Union minister of chemicals and fertilisers Srikant Kumar Jena has voiced his concern over the likelihood of increase in prices of common drugs following the acquisition of Indian pharma companies by foreign firms in the wake of the liberalization of FDI to the extent of 100 per cent by the Central government.
Inaugurating the India Pharma Summit 2011, organized jointly by FICCI, Department of Pharmaceuticals and the WHO Country Office, Jena said, “The apprehension amongst policy makers is that if five or 10 foreign companies take over production bases in India through the 100 per cent FDI route, it would give rise to monopolies, which would be able to dictate prices of common drugs, which the poor in this country would not be able to afford”.
Jena cautioned that the acquiring companies need to clearly demonstrate the value addition brought forth, either for servicing the domestic segment or significant increases in export earnings. The motive should not merely be shopping of Indian companies to access one of the highest growth markets in India or to acquire facilities and reduce competition of potential Indian pharma industry in its quest for access to emerging export markets.
Allaying the domestic industry’s fears that its growth would be compromised by the price control mechanism being contemplated by the government, Jena clarified that the prices of only the “most essential drugs’ would be under the scanner.
G Balachandran, chairman, National Pharmaceutical Pricing Authority (NPPA), pointed out that the Indian pharma industry was faced with the challenges such as those of inadequate R&D infrastructure, poor industry-academia linkage, lack of high-end product development capable human resources, lack of time-driven regulatory infrastructure and poor SME base for high-end manufacture.
Nata Menabde, WHO Representative to India, stated that WHO wanted to see India taking on an increasingly bigger role globally and domestically in promoting generics and life-saving technologies so that medicines could be produced for the poor at prices they could afford. Instead of moving into industry branded generics, she urged industry to look at producing unbranded generics for the benefit of the common man.