The ‘Parliamentary Standing Committee on Commerce’ in its report tabled today in Parliament advised the Government to take all measures to stop any further takeover/acquisition of domestic pharmaceutical units.
Over the last decade, one by one, key generic companies (Ranbaxy, Shanta Biotech, Nicolas Piramal) have been taken over by patent holding multinational pharmaceutical companies. Without making any investments in R&D, production facilities or creating any long term jobs, the multinational companies have been systematically acquiring existing production and distribution facilities of Indian generic companies. This issue was taken up for discussion by the Parliamentary Committee in 2012 and now its final recommendations and the report is available here.
The Committee highlighted in its finding that FDI in pharmaceuticals has been brown field investments i.e. take-over of generic pharma companies.The standing committee in its report presented to the Rajya Sabha today stated that “It seems that the old hackneyed route for monopolists to buy out competition in order to prevent the emergence of low price market is in full play. The Committee is unhappy over these developments since the real danger of the 100 per cent FDI and the selling/takeover of Indian companies is the decimation of competition as well as capabilities.”
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