The consolidated
FDI policy of India 2012 by DIPP is proactive on many counts and it
covers vast areas of public importance. One such area pertains to FDI in
pharmaceuticals sector of India.
Recently, India
has been taking special interest in FDI in
pharmaceutical companies producing life saving drugs in India. This
is also somewhat controversial and complicated in nature. Many FDI proposals in
this category are still pending to be cleared by Indian government and its
agencies.
In order to expedite the pending
FDI proposals for pharmaceutical industry of India,
the Indian government is planning to announce fresh norms and rules in this
regard next week.
The Foreign Investment Promotion
Board (FIPB) in its meeting on July 20 is planning to consider FDI proposals
for the pharmaceutical sector. It is also expected that the Department of
Industrial Policy and Promotion (DIPP) would notify the new rules soon as the
inter-ministerial group (IMG) has finalised its recommendations.
IMG has addressed concerns of the
health ministry and recommended stiff riders defining the quantity of generic
drugs that foreign companies manufacture in India.
Further, it has prescribed norms for higher investment in research and
development activities by such companies. It has also suggested doing away with
the mandatory clause of technology transfer by the foreign company in
brownfield investment.
In a significant and parallel
development, Unites States has accused India of WTO rules violations. The
accusation arose out of the activities of Hyderabad-based Natco Pharma that is
making generic version of cancer drug Nexavar.
India
government has invoked the compulsory licensing provision that allowed Natco to
sell Nexavar at a price not exceeding Rs 8,880 for a pack of 120 tablets
required for a month's treatment as compared to a whopping Rs 2.80 lakh per
month charged by Bayer for its patented Nexavar drug. India
has also defended its stand and claims that its decision does not violate any
WTO norms.
