No move to restrict FDI in pharmaceutical: Montek

New Delhi: Planning Commission on Monday said there is no move “anywhere” to restrict foreign investment in pharmaceutical even as an expert group is looking into the specific issues related with FDI into the sector.

“I don’t think there is any move anywhere to prevent the expansion of existing 100 per cent foreign owned pharmaceutical companies or to prevent green field investment by foreign companies,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

Currently 100 per cent FDI is allowed in the sector. He was answering a question on whether the government was mulling restricting FDI in pharmaceutical sector. There are fears that acquisition of domestic pharma companies by MNCs will lead to drug price escalation.

Mr. Ahluwalia said due to this apprehension an expert group has been constituted under Planning Commission member Arun Maira to look into the issue. “… (the expert group would see whether) there is any problem or should there be any restriction relating to merger and acquisition rules for existing Indian pharma companies,” he said.

Domestic pharma companies, spearheaded by the Indian Drug Manufacturers Association and Indian Pharmaceutical Alliance, had raised concerns that the takeover of Indian companies by foreign firms could lead to a situation of overpricing of drugs and marginalisation of home-grown firms.