Pfizer Reviews Wholly Owned Arm Proposal

Pfizer India, a month after receiving the Foreign Investment Promotion Board (FIPB) approval to set up a wholly owned subsidiary, is still undecided on whether to go ahead with the plan.

The pharmaceutical company is still reviewing the option as it is in the last stages of the operational merger between Pfizer and Parke-Davis in India.

"We are still reviewing the option of opening the 100 per cent subsidiary," a company spokesperson confirmed.

Pfizer had drawn flak earlier from shareholders when it had first proposed the plan to set up a wholly owned arm in which all the brands of the US parent were to be transferred.

Late last month, FIPB cleared the application with the earlier set conditions by it waived. Some of the conditions put forth by FIPB were that under Clause 5(A) Pfizer itself would undertake manufacturing of bulk drugs from the basic stage and not through any kind of licensing or tolling of production to third parties and the activities proposed by the drug policy which is in force.

In its earlier application, Pfizer has appealed to the government that it be allowed to contract manufacture licensed drugs from third-party manufacturers through a licensing or tolling arrangements.

It had proposed to manufacture bulk drugs such as sulbactum, ampicilin, flucanzole, tinidazole, pyrantel promoate along with formulations for sulbactum, pivoxil, superzone and droloxifene. The company had contented that this third-party arrangement would be more beneficial than setting up a new factory.

Pfizer intended to export some of these drugs thereby improving the acceptability of local manufacturers with other multinationals or foreign companies. Applications of Eli Lilly and Knoll to set up 100 per cent subsidiaries have also been approved.

Pfizer's subsidiary is to concentrate on clinical research products, exports to foreign markets and exports to its parent.

Earlier this year Pfizer India officials had said that they had been weighing the option of making Warner Lambert India its wholly owned arm. Though internationally Parke-Davis is a 100 per cent subsidiary of Warner Lambert, in India the structure is the reverse.

After announcing the merger of Pfizer and Parke-Davis globally, the parents have already merged, but the process in India is yet to be completed.