The health ministry has formed a committee that is meeting for the first time on Tuesday to consider raising the number of drugs deemed essential and subject to price caps, people directly involved in the process said.
The panel will consider adding more drugs to the list of essential medicines, all of which would then come under price caps, one of the people said, a move to make them affordable for the 70 percent of people living on less than $2 a day.
The move, if implemented, will draw the ire of global drugmakers like Pfizer Inc, GlaxoSmithKline Plc and Abbott Laboratories, all of which have a large presence in India's $15 billion pharmaceutical industry.
The global drugmakers have already been hit by wide-ranging government-imposed price reductions and a legal system with a history of disallowing patent protection in recent years in an emerging market that is a vital growth driver for the firms.
Bringing more drugs under price controls would dash hopes for an easing of the populist drug policies of the previous government under new, business-friendly Prime Minister Narendra Modi, industry analysts said.
New Delhi last year raised the number of drugs that are subject to price controls to 348 from 74 earlier.
Health Minister Harsh Vardhan and Secretary for the Ministry of Health and Family Welfare Lov Verma did not respond to mails for comment. All the sources declined to be named because the details of the plan are not public.