Hospital-run pharmacies come under govt scrutiny
The finance ministry is working with the commerce ministry to clarify the legal status of such pharmacies. First aid for burn and eye injury
By Gireesh Chandra Prasad & Anil Nair, TNN |
NEW DELHI: The legal status of retail pharmacies run by corporate hospitals has come under the government's scrutiny. While foreign direct investment (FDI) in multi-brand retail outlets is not allowed, some corporate hospitals that own retail pharmacy chains have secured government permission for FDI in the holding company, i.e., the company which owns the hospitals.
Some experts say technically, this is a violation of norms while others say it is a grey area. At present, 100% FDI is allowed through the automatic route in the healthcare sector including corporate hospitals.
Companies need to only inform the Foreign Investment Promotion Board to update their records about the transaction.
Experts said companies do not always disclose that they sell medicines through retail pharma outlets.
The finance ministry is working with the commerce ministry to clarify the legal status of such pharmacies.
The Centre is also expected to seek clarifications from corporate houses on this.
Industry insiders said in-house pharmacies of hospitals are meant to provide service to patients and should not be regarded as a violation.
But officials say the status of pharmacies operating outside hospital premises-but owned by the same firm that owns the hospital-selling drugs to other consumers should be clearly specified.
Some experts say technically, this is a violation of norms while others say it is a grey area. At present, 100% FDI is allowed through the automatic route in the healthcare sector including corporate hospitals.
Companies need to only inform the Foreign Investment Promotion Board to update their records about the transaction.
Experts said companies do not always disclose that they sell medicines through retail pharma outlets.
The finance ministry is working with the commerce ministry to clarify the legal status of such pharmacies.
The Centre is also expected to seek clarifications from corporate houses on this.
ADVERTISEMENT
Industry insiders said in-house pharmacies of hospitals are meant to provide service to patients and should not be regarded as a violation.
But officials say the status of pharmacies operating outside hospital premises-but owned by the same firm that owns the hospital-selling drugs to other consumers should be clearly specified.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
