India’s attempt to regulate increasing inflow of foreign direct
investments into the pharmaceutical sector does not seem to yield the
desired result as yet. Although government allows 100 per cent FDI in
pharma sector through automatic approval route in new projects and
investments in the existing companies only through the Foreign
Investment Promotion Board approval, there has been a steady rise in the
number of acquisitions of large Indian pharmaceutical companies over
the last ten years.
The first major acquisition in pharma sector was in 2008 when the Japanese giant, Daiichi Sankyo, took control of India’s largest pharma company, Ranbaxy Labs for $4.6 billion. Another major acquisition was of Shantha Biotechnics by the French pharma company Sanofi-Aventis. And the most recent FDI investment was for acquiring Indian generic drugs company, Agila Specialties, by the US based MNC Mylan Inc for a sum of Rs. 5,168 crore.
The government had cleared this deal a couple of months ago. Now, Sanofi is understood to be planning to acquire a medium size company, Elder Pharmaceuticals. FDI in the pharma sector has more than doubled to $1.07 billion during April-August period of this year as against an FDI of $487 million during April-August 2012, as per the latest data of the Department of Industrial Policy and Promotion. Over 96 per cent of the total FDI in the sector between April 2012 and April 2013 has come into brownfield pharma projects. The situation is scary as MNCs already control 35 per cent of the domestic pharmaceutical business.
The first major acquisition in pharma sector was in 2008 when the Japanese giant, Daiichi Sankyo, took control of India’s largest pharma company, Ranbaxy Labs for $4.6 billion. Another major acquisition was of Shantha Biotechnics by the French pharma company Sanofi-Aventis. And the most recent FDI investment was for acquiring Indian generic drugs company, Agila Specialties, by the US based MNC Mylan Inc for a sum of Rs. 5,168 crore.
The government had cleared this deal a couple of months ago. Now, Sanofi is understood to be planning to acquire a medium size company, Elder Pharmaceuticals. FDI in the pharma sector has more than doubled to $1.07 billion during April-August period of this year as against an FDI of $487 million during April-August 2012, as per the latest data of the Department of Industrial Policy and Promotion. Over 96 per cent of the total FDI in the sector between April 2012 and April 2013 has come into brownfield pharma projects. The situation is scary as MNCs already control 35 per cent of the domestic pharmaceutical business.
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