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New Delhi: Concerned over the recent takeover of some firms by MNCs, the domestic pharmaceutical industry has asked the government to protect and promote it by making funds available for research and development.
In a letter to the department of pharmaceuticals, Indian Pharmaceutical Alliance (IPA) has said lack of available funding is the main reason for the recent spurt in the sale of stakes in domestic companies.
“In view of your concern and interest in promoting growth and development of pharmaceutical industry, we urge you to examine this phenomenon and consider appropriate funding mechanism to protect and promote the domestic industry,” IPA said. Since June last year, multinationals have acquired six drug companies, including the Rs 22,000 crore takeover of Ranbaxy Laboratories by Japanese drug maker Daiichi Sankyo. According to industry experts, drying up of product pipelines of MNCs are forcing them to buy up Indian firms to a get a hold on the generic business globally. Of late, there have been reports of majors like Pfizer scouting the Indian market for acquisitions.
The association said the sell-outs have highlighted the need for an “appropriate funding mechanism” to meet the challenges faced by Indian pharma companies. Also, these have exposed the limitations of the current policy framework of providing weighted deduction for R&D and meagre amounts granted under Market Development Assistance programme, it said. Later, Germany drugmaker Fresinious Kabi acquired Dabur and Pfizer took over of Vertex Animal Health. After that Vetoquinol SA France acquired the animal healthcare subsidiary of Wockhardt, which also sold its nutritional business to Abbott. “Almost all sales of stake were driven either by paucity of funds to run the ongoing business or by enormous challenges faced by the domestic industry,” IPA said. However, IPA general secretary DG Shah clarifed that the industry is not seeking any protection from the government.
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