The Opposition party termed the government's move as "anti-people and anti-national" and demanded that it withdraws the decision as it will only profit corporate houses and pharmaceutical giants in India and the US.
Congress said Prime Minister Modi, who is travelling to the US, has extracted a "very heavy price" from the country's "poor and ailing" for "PR exercise".
However, the government had on September 24 said it has not withdrawn powers delegated to NPPA but only internal guidelines issued by the drug price regulator to cap prices of non-scheduled drugs have been rolled back.
"The Union of India and NPPA which have been made respondents, after careful consideration in consultation with the (ministry of) Law and Justice had decided to convey to the Hon'ble Courts that the guidelines dated 29.05.2014 are to be withdrawn," the statement said.
Briefing reporters at the AICC headquarters here, former Union Minister Srikant Jena said, "Because of the UPA policy, the price of a cancer drug Tab Glevec came down from over Rs one lakh to just Rs 8,500. Now the prices will go back to the same old stage. There is tremendous pressure by MNCs to play havoc in the country."
"They have withdrawn that internal circular which had empowered the NPPA in the public interest. The government must act and withdraw the decision immediately."
Congress General Secretary Ajay Maken said that while this move will "get Modi good PR and earn the corporate houses undeserved profits, the common man - the middle and lower class Indian - will be left devastated by the sheer insensitivity of this move".
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