PM urged to put FDI Cap on Pharma Cos.

NEW DELHI: Several organizations , including public health experts and patients groups, have written to the Prime Minister seeking a foreign direct investment (FDI) cap on pharma companies to prevent the takeover of Indian companies by multinationals , fearing it could affect India's health security negatively.

The letter expressed concern over the proposed visit of a delegation of representatives from the US drug companies association PhRMA this week to meet different ministries of the government of India. "We understand that the delegation is interested in discouraging the Indian government from applying a cap on FDI in the pharma sector and from issuing compulsory licences for patented medicines," stated the letter, further demanding that "the government be firm in keeping these options available for future use to strengthen selfreliance and not succumb to pressure from US companies and the US government."

Recently, the Department of Industrial Policy and Promotion (DIPP) had circulated a paper that noted the move towards acquisition of major Indian companies by foreign multinationals . Further, there have been several other tieups between MNCs and domestic companies like GSK with Dr Reddy's ; Pfizer with three companies - Aurobindo, Strides Arcolab and Claris Life Sciences ; Abbot with Cadilla Health Care and Astra Zeneca with Torrent.

The DIPP paper argued that: "There is a concern that their takeover by multinationals will further orient them away from the Indian market, thus reducing domestic availability of the drugs being produced by them. This may weaken competition leading to headroom for increase in domestic drug prices." Data from the Centre for Monitoring the Indian Economy (CMIE) indicates that while the rate of growth of sales of pharmaceutical companies declined during 2001-2009 , their ratio of profit after tax to total income increased.

Source : timesofindia.indiatimes.com