Dept of pharma oppose stiff FDI norms: Sources

Sources say that the department of pharmaceuticals (DoP) has raised objections to some of those conditions and may bring cheer to the pharma sector. CNBC-TV18's Ronojoy Banerjee explains, quoting sources, the reason for the DoP's opposition to the conditions.

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Three weeks ago the inter-ministerial group proposed stiff riders based on proposals mooted by the ministry of health and family welfare as pre-conditions to allowing FDI in brownfield pharma projects.

According to sources, DoP has raised opposition to some of these riders. In fact one of the proposals stated that an acquired Indian company must increase its R&D expenditure  on diseases relevant to India by up to 5% points over the last five-year average.

DoP sources say that this proposal is simply not tenable given the fact that there is very little ground reality to show that an acquired Indian company has so far lowered its R&D expenditure on diseases relevant to India.

Sources also say that the pharma companies are unsure which government body will monitor the R&D on diseases relevant to India. These are some of the differences that are likely to be addressed in the next special group meeting which earlier met on June 6.

The special group which is likely to meet likely next week would include representatives from DEA, DIPP, MEA, overseas Indians, the pharma and the health sector.

These differences are also coming to light in the backdrop of the larger difference of opinion between the Prime Minister's Office and the commerce ministry over the nodal agency to clear FDI in pharma.

Sources also said that pharma companies have expressed disagreement on the exact definition of 'diseases relevant to India' as proposed by the ministry of health and family welfare.