takeover of indian pharma companies
TRANSCRIPT
-
7/29/2019 Takeover of Indian Pharma Companies
1/2octobe r 23, 2010 vol xlv no 43 EPW Economic & Political Weekly4
LETTERS
Ever since the first issue in 1966,
EPW has been Indias premier journal for
comment on current affairs
and research in the social sciences.
It succeededEconomic Weekly(1949-1965),
which was launched and shepherded
by Sachin Chaudhuri,
who was also the founder-editor ofEPW.
As editor for thi rty-five yea rs (1969-2004)
Krishna Raj
gave EPW the reputation it now enjoys.
editor
C Rammanohar Reddy
Deputy Editor
Bernard DMello
web Editor
subhash rai
Senior Assistant Editors
Lina Mathias
aniket Alam
Srinivasan ramani
ashima sood
Bharati Bhargava
Editorial Staff
Prabha Pillaijyoti shetty
Editorial Assistants
P S Leela
Tanya Sethi
Editorial Consultant
Gautam Navlakha
production
u raghunathan
s lesline corera
suneethi nair
Circulation
Gauraang Pradhan Manager
B S Sharma
Advertisement ManagerKamal G Fanibanda
General Manager & Publisher
K Vijayakumar
Economic and Political Weekly
320-321, A to Z Industrial Estate
Ganpatrao Kadam Marg, Lower Parel
Mumbai 400 013
Phone: (022) 4063 8282
FAX: (022) 2493 4515
EPW Research FoundationEPW Research Foundation, established in 1993, conducts
research on financial and macro-economic issues in India.
Director
k kanagasabapathy
C 212, Akurli Industrial Estate
Kandivali (East), Mumbai 400 101
Phones: (022) 2887 3038/41
Fax: (022) 2887 3038
Printed by K Vijayakumar at Modern Arts and Industries,
151, A-Z Industrial Estate, Ganpatrao Kadam Marg,
Lower Parel, Mumbai-400 013 and
published by him on behalf of Sameeksha Trust
from 320-321, A-Z Industrial Estate,Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013.
Editor: C Rammanohar Reddy.
Takeover of IndianPharma Companies
India is, today, the fourth largest producerof drugs in the world and a world classsupplier of relatively cheap generic medi-
cines. It is the largest supplier in the worldof low-priced anti-retrovirals and exports
medicines to over 200 countries. However,
major concerns regarding access to medi-
cines in the country remain. The World
Health Organisation has reported that about
68 crore people, i e, 65% of Indians, are
without access to essential medicines.
Instead of building on the excellent
manufacturing capacity to make available
essential medicines for all, there has been
progressive undermining of these gains
especially in recent years. All the three
major developments which resulted in India
becoming the pharmacy of the world have
now been reversed the Indian Patents
Act of 1970; initiation of manufacture of
medicines from the basic stage by Indian
public sector companies in the 1960s; and
the 1978 Drug Policy that imposed several
restrictions on the operations of foreign
companies while providing preferential
treatment to Indian companies.
The immediate cause for concern is theseries of takeovers of important Indian
companies by multinational corporations
(MNCs) and the trend towards domestic
companies becoming junior partners
through tie-ups. Six major acquisitions of In-
dian companies have taken place in the last
four years Ranbaxy, Dabur Pharma, Shan-
ta Biotech, Piramal Health Care, Matrix
Lab and Orchid Chemicals, and more are
on the anvil. Further, there have been sev-
eral other tie-ups between MNCs and do-
mestic companies viz, GSK with Dr Red-
dys; Pfizer with three companies Aurob-
indo, Strides Arcolab and Claris Life Sci-
ences; Abbot with Cadilla Health Care and
Astra Zeneca with Torrent.
