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In a bid to open its economy, the Indian government will allow foreign investors to buy up to 74 percent of Indian drug makers without prior government approval. But the move is raising questions that it may open the door to a gradual takeover of the domestic pharmaceutical industry and eventually alter its role as a supplier of low-cost generic medicines to much of the world.

The shift is part of a broader change in policy toward foreign investment that was announced two days ago by Indian Prime Minister Narendra Modi. However, it also comes as the Indian government is under increasing pressure from global drug makers and United States officials to strengthen patent protection on pharmaceuticals. Just last month, for instance, the government issued a new policy to bolster intellectual property.


For this reason, there is concern the revised policy might create upheaval in the global generics market.

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  • Great posturing on part of Government of India. However, with the current bureaucracy, infrastructure challenges and a generic producer at every corner why would a foreign brand company want to open a generic “me-too” company especially when their business model is to invent new drugs and therapies. Let the generics be someone else’s headache has been their position.

    Government of India would control drug prices and that would be another deterrent for brands to open or acquire generic competitors. Indian companies are keeping brands honest through their pricing and global supply. I don’t see much happening for a long time.

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