The Union finance ministry has asked the Department of Industrial Policy and Promotion (DIPP), which is the government department entrusted with the formulation of foreign direct investment (FDI) policy, to urgently examine the concerns expressed by the Congress Member of Parliament (MP) from Rajasthan Dr Jyoti Mirdha who has demanded to the government to put reasonable restrictions on the sale of domestic drug companies to foreign entities.
According to sources, Union finance minister Pranab Mukherjee has written a letter to the union commerce ministry in this regard asking it to urgently examine the concerns expressed by the Congress MP regarding the issue of takeover of domestic pharma companies by multinational drug companies.
“I understand that currently Department of Industrial Policy and Promotion (DIPP) has placed a discussion paper on the issue of ‘Compulsory Licensing’ under TRIPS regime and the feedback of the stakeholders is under examination by them. I have accordingly advised the DIPP which is the government department entrusted with the formulation of Foreign Direct Investment (FDI) policy, to urgently examine the concerns expressed by you”, the finance minister replied to Dr Mirdha.
Earlier last month, Dr Mirdha had written a letter to the finance minister cautioning him about the adverse consequences of more takeovers of Indian pharma companies by multinational companies. In her letter, Dr Mirdha had asked the government to revisit the entire range of policies on pharma sector to put a cap on FDI in the pharmaceutical sector and also to put reasonable restrictions on the sale of domestic drug companies to foreign entities through appropriate procedures to ensure that life saving drugs are manufactured within the country at affordable prices so that the nation is not held to ransom.
Dr Mirdha’s letter to Pranab Mukherjee is significant as the union finance minister is reportedly opposed to putting a cap on FDI in the pharmaceutical sector.
In her letter last month, Dr Mirdha had argued that the drug industry cannot be treated like any other consumer sector. Medicines are required as an integral part of right to life, guaranteed by the Constitution. Since some 80 per cent of the population is dependent on private healthcare, cost of medicines is borne by people out of their personal sources. “Expenditure on treatment of diseases is the second biggest cause of rural indebtedness. Medicines are sensitive items and dependence on foreign sources can put the country in serious trouble”, the Congress MP cautioned the government.