2012 yearender: Drug prices, takeover of Indian cos remained govt focus
Apart from drug pricing, another issue that was of concern to the government was the takeover of Indian pharma firms by multinationals and its impact on the availability of affordable medicines.
Differences between various ministries, including finance on one side and commerce and industry along with health on the other, resulted in a delay arriving at a conclusion. The Prime Minister's Office intervened to finally set the rule that any level of foreign direct investment in an existing domestic pharma company would have to be approved by the FIPB.
Under the new rule, whosoever acquires an Indian firm producing essential drugs will have to continue to manufacture them till the Competition Commission of India is empowered to take a view on such mergers and acquisitions.
In October 2011, a ministerial group headed by the Prime Minister had put foreign investment in brown-field pharma on approval route, changing a 10-year-old policy of automatic clearance.
In the face of the restrictions, Orchid Chemicals & Pharmaceuticals sold various assets, including active pharmaceutical ingredients (API) business and a R&D facility
to the US-based Hospira Inc for USD 200 million (nearly Rs 1,112 crore).
Further, Ahmedabad-based Claris Lifesciences divested 80 per cent stake in its infusion business for Rs 1,050 crore and entered into a tripartite joint venture with two Japanese firms -- Otsuka Pharmaceutical Factory (OPF) and Mitsui & Co Ltd for the same.
Earlier in the year, Bangalore-headquartered Strides Arcolab
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