Taking note of the Union Health Ministry's reservations over the existing policy of Foreign Direct Investment (FDI) in the pharmaceutical sector, over concerns that it was undermining the government's efforts in making the generic version of drugs available at affordable prices, Prime Minister Manmohan Singh has decided to convene a high-level meeting to look into the issue.
The meeting, scheduled for October 10, will be attended by Union Minister of Health and Family Welfare Ghulam Nabi Azad, and Commerce Minister Anand Sharma. Finance Minister Pranab Mukherjee is also expected to participate.
It will take into account the report of a high-level committee, headed by Planning Commission member Arun Maira, which is already looking into all aspects of the FDI policy for the pharmaceutical sector and is expected to come up with its report in the next two weeks.
Although the Ministry has not been demanding a lowering of the permissible FDI, it has been pitching for safeguards to be built into the FDI process to check the rising trend of multinational companies taking over Indian pharmaceutical firms. It recommended that prior approval of the Foreign Investment Promotion Board (FIPB) be made mandatory to ensure a degree of supervision.
Currently, 100 per cent FDI is allowed in the pharmaceutical sector, and the policy is being reviewed in the wake of fears about the impact of ‘brownfield' investments.
