Lal Kishen Advani, leader of the Bharatiya Janata Party and a possible Prime Ministerial candidate after next year's national elections, has denounced the merger of the Ranbaxy Laboratories, Indian pharma major with a Japanese MNC as unacceptable.
The news of the merger of the Ranbaxy with Japan's Daiichi Sankyo took the market by storm last fortnight. The firm's founders sold away their entire stake, 34.82 per cent.
AdvertisementRanbaxy is the largest Indian pharmaceutical company, and it has aggressively pursued the generic route in drug manufacturing - that is targeting drugs whose patents have expired.
A generic drug product is one that is comparable to an innovator drug product in dosage form, strength, route of administration, quality, performance characteristics and intended use.
Since it is cheaper to produce generics and one doesn't have to invest in research much, pharmaceutical firms in countries like India plump for such a product line. Ranbaxy too made its fortunes that way.
But globally things are changing. Innovator drug companies are fiercely protecting their drugs through litigation or by extending the life on an existing drug patent. What with WTO and the like, the climate for generic firms is changing even in India.
It was in such circumstances that Ranbaxy is changing hands, but many an Indian observer is aghast, as is L.K.Advani, a senior opposition figure.
"It's a cause for worry that an Indian company, known for its research and development capabilities and operating in a critical area like pharmaceuticals, has lost its identity to a foreign company," he said, while participating in a function in Mumbai Saturday.
Advani said he was aware that mergers and acquisitions were inevitable in a globalised world, but asked Indian industry to spare a thought for what he called the "third dimension".
"I am not trying to find fault with globalisation and profit motives. But these cannot override considerations of national interests," the BJP leader said, adding India Inc should guard against a monopoly situation in vital areas like pharmaceuticals.
"We need to think how such deals affect our poor people; and whether they can block access to drugs at a reasonable price," he said.