New FDI Norms And Regulations For Pharmaceutical Sector Of India 2012

The consolidated FDI policy of India 2012 by DIPP is proactive on many counts and it covers vast areas of public importance. One such area pertains to FDI in pharmaceuticals sector of India.
Recently, India has been taking special interest in FDI in pharmaceutical companies producing life saving drugs in India. This is also somewhat controversial and complicated in nature. Many FDI proposals in this category are still pending to be cleared by Indian government and its agencies.
In order to expedite the pending FDI proposals for pharmaceutical industry of India, the Indian government is planning to announce fresh norms and rules in this regard next week.
The Foreign Investment Promotion Board (FIPB) in its meeting on July 20 is planning to consider FDI proposals for the pharmaceutical sector. It is also expected that the Department of Industrial Policy and Promotion (DIPP) would notify the new rules soon as the inter-ministerial group (IMG) has finalised its recommendations.
IMG has addressed concerns of the health ministry and recommended stiff riders defining the quantity of generic drugs that foreign companies manufacture in India. Further, it has prescribed norms for higher investment in research and development activities by such companies. It has also suggested doing away with the mandatory clause of technology transfer by the foreign company in brownfield investment.
In a significant and parallel development, Unites States has accused India of WTO rules violations. The accusation arose out of the activities of Hyderabad-based Natco Pharma that is making generic version of cancer drug Nexavar.
India government has invoked the compulsory licensing provision that allowed Natco to sell Nexavar at a price not exceeding Rs 8,880 for a pack of 120 tablets required for a month’s treatment as compared to a whopping Rs 2.80 lakh per month charged by Bayer for its patented Nexavar drug. India has also defended its stand and claims that its decision does not violate any WTO norms.