28 Jul 2012

FIPB Postpones Pharmaceuticals Sector FDI Proposals In India

The Foreign Investment Promotion Board (FIPB) of India was planning to consider the FDI proposals for the pharmaceutical sector in India in the last meeting. However, as per media reports, FIPB has postponed all the foreign investment proposals in the pharmaceuticals sector of India. The applications of foreign pharmaceuticals firms cannot be cleared in these circumstances.

Interestingly, a department of industrial policy and promotion (DIPP) representative told FIPB that commerce minister Anand Sharma is also in agreement with postponing of the FDI proposals.  This has taken the applicants for a surprise as the guidelines were finalised with DIPP's consent and FDI proposals in the pharmaceuticals sector are being cleared by FIPB, as sought by DIPP. The new guidelines are now awaiting approval of the Prime Minister's Office.

It has been suggested by the panel that conditions such as commitment by the buyer to manufacture and make available essential drugs post acquisition for five years and also to increase research and development (R&D) expenditure by 5% for diseases prevalent in India must be imposed to allow foreign firms buy Indian companies. It left it to DIPP to decide if the riders be imposed for acquisition of more than 49% of management control.

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. India has been taking special interest in FDI in pharmaceutical companies producing life saving drugs in India. This is more so when the mergers and acquisitions (M&A) and foreign direct investments (FDI) in pharmaceutical sector of India are on hot list.

India is also planning to reduce prices of expensive patented drugs to make medicines affordable to its predominantly poor population. In fact, a committee has already finalised a proposal in this regard and it will put it out in the public domain in a month or so. There could be reference pricing system (for patented drugs) or fixed-pricing, but a final decision has not been taken.

These steps have been taken in addition to India’s stand to provide medicines at a more affordable price after it announced earlier this month that it would implement a $5.4 billion plan to provide free generic medicines to its people.

Internationally, a system of reference pricing for medicines exists across developed markets such as the United States and Europe as well as in emerging markets.

25 Jul 2012

Patents Registration In India

Patents registration in India is a complicated process that requires thorough knowledge of Indian Patent Act and other legal formalities. Once registered, patents confer tremendous tangible and intangible benefits. It is always required to get your inventions patented as soon as possible without public disclosure of the same.

The starting point for the same is to file a patent application at the concerned patent office of your jurisdiction. After filing of the patent application, a request for examination is required to be made by the applicant or by third party and thereafter it is taken up for examination by the patent office.

Usually, the first examination report is issued and the applicant is given an opportunity to correct the deficiencies in order to meet the objections raised in the said report. The applicant must comply with the requirements within the prescribed time otherwise his application would be treated as deemed to have been abandoned. 

When all the requirements are met, the patent is granted and notified in the patent office journal. However before the grant of patent and after the publication of application, any person can make a representation for pre-grant opposition.

Once a patent is granted, a patentee enjoys exclusive right to prevent a third party from an unauthorised act of making, using, offering for sale, selling or importing the patented product or process within the country during the term of the patent. A patented invention becomes free for public use after expiry of the term of the patent or when the patent ceases to have effect on account of non-payment of renewal fee.

14 Jul 2012

New FDI Norms And Regulations For Pharmaceutical Sector Of India 2012

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.

4 Jul 2012

FDI In Pharmaceutical Companies Producing Life Saving Drugs In India

Mergers and acquisitions (M&A) and foreign direct investments (FDI) in pharmaceutical sector of India are on hot list. Even the consolidated FDI policy of India 2012 has liberalised many concepts regarding these areas. However, with these flexibilities and permissions, India must take care of all anti competitive and anti national activities as well.

For instance, it has been anticipated that multinational companies may slow down production of essential medicines after they acquire Indian pharmaceuticals companies. This may affect the national interest of India in general and public health in particular. Now Indian government has decided to build stringent safeguards to ensure availability of life-saving drugs even after such acquisition.

An inter-ministerial group set up by the finance ministry to consider new norms for clearing foreign direct investment (FDI) proposals in the 60,000-crore pharmaceutical sector has recommended incorporation of a stringent clause that mandates that the Indian companies shall continue to make and sell the essential drugs in India even after they are acquired by a foreign company.

The current policy allows 100% FDI in the pharmaceutical sector, but after a spate of acquisitions in the sector that raised fears of MNCs neglecting Indian interests, the government has decided to put brownfield investments in the sector on the automatic route.

Till now foreign investment promotion board (FIPB) of India is only empowered to examine proposal from the stand point of the Foreign Exchange Management Act and the FDI policy. The new guidelines will help it scrutinise foreign investments in existing companies from a public health perspective.

There is a chance that the government could also require that FIPB continue to look at the FDI proposals in the sector even after the oversight on mergers and acquisitions in the sector passes over to the Competition Commission of India.

2 Jul 2012

HIPAA Compliances in India: A Techno Legal Perspective

Health Insurance Portability and Accountability Act of 1996 (HIPAA) is one of the most important health related legislations of United States (US). HIPPA ensures health care coverage, privacy protection, electronic information security, and fraud prevention regarding health care related issues.

Although we have no dedicated laws like HIPPA in India yet many outsourcing related services and assignments are still sent to India. Outsourcing of healthcare services to India, such as medical transcription, medical billing medical coding and medico-legal services involves the transfer and maintenance of important data are some of the areas that are managed by Indian BPO/LPO/KPO service providers of India.

However, HIPPA outsourcing services have also brought many techno legal risks that BPO/LPO/KPO service providers must take care of. Further, privacy, data security and cyber security issues have also made the scenario complicated.

Perry4Law firmly believes that these techno legal risks and compliances must be taken seriously by all stakeholders. We also believe that Indian government must pay more attention to areas like privacy, data security, data protection, cyber security, etc.

HIPPA compliance in India cannot be achieved till professionals are provided techno legal trainings regarding HIPPA. Perry4Law Techno Legal Base (PTLB) has been providing various techno legal trainings in India and abroad that include HIPPA trainings in India as well.

HIPPA compliance in India would also be required to be ensured by pharmaceutical e-commerce providers of India. Besides fulfilling the legal requirements for starting e-commerce business in India, medicines and drugs e-commerce providers of India must also comply with the requirements pertaining to websites opening in India. Cyber law due diligence in India is also required to be fulfilled by HIPAA stakeholders of India.

We hope all stakeholders would ensure HIPPA compliances in India in true letter and spirit.