Comments
Concerns on the country’s “health security” can wait for another day. Or so the Government seems to have spoken, after it decided to moth-ball and put away its earlier fears on foreign companies taking over Indian drug-makers.
Taking a complete u-turn from its earlier stance, the Government’s decision to not bring in curbs on local acquisitions of drug companies by foreign owners was conveyed by Commerce Minister Anand Sharma on Friday, after the previous day’s Cabinet meeting.
But the same Government had gone into a huddle in August 2010, after about six domestic drug companies were bought, either entirely or in parts, in a period of just five years.
The high-profile exits included Ranbaxy’s buy-out by Daiichi Sankyo, Shanta Biotech by Sanofi Aventis and Piramal Healthcare’s domestic formulations business by Abbott.
Health advocacy groups raised red-flags on selling the “family silver”. And soon enough, the Commerce Ministry sought opinions from the industry on having a gate-keeper to ensure that the country did not entirely lose its ability to make medicines for its citizens.
Gate-keepers
With the Ministries of Health, Chemicals and Fertilizer (that governs the pharmaceutical sector) and Commerce batting for curbs on local buy-outs – the toss-up was on who would be the gate-keeper – the Foreign Investment Promotion Board (FIPB) or the Competition Commission of India (CCI).
The FIPB was tasked with watching over acquisitions in the sector, as it was seen to be better equipped to understand health needs of the country, as opposed to CCI that looked at it through a “competition” lens.
Even Health Minister Ghulam Nabi Azad added his voice to those calling for curbs on acquisition of local drug companies. The sector was seen as strategic to keeping medicines affordable in India and other countries across the world.
Multinational drug makers, though not sharing the view that drug prices would increase if foreign companies bought local ones, had nevertheless braced themselves for having curbs in the sector.
Discussions doing the rounds included filters on investing in niche areas like vaccines; besides steps to ensure companies continued to make essential medicines, and step up investment in local research.
Given its own concern in the past, the Government seems to have chosen to put current account deficit worries over the nation’s health security, said a veteran domestic-industry representative, voicing the surprise several industry representatives are expressing, at the Government’s volte-face.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.