Drugmakers Ask Government to Allow FDI in Pharma Sector.

MUMBAI: India's leading lobby group of drugmakers has asked the government to allow foreign direct investment in the sector, less than a year after it demanded curbs on increasing takeovers of domestic companies by global giants.

"Companies have seen the benefits of getting acquired by multinational pharma companies. Some of us are asking the government to allow FDI in greenfield companies," said Daara Patel, secretary-general of the Indian Drug Manufacturers Association (IDMA). He said a difference of opinion had emerged within the group.

The change of heart comes ahead of the release of a report by the panel set up to study a proposal to reduce the FDI in pharma sector from 100% to 49%.

The government had set up the panel headed by Planning Commission Member Arun Maira soon after the IDMA, along with another lobby group, Indian Pharmaceutical Alliance, wrote to the health and commerce ministries seeking a policy intervention to stem the spate of foreign takeovers.

The IDMA had expressed the widespread apprehension prevalent within the domestic industry at the time that MNCs would soon come to monopolise the pharma sector in the country. Fears of a foreign takeover of the sector were triggered after bigticket acquisitions of halfdozen Indian companies, including Ranbaxy Laboratories and Piramal Healthcare.

That the domestic industry has reviewed its reservations since became starkly evident in August when the country's oldest pharma company, Cipla, shifted its stance on the issue. "When Indian companies can go abroad and acquire 100% in a company, why should we have a different regulation here?" YK Hameid, the chairman had asked at Cipla's annual general meeting, adding "there should be enough regulations like compulsory licensing that protects Indian firms".

Source : economictimes.indiatimes.com