A piece in today’s Pharmalot blog reports that US generics giant Mylan has been blocked in its latest Indian acquisition. Ed Silverman does a good job of reporting the tensions on this issue within the UPA government. Planning Commission Deputy Chairman, Montek Singh Ahluwalia and others close to the PM are thought to want more foreign direct investment. If foreign owners cause price hikes, they reason that an efficient market will simply promote aggressive new Indian pharma competitors. Commerce Minister, Anand Sharma, has many more reservations: the market is not efficient and might be manipulated by foreigners who want to stop India undercutting multinationals in established and emerging markets (Sharma’s ministry controls the Department of Policy and Promotion which blocked the Mylan deal). Sharma’s ministry has ambitious targets to promote exactly that kind of aggressive exporting.
Silverman does not point out the contradictions in the original Economic Times piece. For example, there was a heated battle between Bharat and Shanta over Hep B vaccines until Bharat lost WHO prequalification for its product. Now that India’s public sector is switching to a pentavalent product including Hep B, the subject of supplying single Hep B is slightly academic anyway (the private sector had switched years ago). Standalone Hep B vaccines will probably only be used for high-risk groups and these will be the new second generation vaccines such as that from Israel’s SciGen.
Whether foreign companies such as Daiichi Sankyo and Abbott are happy about the billions they have invested in India is also ignored. Daiichi Sankyo is suing the family that sold Ranbaxy and — press reports say — planning 4000 layoffs. Abbott has struggled to make parts of its $4 billion Piramal acquisition work in the multinational’s more formal regulatory environment.