Pharmexcil welcomes foreign investments in pharma sector
Jayarama Emani | The Dollar Business The Pharmaceutical Export Promotion Council of India (Pharmexcil), welcomed the move by The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Shri Narendra Modi, to approve two significant foreign investments (FIs) in the pharmaceutical sector - Aurobindo Pharma Ltd; and Glenmark Pharmaceutical Ltd. Speaking to The Dollar Business, Dr P V Appaji, Director General, Pharmexcil said, “The recent move by the Government augurs well for the domestic pharmaceutical companies as they can now augment funds from foreign investors to focus on the export market. Moreover, with the new development, the confidence of the Indian pharma manufacturers will be on a high as these investments show the continued confidence of international investors in the domestic Intellectual Property Regime in the pharmaceutical sector.” He also added that FIs are likely to pick up in the future and are good for the industry as long as they do not affect the controlling power of the Indian companies. Meanwhile, a PIB release said that the government has given approvals for Qualified Institutional Buyers to infuse fresh equity of up to 7 percent amounting to about Rs. 2165 crore into the Aurobindo Pharma. The existing FII shareholding is 27.32 percent in the company. This will enable the company to expand its operations in the areas of anti-infective, cardiovascular and central nervous system related ingredients. Aurobindo Pharma employs more than 9500 professionals from 26 countries. In Glenmark Pharmaceutical Ltd, the company has increased the foreign investment limit by FIIs from 35.07 percent to 49 percent. This will result in an inflow of about Rs. 2022 crore. Apart from manufacturing pharmaceuticals, the company is also engaged in Research and Development activities in drugs. Glenmark Pharmaceuticals is a US$ 1 billion Indian pharmaceutical company, with a global presence with manufacturing facilities in India, Europe and South America. The companies promoted by Indian entrepreneurs are required to continue to produce medicines under the National List of Essential Medicines (NLEM) at the same levels as they had been doing in the past. These companies are also required to maintain R&D expenditure at the maximum levels incurred in the past three years and to provide complete information regarding transfer of technology that has been done. This underscores the importance given by the Government to strengthening healthcare in the country, by ensuring availability of drugs to the people at reasonable prices. By investing in Research and Development, these companies have become players in the global pharmaceutical market and exemplify “Make in India” which is being promoted by the Government of India. When contacted by The Dollar Business, no official from either Aurobindo Pharma or Glenmark Pharmaceuticals were available for comment.
This article was published on April 8, 2015.