The department of industrial policy promotion (DIPP) is bringing new headwinds to the FDI (Foreign Direct Investment) in the sector of pharmaceuticals that looking for a review from it in regarding policies barely after its intervention from prime minister Clearance in months.
The controversy rises here is regarding the FDI in retail to kick up the retail industry might bump back for time being, whereas another sector pharmaceuticals from FDI is quietly comes for UPA government clearance, which is going to hit common man pocket in future.
States in India have some patent rights on the investor’s expenditure that spent on innovative research resources. These rights are granted for a certain period and during this period the owner solely can manufacture the drug by finding and fixing price for it. There are some patent laws that were endorsed by government and have chance of changing when necessary.
In 1970, India has changed its patent Act before that British government has patent act which created to benefit their country. Again in 2005, India has done a major change in duration of patent period and at that time it was fixed as 20 years previously it is 7 years. Another change happened is ‘process patent’ is changed to ‘product patent’. The difference observed is in process patent there might multiple processes to manufacture a drug whereas in product patent it can’t. Both these changes are commanded under the world trade organization (WTO). Indian drug companies have achieved success globally with these patent rights.
Before 1970, India depended on multinational drug companies for their requirements in drug manufacturing, which are basically America and Europe. The Indian exports of drugs have grown in terms of pharmaceuticals and fine chemicals very impressively. The Indian market size of pharmaceuticals in domestic have forecasted to 20 billion dollars by 2015. This is the unique achievement by Indian pharmaceutical sector for manufacturing medicines. Other countries failed in ruling patent act whereas India did in 1970.
At present, Indian pharmaceutical sector is world’s largest industry and is being most developed one with good ranking and value terms. The country accounted nearly 10 percent in global production and nearly 4 percent in world pharmaceutical markets. Most of pharmaceutical needs are achieved by domestic industry and has great number of US FDA inspected plants.
Most of the Indian companies are supplying their drugs around 200 developing countries globally. Therefore India can be called as pharmacy for developing countries and Indian health ministers are affording their endeavors to sustain this accomplishment. Then the concept of FDI in Indian pharmaceuticals has arrived and it has created a scope for global players to invest in Indian pharmaceuticals industry and it got upset for the domestic companies that achieved success since 1970.
After the introduction of FDI in pharmaceuticals industry by Indian government, many domestic companies has taken controlled by multinational drug companies. But the health ministry of India woken up saying there is a huge threat to Indian domestic manufacturers and formed a high-level committee to take a new glance at policy of FDI.