Local pharma sellout worries industry ministry

The industry ministry has raised concern over acquisition of Indian pharmaceutical companies by global players, saying such transactions could push up cost of medicines in the country and hurt the common man.

In a letter to health minister Ghulam Nabi Azad, commerce and industry minister Anand Sharma has suggested remedial measures to keep prices of drugs in check.

These proposals include compulsory licensing that allows other manufacturers to produce patented drugs if needed, a significant rise in the number of drugs on the essential list, and shifting foreign direct investment in local drug makers from the 100% automatic approval route to the Foreign Investment Promotion Board for better scrutiny.

“While, it is generally agreed that we need to strike a balance between the interests of inventors and those of consumers, the imperative of providing affordable healthcare assumes a different dimension,” the letter said.

The department of Industrial Policy and Promotion, which is examining options to introduce compulsory licensing, may also involve the Competition Commission to keep watch on mergers and acquisitions of drug makers by multinationals.

Multinational companies have acquired around six pharmaceutical companies over the last five years.
Such acquisitions include Ranbaxy Laboratories by Japan’s Daiichi-Sankyo and that of Dabur Pharma by Fresenius Kabi in 2008.

Recently, Piramal Healthcare sold its domestic formulation business to Abbott Laboratories. Matrix Laboratories was acquired by Mylan Inc in 2006 while Sanofi Aventis acquired Shanta Biotech, Hospira bought Orchid Chemicals’ injectible business in 2009.

Product patent laws in India and other countries allow governments to use the compulsory licensing provision to enable non-patent holders to make and sell patented drugs.

While global pharmaceutical majors say compulsory licensing
provision can be invoked only in the case of a national emergency, healthcare activists is of the view that under the Indian patent law, the government can use this provision liberally in public interest. NewsWire18