MUMBAI (REUTERS) - India's Supreme Court said a group seeking to lower drug prices should be allowed to petition the country's government to review its pricing policy for medicines deemed essential, according to a court order published this week.

The Indian government currently caps the prices of hundreds of essential drugs. But the All India Drug Action Network (AIDAN), a group of NGOs, has argued in a series of public interest suits filed over the past decade that prices are fixed at very high levels, which makes drugs unaffordable for many.

AIDAN also opposes the exclusion of many life-saving and patented drugs from the country's list of essential medicines.

Drug prices are a contentious issue in India, where a majority of people live on less than US$2 (S$2.75) a day.

According to the court order, the government argued in the case that the list of price-capped drugs was "reasonably"comprehensive, although it also agreed to consider new applications. "We see no reason why the petitioners cannot be permitted to file a fresh representation," the court said in the order, dated July 15, asking AIDAN to file its papers within six weeks.

The court said the government should then "afford the petitioners an opportunity of being heard".

The government will have six months to respond.

Wide-ranging price cuts over the past year have hit both local and foreign drugmakers in India and have been opposed by many in the industry, who have said drug prices in the country are already among the lowest in the world.