Union Commerce and Industry Minister, Anand Sharma has sought the intervention of the Prime Minister, Manmohan Singh protesting against the current move to allow foreign direct investment (FDI) in pharmaceutical sector through automatic route pleading this would badly dent the efforts to ensure access of generic drugs to the common man.

Pleading for putting in place a policy, much against the wishes of Planning Commission and the Finance Ministry, to have government control on approval of takeovers in the pharmaceutical sector, Mr. Sharma has written to Dr. Singh seeking a review of the policy to allow 100 per cent FDI through automatic route. The Union Health Ministry has also backed the move by the Commerce Ministry expressing fears that rash takeovers of Indian companies by multinationals would raise the healthcare cost in the country. The Commerce and Industry move has the support of the domestic drug lobby, something which is being strongly opposed by multinational pharmaceutical firms.

The Department of Industrial Policy and Promotion (DIPP) had first raked up the issue on compulsory licensing in August 2010. Following this, the Union Cabinet constituted a committee under Planning Commission member Arun Maira to consider and recommend measures conducive for promotion of Greenfield investments in the sector and for positioning India as a leading quality drug research, development and manufacturing destination.

However, in his letter to Dr. Singh, Mr. Sharma said, “Considerable time has elapsed in the process of constituting the committee and finalising its terms of reference. The deliberations of the committee also appear to be getting prolonged. In the meanwhile, there have been continuing reports of further possible takeovers of Indian pharmaceutical firms by MNCs. I am not asking for a roll-back in the FDI policy, but only a procedural filter.’’

India has seen some big ticket pharma deals in recent years. In June 2008, Japanese drug maker Daiichi Sankyo Co. Ltd acquired New Delhi-based Ranbaxy Laboratories Ltd for nearly $5 billion. Two years later, US-based Abbott Laboratories bought the healthcare solutions business of Piramal Healthcare Ltd for $3.72 billion.

“Since over the last few years, Indian generic drug makers have posed a threat to MNCs, it (acquisitions) is a concerted attempt to blunt the challenge of generics,’’ Mr. Sharma has said.

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