The Indian drug industry, built by dili-
gent application of public policy that sought
to achieve self-reliance in the pharmaceu-
tical sector and availability of medicines
at affordable prices, is poised to be handed
over to MNCs. These developments clearly
affect Indias health security negatively.It is in this context that we note with con-
cern reports in the media that a delegation
from PhRMA (the representative ofUS-based
drug companies),which is to visit India
soon, is particularly interested in discour-
aging the Indian government from applying
a cap on foreign direct investment (FDI) in
the pharma sector and from issuing com-
pulsory licences for patented medicines. Weare strongly of the opinion that an FDI cap
on foreign ownership of pharma compa-
nies and liberal use of compulsory licenc-
es are two vital avenues open to India to
find ways to ensure much wider access to
essential medicines to its citizens.
We also urge the government opera-
tionalise the following measures to rescue
India from the opprobrium of being home
to the largest number of people without ac-
cess to essential medicines: (i) Examine the
existence of collusive behaviour and abuse
of monopoly through intellectual property
rights and resultant high prices of patented
drugs in India. (ii) Instead of automatic ap-
proval, FDI in the pharma sector be routed
through the Foreign Investment Promo-
tion Board with an imposition of an FDI
cap of 40%, (iii) Liberal use of the compul-
sory licence provisions of the Indian Patents
Act to secure access to patented medicines
and therefore lower costs of medicines,
(iv) Scrap the loan licence system and con-tract manufacturingto discourage big com-
panies from reducing their manufacturing
activity, (v) Formulate appropriate poli-
cies to incentivise bulk drug manufacture
by Indian companies over import of bulk
drugs, (vi) Resist attempts to introduce
measures such as data exclusivity, or to
dilute/remove Section 3d of the Indian
Patents Act, especially through bilateral/
free trade agreements, (vii) Revive public
sector units to ensure production of
essential medicines and to provide secu-
rity in emergency situations arising out of
calamities such as war, natural disasters
and epidemics.
Dr Amit Sengupta, All India Peoples Science
Network; Dr Gopal Dabade, All India
Drug Action Network;
Dr Narendra Gupta, Prayas Rajasthan;
S Srinivasan, LOCOST;Dr Anant Phadke,
Medico Friend Circle;
Dr C M Gulhati, Editor, MIMS;
N B Sarojini, Sama Resource Group for
Women and Health(Extracts from an open letter to Manmohan
Singh, Prime Minister of India)
-
7/29/2019 Takeover of Indian Pharma Companies
2/2
LETTERS
Economic & Political Weekly EPW octobe r 23, 2010 vol xlv no 43 5
University of Hyderabad
We, the teachers at the University ofHyderabad, strongly oppose allmoves by the university administration to
alienate and gift away more than 1,000
acres out of the 2,324 acres of land that
were granted to the university by theAndhra Pradesh government in 1974.
First the university administration
allotted 200 acres to CARE Foundation, a
corporate medical organisation. Later the
administration tried to set up a so-called
Knowledge and Innovation Park by allot-
ting another 200 acres of the university land
to corporate firms for their R&D activity.
The university community fought a suc-
cessful battle against these allotments to
private companies and got them cancelled.
The administration has, however, suc-
ceeded in allotting university land to Teri,
the Centre for DNA Fingerprinting and
Diagnostics, the National Institute of Smart
Governance, the Tata Institute of Funda-
mental Research and so forth. The univer-
sity administration is currently pressing
ahead with moves to allot 150 acres to the
National Institute of Animal Biotechnology
and 30 acres to the National Institute of
Design. In all, this amounts to more than
600 acres of university land.We suspect that even government or-
ganisations are being used as front insti-
tutions that will facilitate the entry of pri-
vate sector bodies through private-public
partnership models.
Most importantly, the university is still
developing and growing and indiscrimi-
nate allotment of land will become a road-
block to its own growth. There is also no
clear vision or strategy evident in all these
land alienations and how they fit in with
the long-term prospects of the university.
We wish to express the firm opinion that:
(1) The university should adopt a highly
cautious stance in considering requests
for land allotment by outside organisations,
whether private or public since it is a limited
resource and could be required for its own
future growth.
