Get Even More Visitors To Your Blog, Upgrade To A Business Listing >>

Tougher foreign investment norms for pharma companies likely

NEW DELHI: In a move to protect the Indian drug manufacturing sector, the government is contemplating tougher Foreign Investment Norms for multinational firms to acquire existing pharmaceutical facilities in India.

The new draft pharma policy lists out a range of measures such as continuation of manufacturing of essential medicines, expenditure on R&D and technology transfer to seek approval for foreign direct investment (FDI).

This assumes significance as it comes after the government in June 2016 allowed up to 74% FDI in brownfield projects through automatic route, with an aim to promote investment in the sector.

“At present there is no mechanism or system to monitor the post-acquisition (FDI) activities of the company. A system would be developed to monitor the adherence to these conditions,” the new draft policy says.

The draft highlights how many neighbouring countries like Vietnam, South Korea, Sri Lanka and Bangladesh are emerging as generic drug manufacturers and posing competition to India. India, which is known for its ability to supply low priced quality generic medicines, is witnessing a decline in its compounded annual rate of growth in the pharmaceutical industry. It has seen a decline from 14.36% in 2010-11 to 8.68% in 2014-15. This is significant also because pharmaceutical industry is the third largest export revenue churner for India.

“The competitive advantage is being undermined through another route – the acquisition of Indian companies by foreign companies. Countries that are traditionally not strong in manufacturing formulations have started acquiring formulation-manufacturing plants/companies through automatic and government approval route,” the draft policy document says.

Officials say since manufacturing in India is cheaper and most of the facilities have state-of-the-art infrastructure, foreign firms acquire these units and then stop manufacturing drugs for use in India.

Source : timesofindia

This post first appeared on Daily Kiran, please read the originial post: here

Share the post

Tougher foreign investment norms for pharma companies likely


Subscribe to Daily Kiran

Get updates delivered right to your inbox!

Thank you for your subscription