Tougher foreign investment norms for pharmas |
The government of India is contemplating tougher foreign investment norms for multinational firms to acquire existing pharmaceutical facilities in India. The new draft pharma policy lists out a range of measures such as continuation of manufacturing of essential medicines, expenditure on R&D and technology transfer to seek approval for foreign direct investment (FDI). Thisis significant as it comes after the government in June 2016 allowed up to 74% FDI in brownfield projects through automatic route, with an aim to promote investment in the sector. At present there is no mechanism or system to monitor the post-acquisition (FDI) activities of the company. A system would be developed to monitor the adherence to these conditions. The draft highlights how many neighbouring countries like Vietnam, South Korea, Sri Lanka and Bangladesh are emerging as generic drug manufacturers and posing competition to India. India, which is known for its ability to supply low priced quality generic medicines, is witnessing a decline in its compounded annual rate of growth in the pharmaceutical industry. It has seen a decline from 14.36% in 2010-11 to 8.68% in 2014-15.
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