(2) The university administration should
resist, not appease, the Andhra Pradesh
governments attempts to take back land
given to the university.(3) All the land allotments by the univer-
sity made in the last five years should
be subjected to a thorough review and
reconsideration.
(4) All stakeholders of the university
(teachers, students and employees) should
be taken into confidence about any future
proposal to alienate university land.
(5) A committee should be formed at the
national level to look into land alienationissues pertaining to any Indian university.
P Appa Rao, Life Sciences; Purendra Prasad,
Sociology; Durga Bhavani, Computer Science
V Rajagopal, History; K Laxminarayana,
Economics;Vamsi Vakulabharanam,
Economics; K Laxmi Narayan, Sociology and
Y A Sudhakar Reddy, Folk Culture Studies
University of Hyderabad
On the UIDAI
Aproject that proposes to give everyresident a unique identity number isa matter of great concern for those working
on issues of food security, NREGA, migration,
technology, decentralisation, constitution-
alism, civil liberties and human rights. The
process of setting up the Unique Identifica-
tion Authority of India (UIDAI) has resulted
in very little, if any, discussion about this
project and its effects and fallout. It is
intended to collect demographic data about
all residents in the country.Before it goes any further, we consider
it imperative that the following be done:
(i) Do a feasibility study: There are claims
made in relation to the project, about what
it can do for the PDS and NREGA, for in-
stance, which does not reflect any under-
standing of the situation on the ground.
The project documents do not say what
other effects the project may have, includ-
ing its potential to be intrusive and viola-
tive of privacy, who may handle the data.
(ii) Do a cost-benefit analysis: It is reported
that the UIDAI estimates the project will
cost Rs 45,000 crore to the exchequer in
the next four years. This does not seem to
include the costs that will be incurred
by the registrars, enrollers, the internal
systems costs that the PDs system will have
to budget if it is to be able to use the UID,
the estimated cost to the end user and to
the number holder. (iii) In a system such as
this, a mere statement that the UIDAI will
deal with the security of the data isobviously insufficient. How does the
UIDAI propose to deal with data theft?
(iv) The involvement of firms such as
Ernst & Young and Accenture raises further
questions about who will have access
to the data, and what that means to the
people of India.
The questions have been raised which
have not been addressed so far, including
those about:(i) Privacy: It is only now that the Depart-
ment of Personnel and Training is said to
be working on a draft of a privacy law, but
nothing is out for discussion, (ii) Surveil-
lance: This technology, and the existence
of the UID number, and its working, could
result in increasing the potential for sur-
veillance, (iii) Profiling, (iv) Tracking, and
(v) Convergence, by which those with ac-
cess to state power, as well as companies,
could collate information about each indi-
vidual with the help of the UID number.
National IDs have been abandoned in
the US, Australia and the uk. The reasons
have predominantly been costs and privacy.
If it is too expensive for the US with a
population of 308 million, and the UK
with 61 million people, and Australia with
21 million people, it is being asked why
India thinks it can prioritise its spending in
this direction. In the UK the home secretary
explained that they were abandoning the
project because it would otherwise beintrusive bullying by the State, and that
the government intended to be the servant
of the people, and not their master. Is
there a lesson in it for us?
This is a project that could change the
status of the people in this country, with
effects on our security and constitutional
rights. So a consideration of all aspects of
the project should be undertaken with
this in mind.
We, therefore, ask that the project be
halted; a feasibility study be done covering
all aspects of this issue; experts be tasked
with studying its constitutionality; the law
on privacy be urgently worked on (this will
affect matters way beyond the UID project);
a cost-benefit analysis be done; a public,
informed debate be conducted before any
such major change be brought in.
Justice V R Krishna Iyer, Romila Thapar,
K G Kannabiran, S R Sankaran,
Upendra Baxi, Shohini Ghosh,
Bezwada Wilson, Trilochan Sastry,
Jagdeep Chhokar, Justice A P Shah,and others.
(Based on a statement issued on 28 September)