Restricting FDI in pharma will be retrograde step: OPPI
NEW DELHI: The Organisation of Pharmaceutical Producers of India (OPPI) today said any move to contain FDI in the pharma sector will be a “retrograde step”.
Asserting that acquisition of domestic firms by global counterparts will not result in increased drug prices, the OPPI noted that Indian companies have also been making overseas acquisitions.
“Any move to contain FDI in the pharma industry will be a retrograde step,” OPPI President Ranjit Shahani told PTI.
He, however, welcomed the recent statement by Commerce and Industry Minister Anand Sharma that 100 per cent FDI in new projects would continue to be allowed through the automatic route.
“Business will gravitate to where there is value and the stance of the Indian government for 100 per cent FDI in greenfield projects is a welcome move,” he said.
Allaying fears that acquisition of domestic pharma companies by MNCs will lead to drug price escalation, Shahani said: “We have a very strong price control authority, the NPPA, who closely monitors the prices of every single drug, effectively acting as a deterrent on any runaway pricing.”
Domestic pharma companies, spearheaded by the Indian Drug Manufacturers Association (IDMA) and Indian Pharmaceutical Alliance (IPA), had raised concerns that the takeover of Indian companies by foreign firms could lead to a situation of over-pricing of drugs and marginalisation of homegrown firms. This view was also endorsed by the health ministry.
In 2008, Japan’s Daiichi Sankyo acquired a majority stake in Ranbaxy Laboratories , while Abbott Laboratories acquired Piramal Healthcare’s domestic formulations business last year.
Shahani, however, said it has not been a one-way traffic. “Indian firms, according to an E&Y report, accounted for acquisitions valued at more than USD 68 billion in 2010 alone. Clearly, this is a two-way street.”
On the issue of limiting the cap on FDI in Indian firms that have benefited from state-funding for R&D activities, Shahani said: “One needs to look at this statement in the context of how much do Indian companies spend on research as a percentage of turnover, whether through direct funding or through state funding.”
The Department of Industrial Policy and Promotion (DIPP), a nodal agency responsible for FDI-related matters, had also raised concerns over the growing dominance of multinationals in the sector.
In a discussion paper release last August, the DIPP had said the acquisitions of Indian companies by foreign multinational companies in the recent past has led to articulation of public concern on its impact on the availability of low-cost medicines.
Indian generics to get easier access to Japan post trade pact
New Delhi, Feb 16 (PTI)The Indian pharmaceutical industry is set to gain in a big way with Japan, the world”s second largest market, agreeing to open up by removing import duty on generic drugs shipped from here.
As part of the Comprehensive Economic Partnership Agreement signed between India and Japan today, for the first time ever Japan has committed to give the same treatment to the pharma industry here as it gives to the domestic industry.
“The agreement will ensure access to a highly developed Japanese market for the pharmaceutical sector and for the first time ever, Japan has committed to give the same treatment for Indian generics as their domestic industry,” a statement issued by the Commerce and Industry Ministry said.
Import duties on Indian pharmaceutical products imposed by Japan will come down to zero once the agreement comes into force, expected to happen by this April. At present, Japan imposes import duty ranging 4-10 per cent on pharma products.
Moreover, the agreement will simplify procedures for the Indian companies planning to sell drug there. Japan has its own standards, requiring firms to rely on data specific to the country and cannot depend on tests conducted elsewhere.
Welcoming the development, Indian Drug Manufacturers” Association (IDMA) secretary general Daara B Patel told PTI: “It will help Indian companies to register their products there. It will lead to an increase the business with Japan.”
The Japanese pharmaceuticals market is the second largest in the world after the US, but the generics segment in the country is estimated to have an annual sales of up to USD 6 billion dollars, less than 8 per cent of the total market.
Only recently, the country had moved towards accepting generics drugs in order to bring down healthcare costs, post the financial meltdown in 2008-09 to meet growing requirements of an ageing population.
Analysts pointed out that Japan”s decision to open its market to Indian generics could have been influenced to a large extent by the acquisition by Daiichi Sankyo of Ranbaxy Laboratories, which is a major generics drugs maker.
‘Indian pharma bio-tech industry can tackle global pressures’
The National Institute of Pharmaceutical Education and Research (NIPER) celebrated its foundation day at its convention centre here Tuesday. Pankaj R Patel, Chairman and Managing Director, Zydus Cadila, was the chief guest while Prof KK Talwar, Director, PGIMER, Chandigarh, presided over the function and Prof Harkishan Singh, Emeritus Professor, was the guest of honour.
In his welcome address, NIPER officiating Director Prof KK Bhutani read out the annual report highlighting the activities undertaken by NIPER in last 12 months. Delivering the foundation lecture titled ‘Opportunities and challenges for pharmaceutical scientists in the next decade’, Pankaj R Patel discussed about the globalised world in the pharmaceutical industry and role of India in this.
He added the Indian Pharmaceutical Bio-tech industry is highly regulated, competitive and continuous to face number of pressures. He said the innovation and efficiency is going to drive Indian healthcare industry. Personalized medicine is going to break barriers of “one size fits all approach”.