1. FDI – Most popular topic of the year.2. FDI – Has caught attention of every one in India.3. Human mind is averse to change.4. Opinion of Retail entrepreneur,

a) Can we afford to expand with the present cost of money?

b) Do we have capacity to meet the growing requirements of retail?

• 3rd Largest by Volume• 14th Largest by Value• Total revenue US $ 21 Billion• Domestic business US $ 12 Billion ( GOI-2009)• Expected to reach US $ 55 Billion by 2020• Potential to reach US$ 70 Billion by aggressive

growth scenario• Tops in Exports of Generics

EXSISTING PROPOSED

100 % FDI 49% fdi

AUTOMATIC MODE THROUGH LEGAL PROCESS

EXSISTING PROPOSED

37 DRUGS 348 DRUGS

• Leverage skills to get newer drugs to the market in shorter time spans

• FDI connects India globally on the R&D front. Foreign companies opens doorways for India in terms of exports

• FDI contribute to the creation of high-value jobs for the country,

• To improve access to high-tech Technology • Increasing the capabilities in the local industry

• Legal provisions

• Weak intellectual property laws

• Lack of data protection

• Government support

• Price controls

• Procedural delays

• Political instability

• It is fear that it will create an oligopolistic market.• Acquisitions by MNCs will impact the availability of

low-cost medicines.• Apart from acquisitions, MNCs are inking partnership

deals with Indian companies to make and sell low-cost versions of their patented products to gain a foothold in the Indian market.

A MNC focus on patented drugs, their can be shortage of generic.

Recent FDI was mainly in acquitions and with motive of:

• Acquisition of Indian companies to access one of the highest growth market in India,

• To acquire facilities and reduce competition of potential Indian pharmaceutical industry in quest to access emerging export market.

• Abbott Being largest domestic player enjoys the market share of just 6.1% thus the concern of oligopolistic market is not correct.

• The equity holding of a company has no bearing on prices or access, especially when prices are governed by the National Pharmaceutical Pricing Authority (NPPA) and competition pressure. Thus, prices of medicines of Ranbaxy, Shantha Biotechnics and Abbott have remained stable even after acquisitions.

• It will make the patented product available at affordable price because of FDI.

• Government should amend the act to ensure generic supply.

• The competition of Indian companies will take care of the concern.

• We have to accept the acquitions which will increase the market

• Likely to put breaks on the liberalization of FDI companies.

• Is there a guarantee that prices can be kept under control with a cap on FDI alone, in the event of a merger? Besides, if an MNC has 49 % stake in a company, can it not have control?

• Any restriction to FDI in the pharmaceutical industry could make overseas investment even in the R&D sector less attractive.

• Protectionism is harmful as it will make domestic industry lethargic and uncompetitive.

• It will have a chilling effect on the FDI flow to the country not only in the pharma sector, but also on other sectors. The government should be more cautious now when the foreign direct investment has already fallen by about 36%...,

Putting Cap on FDI is not solution for an emerging economy like India but keeping check and balances to facilitate deployment of these investment for creating new capabilities is right solution.

Concern of Government Behind Price Control

• Governments invoke price controls to ensure that Medicines are sold at a ‘fair’ price to protect citizens from exploitation.

• Is it achievable?

• It is the job of the (NPPA) to keep the prices under control and as a watchdog

• NPPA has indeed contributed immensely to make the prices of drugs affordable to the public.

• No doubt, several companies also contributed to lower prices through price wars, to stay ahead of competition.

• Disrupting supply and demand. Though the Drug Price Control Order (DPCO) was set up to ensure availability and accessibility of medicines, it has ended up driving out of the market globally-recognised drugs that were, in any case, affordable — it did this by driving prices down to such levels where firms were unable to supply.

• Serious problems also result when government sets prices below the equilibrium level. This causes consumers to want more of the product than producers have available.

• Price controls reduce entry and investment in the long run. The controls can also reduce quality.

• Reduction in innovation of formulations .

• The drug pricing issue affects development of pharma industry There is a lack of transparency where the actual cost of industry are not taken in account, etc.

• In the items of daily necessity like —food, shelter, clothing, education, doctors’ fees and hospital charges, there is no price control.

• Then why there is control only on medicines.?

• Any innovative product will be high priced in the beginning (to recover the R&D cost) and can certainly become cheaper once it becomes generic.

• It is important for the Government to cover as many people as possible under Health Insurance and provide cover for the critical illnesses and costly drugs.

• We can suggest novel idea like leavy sugar in which 15% of the production of sugar factory is required to be given at control price to government for PDS(public distribution system)

• Why not have such policy for Pharma Industry? In which certain percentage is given to government at controlled price and the balance is left for free competition.

• To conclude, we can say the FDI are not deterrent for growth & globalization of Indian healthcare industry?

• However, price control seems to be deterrent.