The government is planning to issue an advisory to drug companies if they do not pass on the excise duty benefit to the consumer. The advisory may be in the form of guidelines issued to companies that they must reduce drug prices by 4-5%, taking into account the Budget proposals. Significantly, the guidelines would cover the entire industry, including the non-scheduled drugs (outside government control). The Budget has slashed excise duty on drugs from 16% to 8%, while the Cenvat has gone down by 2% to 14%. The abatement available on maximum retail price on payment of excise duty on medicines has been reduced from 42.5% to 35.5%. Prices of medicines, including the 74 scheduled drugs, under DPCO (drug price control order) 1995 should go down by 4-5%, according to the initial estimates worked out by the government. "We can ask the industry to reduce prices as there is lack of clarity amongst the drug companies on the exact quantum of decrease,' sources said. This is one of the options being considered by the government. It may also try to meet the industry associations before issuing some sort of a directive on the prices. However, a final view on the matter will be taken by the chemicals minister, Ram Vilas Paswan over the next few days. Paswan has already expressed hope after the Budget that all drug producers will pass on the excise duty benefit to the consumer. Drug regulator, NPPA is also working out the exact reduction in the prices of scheduled drugs, and is expected to issue the notification soon. Drug companies are still working out the net impact of the excise duty reduction. Some companies including Zydus Cadila have revised prices of scheduled medicines with effect from March 1. Ranbaxy said most of its drugs are manufactured in the excise-free zones, so there would be no impact of Budget proposals.