Over the last five years, six domestic pharmaceutical operations have been acquired by multinational drug companies, a development that has raised red-flags with authorities at the Centre.
In an effort to tackle such sell-outs, the Commerce Ministry is examining the regulatory action and financial incentives required to be taken in the interest of this “vulnerable” sector, an official familiar with the development told Business Line.
The review, an internal exercise initially, will work with the Health Ministry and the Department of Pharmaceuticals, the official added.
The Ministry would take a close look at the present system of 100 per cent automatic approval for foreign investment in the sector, and see if a more guarded investment policy was required, a source familiar with the development said.
The Government also needs to notify M&A (merger and acquisition) related provisions in the Companies Act to facilitate the scrutiny of the Competition Commission on acquisitions of Indian drug companies by multinationals, points out a joint letter from a group of civil society and patient-support organisations, including the All-India Drug Action Network and Centre for Trade and Development addressed to the top-brass at different ministries, including Health, Commerce, Agriculture and Chemicals and Fertilisers (the apex Ministry for pharmaceuticals).
There are no effective legal or policy tools to address threats emerging from the acquisition of Indian pharmaceutical companies by multinationals, the letter observed, cautioning monopolistic behaviour that would result in increase of the prices of medicines.
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