US pharmaceutical major Pfizer has again urged the Indian government to allow its wholly-owned subsidiary, Pfizer India Ltd, to contract manufacture licensed drugs from third-party manufacturers through licensing/tolling arrangements, arguing that similar proposals from Knoll Pharma and Eli Lilly have been approved in the recent past.
In the past, Pfizer's expansion plans in India through Pfizer India have faced a roadblock since the government has not permitted it to manufacture bulk drugs from basic stage through any kind of licensing or tolling the productions to third parties. Companies are, however, allowed to manufacture bulk drugs from the basic stage on their own.
In its latest proposal, Pfizer has proposed to manufacture bulk drugs and formulations such as sulbactum, ampicilin, flucanzole, tinidazole, pyrantel promoate. It will also manufacture bulk drugs or formulations of sulbactum, pivoxil, superzone and droloxifene.
Pfizer has contended that the arrangement with third-party manufacturers will benefit it since it would be saved from making an investment in a greenfield factory which will also lead to a delay in rolling out its business. it said that the arrangement will also benefit local drugs and pharmaceutical manufacturers whose units are lying idle for want of business.
Pfizer had also proposed to export some of these drugs to overseas markets, thereby improve the acceptability of these local manufacturers with other multinational or foreign companies. Last year, the government had deferred a decision on the proposal on the ground that the new Drug Policy was being amended and the ministry of chemical and fertiliser was expected to bring about a policy related to third-party manufacturing. However, such a policy is yet to be announced.
Meanwhile, earlier this year the government announced that foreign direct investment limit in the pharmaceutical sector was being increased from 74 per cent to 100 per cent. Pfizer finds this enough sign of the government's aim to liberalise the sector and sought an amendment to the original approval letter. However, this time it claimed that the government had recently permitted such activities to its competition Eli Lilly and Knoll Pharma, without giving specifics.
It said the government should amend the agreement, deleting the said clause which excludes it from licensing or tolling manufacturing to third parties and replacing this with "the approval is subject to the condition that prior approval of the government shall be required for manufacture of licensable drugs and pharmaceuticals and bulk drugs produced by recombinant technology and specific cell/tissue targeted formulations and the company shall comply with the Drug Policy in force."
Pfizer Ltd, India is a separate listed arm of Pfizer Corporation in which the US pharma company holds a 40 per cent stake.
