JOIN USThe BJP on Friday raised concern over the prime minister’s decision to clear pending proposals on foreign direct investment (FDI) in the pharma sector, ignoring objection from a section of the government, which the opposition party believes will adversely impact the domestic drug industry and escalate generic medicine prices in the country.
BJP MP Shanta Kumar raised the issue during Zero Hour in the Rajya Sabha that foreign pharma companies are buying out the country’s drug manufacturing firms at eight times their cost so that the MNCs could exploit chances of pitching for the 61 patent licences that are expiring next year.
He said that Prime Minister Manmohan Singh, who had last year not agreed to clear proposals of the takeover of indigenous firms, suddenly gave his nod in a meeting held on August 17 to bring FDI into the country, despite the fact that the Health Ministry, Department of Industrial Promotion and a Parliamentary standing committee was opposed to it.
Global pharma giants are eyeing the Indian drug industry given the fact that the country has the largest infrastructure and produces cheap medicine. India also exports Rs 45,000-crore worth of medicine to nearly 200 countries, apart from Unicef buying nearly 50 per cent of their requirement from domestic firms, Kumar told reporters later, at a press conference.
As many as 60 of the 61 projects cleared in the pharma sector were those in brown-field projects aimed at buying already-established drug companies.
The Parliamentary Standing Committee on Heath, headed by Shanta Kumar, in its report on August 13 had said that FDI should not be allowed in brown-field projects. However Kumar claims that it was ignored.
The BJP leader said 61 patents of world's pharma firms are expiring, and India will benefit the most from this. To avoid this, foreign pharma firms are buying Indian companies.
After the takeover, foreign firms will produce branded drugs and not generic ones, which would lead to escalation in prices.