The consolidated
FDI policy of India 2012 by DIPP is proactive on many
counts and it covers vast areas of public importance. One such area
pertains to FDI
in pharmaceuticals sector of India.
Recently, India has been taking special interest in
FDI
in pharmaceutical companies producing life saving drugs in India.
This is also somewhat controversial and complicated in nature. Many
FDI proposals in this category are still pending to be cleared by
Indian government and its agencies.
In order to expedite the pending FDI proposals for
pharmaceutical industry of India, the Indian government is planning
to announce fresh norms and rules in this regard next week.
The Foreign Investment Promotion Board (FIPB) in its
meeting on July 20 is planning to consider FDI proposals for the
pharmaceutical sector. It is also expected that the Department of
Industrial Policy and Promotion (DIPP) would notify the new rules
soon as the inter-ministerial group (IMG) has finalised its
recommendations.
IMG has addressed concerns of the health ministry
and recommended stiff riders defining the quantity of generic drugs
that foreign companies manufacture in India. Further, it has
prescribed norms for higher investment in research and development
activities by such companies. It has also suggested doing away with
the mandatory clause of technology transfer by the foreign company in
brownfield investment.
In a significant and parallel development, Unites
States has accused India of WTO rules violations. The accusation
arose out of the activities of Hyderabad-based Natco Pharma that is
making generic version of cancer drug Nexavar.
India government has invoked the compulsory
licensing provision that allowed Natco to sell Nexavar at a price not
exceeding Rs 8,880 for a pack of 120 tablets required for a month's
treatment as compared to a whopping Rs 2.80 lakh per month charged by
Bayer for its patented Nexavar drug. India has also defended its
stand and claims that its decision does not violate any WTO norms.
Source: Corporate Laws In India
