FIPB clears eight FDI proposals in Indian drug firms

FIPB clears eight FDI proposals in Indian drug firms

New Delhi: The Foreign Investment Promotion Board (FIPB) on Friday cleared eight proposals to invest a total of 3,000 crore in Indian drug makers.

Opposition by the Department of Industrial Policy and Promotion (DIPP) to the investment proposals had delayed the clearance of such proposals by almost five months.

DIPP had cited public health concerns and the impact that acquisitions of Indian pharmaceutical companies by overseas companies could have on the availability of low-cost medicines.

Two new proposals by Advanced Enzyme Technologies Ltd and the UK-based Dashtag were deferred since the health ministry had not scrutinized the proposals, according to a senior government official who attended the FIPB meeting. The official declined to be named.

India has seen a number of big-ticket pharma transactions in recent years. In June 2008, Japanese drug maker Daiichi Sankyo Co. Ltd acquired New Delhi-based Ranbaxy Laboratories Ltd for nearly $5 billion (around 27,750 crore today). Two years later, US-based Abbott Laboratories bought the healthcare solutions business of Piramal Healthcare for $3.72 billion.

An inter-ministerial group set up by the finance ministry had resolved that investment proposals resulting in an equity holding higher than 49% in an Indian pharma company would need FIPB approval. The group also agreed to impose conditions on the continued production and sale of essential medicines by the companies in which the investments are made and placed a similar condition on research and development spending.

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