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The Department of Industrial Policy and Promotion has asked the Prime Minister’s Office to hold an inter-ministerial meeting at the earliest for tightening foreign direct investment norms for brownfield pharmaceutical projects.The calls comes even as a Parliamentary panel report suggested banning such investments.
US pharmaceutical company Mylan’s proposal to invest Rs 5,500 crore for acquiring Indian company Agila has been put on hold following the Department’s stance that without proper safeguards the company would have a stranglehold on the Indian market.
Some measures suggested by the Department to ensure continued supply of cheap drugs in the domestic market include mandating foreign investors to keep producing generic medicines manufactured by the company being acquired at the existing level for five years, a DIPP official told Business Line . Generic drugs are copies of off-patent medicines that are available at a fraction of the price for their patented originals.
The DIPP also wants foreign investors to give complete information on transfer of technology, if any, to ensure that they do not get away by just talking big about technology induction. R&D expenditure on generics, too, should be maintained at existing levels for five years, DIPP has said.
“We have written to the PMO requesting an inter-ministerial meeting on pharma FDI norms soon. We also expect to discuss some of the points raised in the Parliamentary panel report during the meet,” the official said.
A Parliamentary panel, chaired by BJP MP Shanta Kumar, recently suggested a ‘blanket ban’ on FDI in existing pharmaceutical companies, on the ground that it was against public good.
Although the Government had thrown open in 2002 FDI up to 100 per cent in all pharmaceutical projects, a string of acquisition of Indian companies made the Government route FDI proposals in existing Indian drug companies through the Foreign Investment Promotion Board.
The DIPP, however, has now insisted that stringent norms be put in place for such acquisitions as the FIPB has not shown much discretion in clearing such proposals.
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