Study the passage below and answer the questions.
PASSAGE - V
Apprehensive that pharma companies may stop or reduce production of essential
drugs after they come under price control, the Government is mulling steps to
ensure that companies maintain present levels of output of these critical drugs.
Sources said the recent decision to put a price cap 348 drugs was accompanied by a
concern that the manufactures could lose interest in these medicines owing to reduced
margins of profit. It was based on the past experience when the drug price control was
first enacted. The Group of Ministers (GoM) that took the landmark decision directed
the Department of Pharmaceutical to ensure that present production levels were maintained
after the price control. As a follow-up, sources said, the Government could fix
mandatory level of production in these drugs for each company in business. The fear
over companies retaliating with decrease production revolves around the fact the price
control would check profit margins. Once the essential medicines are brought under
the Drug Price Control Order, they cannot be sold at a price highter than that fixed by
the Government. A senior official said, "We will ensure that accessibility and availability
of essential drugs does not go down". The GoM has also decided that the prices
of medicines, which are part of the price control order of 1995 but not in the National
List of Essential Medicines 2011, would be frozen for a year and thereafter a maximum
increase of 10% per annum would be permitted. Out of the 348 medicines, the
prices of 37 drugs are controlled by the National Pharmaceutical Pricing Authority
(NPPA). The Government, through the NPPA, controls prices of 74 bulk drugs and
their formulations.