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Ten Questions About Internet Governance

On April 23 in Sao Paulo, Brazil, the “Global Multistakeholder Meeting on the Future of Internet Governance,” also known as “NETmundial” in an allusion to the global football event that will occur later in that country, will be convened. Juan Alfonso Fernández González of the Cuban Communications Ministry and a veteran of the UN internet governance meetings, raises 10 questions that need to be answered at NETmundial.


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    Inside Views
    India: The Full Spectrum On FDI In Brownfield Companies

    Published on 17 January 2014 @ 7:43 pm

    Disclaimer: the views expressed in this column are solely those of the authors and are not associated with Intellectual Property Watch. IP-Watch expressly disclaims and refuses any responsibility or liability for the content, style or form of any posts made to this forum, which remain solely the responsibility of their authors.

    Intellectual Property Watch

    By DG Shah

    Acquisition of brownfield, or existing, pharmaceutical companies may be seen in different perspectives as greenfield, or new, projects are permitted 100% equity via the automatic route. India has sought FDI mainly to bridge the shortfall in investment or to facilitate the flow of know-how and technology. We must first assess the need of the pharma sector and then evaluate whether mere change of ownership would meet its needs.

    Domestic companies invested Rs 54,000 crore in gross fixed assets between 1995 and 2010. They have modernised manufacturing to meet stringent regulatory requirements of the developed world. Thus, the sector did not face dearth of investment. What they lack is technical know-how for discovery research and developing efficient global clinical trial protocols. But brownfield investments will not fulfil this gap. If so, should India not channelise FDI in areas that fill in these gaps? India did it in the 1980s for production of bulk drugs. China did it in the 1990s for investment in R&D. Russia is doing it currently to set up local production.

    India has the option to channelise FDI in the field of its choice, if only one were not to underestimate the huge potential of its market. Is it then necessary to offer the brownfield carrot to attract investment in the greenfield? Will investment in the brownfield eventually lead to investment in greenfield or taper off with the acquisition of existing companies? Will choking brownfield divert investment to greenfield? These are questions policymakers need to seek answers to.

    The perspectives of four diverse stakeholders — the promoter, industry, patient and public health — on brownfield investment are presented below: A promoter wants the best possible valuation, irrespective of consequences on society. He believes he has single-handedly built the company and, so, has the right to sell to whosoever gives him the best return. One may ask if patients, health infrastructure and the policy supporting indigenous producers had any role in his success.

    The industry has many views. Foreign companies, both brands and generics, are eager for a ready-to-eat meal without any barriers. The former is looking for a sizeable share of the domestic market to strengthen the distribution network for high-priced imported products. The latter is eyeing the low-cost manufacturing base to service lucrative overseas markets. Domestic companies have different considerations that keep changing according to their current standing and strategic plans.

    For instance, a company looking for acquisitions abroad, with a view to stave off similar barriers overseas; a company wanting to project a liberal image, with a view to impress an alliance partner; a company wanting to maintain its rank in the domestic market to discourage competitors from the inorganic growth; and a company wanting to eliminate lower priced competitors — these commercial considerations weigh in their supporting brownfield acquisitions.

    On the other hand, companies looking for inorganic growth want some restrictions to get the valuations right. It is pertinent to note that a foreign company is able to borrow at 1% to leverage the buyout, whereas a domestic company ends up paying 12 times more. Thus, the dice is loaded against mergers and acquisitions within the domestic sector.

    The patient is not concerned about ownership, as long as he is assured of uninterrupted supply of quality medicines at affordable prices. But who can assure him of sustained supply if the company is acquired by a foreign entity, protected by multilateral/bilateral trade agreements, and wants to serve only rich countries? Public health is a major concern for activists. They want medicine security.

    The commerce minister deserves credit for his foresight on this issue. Activists maintain the promoters’ right to wealth cannot be equated with the right to life enshrined in the Constitution. They have little respect for companies supporting brownfield acquisitions for private commercial interests.

    They wonder if the pharmaceutical sector is less sensitive than insurance, banking, media, aviation, etc, where FDI is capped.

    The role of policymakers is to balance these conflicting interests and evolve a policy to serve only long-term national interests.

    DG Shah is secretary general of the Indian Pharmaceutical Alliance.

    Source: This article was first published in The Economic Times of India, here. Reprinted with permission. 

     

     


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    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website. By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website.

    By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    1. You agree that you are fully responsible for the content that you post. You will not knowingly post content that violates the copyright, trademark, patent or other intellectual property right of any third party or which you know is under a confidentiality obligation preventing its publication and that you will request removal of the same should you discover that you have violated this provision. Likewise, you may not post content that is libelous, defamatory, obscene, abusive, that violates a third party's right to privacy, that otherwise violates any applicable local, state, national or international law, that amounts to spamming or that is otherwise inappropriate. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual preference, disability or other classification. Epithets and other language intended to intimidate or to incite violence are also prohibited. Furthermore, you may not impersonate others.

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