US-based pharmaceutical firm Mylan Inc’s Rs
5,168-crore proposal to acquire Indian generic drugs company Agila Specialties
was cleared by the Government here on Tuesday.
The Department of Industrial Policy & Promotion
(DIPP) has been pushing for restrictions on the flow of pharmaceutical FDI in
brown field projects for quite some time as it is concerned that such
investments could seriously affect the country’s capacity to produce low-cost
generic drugs.
On its insistence, the Foreign Investment Promotion
Board (FIPB) had put on hold Mylan’s proposal to acquire Agila, but had
subsequently approved it when an inter-ministerial group headed by the Prime
Minister decided to approve all pending proposals based on the existing FDI
policy.
Subsequently, following discussions with other
ministries including Finance and the PMO, the Department decided to work on a
Cabinet note placing restrictions on at least three categories of
pharmaceuticals, such as vaccines, injectables and oncology (cancer) medicines,
in addition to bulk drugs.
As per RBI data, FDI worth $2.02 billion came into
brown field pharma between April 2012 and April 2013, while green field
projects could attract only $87.35 million.
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