Government to study impact of FDI in pharma industry

To assess the impact of Foreign Direct Investment (FDI) on the domestic pharmaceutical companies, a study has been commissioned by the Ministry of Commerce and Industry.


May 29, 2016: An academic expert along with the National Productivity Council would be involved in this exercise. The study is expected to explore the impact of Foreign Direct Investment on the brownfield pharmaceutical companies as well as the impact on affordable medicines.


A Parliamentary Standing Committee on Commerce had come up with the suggestion of constituting a study group to find the impact of FDI in brownfield pharma or operational firms. The Committee was of the view that a blanket ban should be imposed on FDI in brownfield pharma projects as it is felt that takeovers of multinationals have had an impact on the generic segment of the industry. Many countries around theworld donot allow takeovers in strategic sectors, pharma being one of them.


Some examples of major pharma MNCs taking over domestic firms have been Daiichi Sankyo's takeover of Ranbaxy, Abbot's acquisition of Piramal's healthcare segment, Mylan's takeover of Matrix Lab, Sanofi Aventis' purchase of Shanta Biotech.


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