Amid rising concerns over increasing acquisitions of domestic pharma firms by multinationals, Foreign Direct Investment (FDI) in the pharma sector grew by more than doubled to $ 1.07 billion during April-August’ 2013 as compared to $ 487 million during the same period last year.
The commerce and industry ministry is presently concerned over the rising acquisitions in domestic pharmaceutical industry and is proposing to tighten the FDI policy for the sector by incorporating conditions like mandatory investment in R&D and non-compete clause in the shareholders pact. The government is of the view that continuing acquisitions of Indian pharma firms by foreign companies would pose serious problems in availability of life-saving drugs to consumers in near future. It also wants restrictions on FDI in brown-field or existing pharma companies amid rising fears that such acquisitions could shrink India’s capacity of producing low-cost generic drugs. During the period from April 2012 to April 2013, over 96 percent of the total FDI in the sector has come into brown-field pharma.
Recently, the government has approved a Rs 5,168 crore proposal of US-based pharma firm Mylan Inc's to acquire Indian generic drugs company Agila Specialties. Such acquisition is likely to impact the industry genetic segment, which accounts for the largest chuck of the sector, with a share of around 72 percent in the total industry revenue. The Indian generic drug market grew at a CAGR of around 17 per cent between 2010-11 and 2012-13 mainly on the back of rising exports of generic drug due to their low cost.
The commerce and industry ministry is presently concerned over the rising acquisitions in domestic pharmaceutical industry and is proposing to tighten the FDI policy for the sector by incorporating conditions like mandatory investment in R&D and non-compete clause in the shareholders pact. The government is of the view that continuing acquisitions of Indian pharma firms by foreign companies would pose serious problems in availability of life-saving drugs to consumers in near future. It also wants restrictions on FDI in brown-field or existing pharma companies amid rising fears that such acquisitions could shrink India’s capacity of producing low-cost generic drugs. During the period from April 2012 to April 2013, over 96 percent of the total FDI in the sector has come into brown-field pharma.
Recently, the government has approved a Rs 5,168 crore proposal of US-based pharma firm Mylan Inc's to acquire Indian generic drugs company Agila Specialties. Such acquisition is likely to impact the industry genetic segment, which accounts for the largest chuck of the sector, with a share of around 72 percent in the total industry revenue. The Indian generic drug market grew at a CAGR of around 17 per cent between 2010-11 and 2012-13 mainly on the back of rising exports of generic drug due to their low cost.
No comments:
Post a Comment