A resolution passed in the annual general body meeting of the All Kerala Chemists and Druggists Association (AKCDA) urged the Union government to review its policy allowing foreign direct investment upto 74 per cent in existing Indian companies and 100 per cent in Greenfield projects.
The resolution says that the Centre’s decision to allow 74 per cent FDI in Brownfield pharmaceutical projects in automatic route will lead to a collapse of both the Indian manufacturing industry and the trade industry in the country. So, immediately government should withdraw its decision to allow FDI in the Indian pharma sector.
AKCDA fears that the FDI in pharma sector will engulf the entire pharma trade in the long run. The government policy to attract foreign investors will have severe setbacks on the retail pharma trade in the country. After launching their manufacturing units, the foreign players will start their own sales outlets. This will eradicate the poor retailers and ultimately their businesses from the market. Besides, the situation will lead to increase the prices of all medicines, putting the patient community into severe sufferings.
A N Mohanan, president of AKCDA says that the Centre’s policy will completely disrupt the existing price control system in the country and the worst affected will be the poor patient community. He opines that the pharma manufacturing units in the MSME sector will totally vanish from the field once foreign investors get chances to invest in Indian pharma sector.
“The FDI will help the multinationals to take over the retail pharma trade in the Indian market. They will start their manufacturing units first followed by it they will enter into the sales field which is now driven mostly by qualified pharmacists and conventional traders. This system will collapse once foreign investors dominate the pharma market,” said the president of AKCDA, who was previously the president of the national trade body, AIOCD.
He said, within the last two years, about one thousand retailers surrendered their sale licences to the authorities and closed their shops owing to poor business growth in the retail sector. So, instead of opening doors for foreign investors in pharma trade, the government should bring in policies to support and sustain the business ventures of the domestic traders.