check if there is any shortage of essential medicines. There is also a plan to collect data on the prices of surgical devices and stents in the market,” he said.