Foreign takeover of Indian drug-makers leaves ministry worried

August 4th, 2011 - 6:38 pm ICT by IANS  

New Delhi, Aug 4 (IANS) The department of pharmaceuticals has expressed concern over the impact on domestic medicine prices due to a spate of takeovers of Indian drugs makers by multinational corporations and has asked for a detailed study on the subject.

“Recent takeovers of Indian companies by multinational corporations could increase the possibility of other takeovers of Indian companies, which would have impact on the Indian health care scenario as well as on pricing and availability of medicines in India,” Chemicals and Fertilisers Minister Srikant Kumar Jena said Thursday.

“As such, an appropriate assessment requires to be made,” he informed the Lok Sabha in a written reply to a question, adding that a request for such a study has been made to the commerce ministry, the nodal agency that deals with policy on foreign direct investment.

Interestingly, this study has been entrusted with global consultancy and audit firm Ernst and Young.

“The policy of foreign direct investment in existing Indian pharmaceutical companies has come in for public comments, especially on the issue of takeover of existing Indian pharmaceutical companies by multinational companies,” Jena said.

He said the Planning Commission has also constituted a panel in this regard under Member (Industry) Arun Maira.

According to studies, India’s $15 billion pharmaceuticals industry is third largest in the world in terms of volume and ranks 14th in terms of value.

Some recent acquisitions in the pharmaceuticals space include: California-based Mylan Labs buying Matrix, Japan’s Daiichi Sankyo buying Ranbaxy, Illinois-based Abbot buying Piramal and Wockhadrt, Paris-based Sanofi-Aventis buying Shanta Biotech and Hamburg-based Frensenius Kabi buying Dabur Pharma.

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