The government should emulate the recent FDI policy approach of multi-brand retail sector while taking a final decision on whether and how the inflow of foreign investment in the pharma sector should be regulated, according to some of the top domestic drugmakers.
In a letter to Arun Maira, head of the high-level inter-ministerial committee constituted to decide on FDI in the pharma sector, the Indian Pharma Alliance (IPA), an industry body association representing leading domestic pharma firms, has urged the government to borrow a few lessons from the proposal cleared by the committee of secretaries for FDI in the multi-brand retailing.
Two months back, the concerned committee favoured allowing FDI in the multi-brand retail sector while restricting the limit at 51%. However, a slew of riders have been attached alongside. A minimum investment of $100 million for entry of FDI in the sector, commitment of 50% of their investment to building back-end supply chains, sourcing atleast 30% of goods from local producers, ensuring at least 30% of sales to small traders at the wholesale level are some of the preconditions for allowing investment imposed in the proposal.
“Why is then the high-level committee shying away from emulating this example for a very sensitive sector affecting lives of people to make a distinction between the greenfield and the brownfield investments?” DG Shah, secretary general, IPA wrote to Maira a few days back.
The letter asserts that it is too early to draw conclusive assessments on the impact of recent acquisitions by pharma MNCs on competition, prices of medicines and availability on the basis of current data. “Besides, no attempt is made to reflect on potential impact of more acquisitions. The committee will be failing in its duty to the people, if it does not anticipate shape of things to come with unbridled freedom to MNCs for takeovers of the Indian companies,” the letter says. It contests the way ‘availability of drug’ has been measured by the Maira Committee.
“The number of new formulations introduced can by no stretch of imagination be used as evidence of ?availability?. What is important for the public health is availability of existing medicines used in the first line treatment. Hence, the data furnished should have been about products discontinued, and not introduced,” the letter says.