India has been worried about protecting its domestic pharma industry from MNC takeover for several years now -- especially as foreign buying companies have grown their market share to more than 15% in the last couple of years.
A high-level government think tank called the Planning Commission now has recommeded that India cap foreign investment in drug manufacturers to less than 49% rather than allow up to 100% investment as is theoretically possible now. Ostensibly this is to protect India's poor populace from being priced out of the market when the evil foreigners take over. This does not bode too well for foreign investment in India. Other members of the government argue that such protectionism is retrograde policy making -- and a few more forward looking Indian companies, like Biocon, say bring on the competition.
Its chairman, Kiran Mazumdar-Shaw says, "Companies will do what makes business sense for them. This is a high-growth sector and you will devalue it if you start putting restrictions."
Posted by Bruce Lehr Sep 27th 2011.