Online BusinessPharma ind seeks govt assistance on takeover concerns
Concerned over the recent takeover of some firms by Multi National Companies (MNCs), the domestic pharmaceutical industry has asked the government to protect and promote it by making available funds for research and development.
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In a letter to the department of pharmaceuticals, Indian Pharmaceutical Alliance (IPA) has said lack of available funding is the main reason for the recent spurt in the sale of stakes in domestic companies.
"In view of your concern and interest in promoting growth and development of pharmaceutical industry, we urge you to examine this phenomenon and consider appropriate funding mechanism to protect and promote the domestic industry," IPA said.
Since June last year, multinationals have acquired six drug comopanies, including the Rs 22,000 crore takeover of Ranbaxy Laboratories by Japanese drug maker Daiichi Sankyo.
According to industry experts, drying up of product pipelines of MNCs are forcing them to buy up Indian firms to a get a hold on the generic business globally. Of late, there have been reports of majors like Pfizer scouting the Indian market for acquisitions.
The association said the sell-outs have highlighted the need for an "appropriate funding mechanism" to meet the challenges faced by Indian pharma companies.
Also, these have exposed the limitations of the current policy framework of providing weighted deduction for R&D and meagre amounts granted under Market Development Assistance (MDA) programme, it said.