Two months after the government tightened the foreign direct investment policy in the pharma sector by allowing up to 100 per cent brownfield investment only after Foreign Investment Promotion clearance, there have been several applications from international pharma companies interested in Indian firms.
However, the FIPB in its last meeting a few weeks ago threw a spanner in the works by deferring four such applications.
A brownfield investment means acquiring or buying a stake in an existing company.
Earlier, FDI in both brownfield and new investments were under the automatic route.
Now, brownfield investments in the sector will be cleared by the FIPB for the next six months.
After that period, they will be scrutinised and cleared by the Competition Commission of India.
International pharma companies are rushing to get clearances from the FIPB within the six-month window.
After that, applications would be with the CCI, which will be empowered for effective oversight.
The FIPB and the department of pharmaceuticals have taken a tough stance on the new applications.
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Nearly half a dozen other international pharma companies are waiting in the wings and will decide on their next step based on the fate of the existing applications.
The FIPB has in its deliberations said in the wake of the new policy changes, it wants to study the applications carefully on various grounds -- whether they would impact the affordability of drugs for the common man, help the domestic pharma industry or bring about the infusion of new technology in the country.
The pharma companies under scrutiny are the US-based Akorn Inc, which manufactures niche generic drugs, Spain-based Chemo Espana, a health care multinational, the US-based Par Pharmaceuticals and Aptuit LLC, a US-based