A Parliamentary panel has suggested the government to put a blanket ban on foreign direct investment (FDI) in brown field pharma units. A Standing Committee on Commerce, in its latest report, has highlighted that under existing policy domestic firms are facing threat due to takeover by MNCs and it could affect India's ability to produce low-cost quality generic drugs.
Highlighting the rationale behind its recommendations, the report noted that the conditions imposed for approving FDI proposals in brown field pharma sector are not comprehensive and do not cater to the objective/purpose for which FDI is allowed. Further, there is no compulsion on transfer of technology and similar other conditions that can bring qualitative change to domestic pharma industry, the report added. Expressing the fear over the increasing acquisitions of domestic firms by MNCs, Panel stated that it would affect competition as well as take control of the larger share India's pharma industry and driving the domestic market as per their choice and desire.
The committee further added that FDI in pharma sector may be rigorously promoted for green field projects rather than brown field projects. It recommends that the Department of Industrial Policy and Promotion (DIPP) to work in tandem with Ministry of Health to ensure that FDI in pharma sector does not impinge on availability of affordable drugs to the Indian public. On the issue of rising price anomalies in the Indian pharma sector, the panel said that a ceiling may be fixed for introductory price of generic drugs in the country.
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