With many protests and concerns mounting against the ongoing take-overs of India pharmaceutical firms by the multinational companies, the government is looking into the possibility of adopting policy options to strengthen domestic sector and check the acquisitions by foreign hands.

In the run up to this, the Department of Pharmaceuticals (DoP) has requested the Department of Commerce to conduct a detailed study on the recent take-overs of Indian pharma firms by the MNCs and their impact. The recommendations to be made by the Commerce Ministry will then go to the Economic Advisory Council to the Prime Minister for suggesting an action plan or policy interventions, sources said.

The DoP has admitted that the recent take-overs could increase the possibility of other takeovers of Indian companies which would have impact on the Indian healthcare scenario as well as on pricing and availability of medicines in India. But before chalking out any action, the Department wants to have an appropriate assessment be made and hence it has approached the Commerce Department for the task, sources said.

The opposition and concerns about the string of take-overs have been increasing and even Union Health Minister Ghulam Nabi Azad had raised apprehensions. One of the demands being raised by the public interest groups that there should be cap on FDI in the pharma sector also got the backing from the minister.

The minister suggested that FDI in the domestic pharmaceutical industry should be shifted from the automatic route to the Foreign Investment Promotion Board (FIPB) route to ensure healthy growth of pharmaceutical industry and easy access to medicines for ordinary Indians. Shifting to the FIPB route would make the takeover difficult, he said in a letter to the Commerce Ministry.

In the last four years, at least six major acquisitions of Indian companies took place – Ranbaxy, Dabur Pharma, Shanta Biotech, Piramal Healthcare, Matrix Lab and Orchid Chemicals. Further, there have been tie-ups between MNCs and domestic companies including GSK’s link with Dr Reddy’s; Pfizer with three companies - Aurobindo, Strides Arcolab and Claris Life Sciences; Abbot with Cadilla Health Care and AstraZeneca with Torrent.