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FDI in pharma, Indian Govt Clueless

Three ministries pitch for reversal of the current policy


The current FDI regime that allows foreign investment in pharmaceuticals companies has become a bone of contention within the Government. Three Ministries — Finance, Commerce, and Health and Family Welfare — are strongly pitching for urgent reversal of the current policy which they feel threatens access to affordable medicines not only in India but also developing countries, including in Africa.

The Prime Minister’s Office is pitching for continuation of the policy. Incidentally, the Parliamentary Standing Committee of Commerce has recommended a blanket ban on FDI in existing pharma projects and urged that further takeover/acquisition of domestic pharma units be stopped.

“If the policy continues to be implemented in the existing manner, the access to medicine scenario in the country could adversely impact production, availability and prices. India could then be dependent for life-saving medicines either on domestic facilities of MNCs or imports. India is already import-dependent for intermediates and critical drugs like penicillin. About 70 per cent of India’s API/intermediates are imported from China,’’ an internal document prepared for the Cabinet by the Department of Industrial Policy and Promotion (DIPP) states.

Both the Health and Family Welfare and Commerce and Industry ministries have argued that FDI is desirable but it was equally important that major frontline production facilities are not taken over as pharma is a sector impacting life and health of the people.

The concerns of these Ministries come in the wake of major acquisition of Indian pharma companies during the last few years by MNCs. Some of the high profile ones include the acquisition of Ranbaxy by Daiichi Sankyo, Shantha Biotech by Sanofi-Aventis and Nicholas Piramal by Abbott raising concerns about future access to affordable medicines.

“We want a review of the FDI in brownfield projects as this policy would put India and developing countries at the mercy of MNCs,” CPI MP, Gurudas Dasgupta said.


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