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News Article

India to Sell Merck’s COVID-19 Pill for Less than US$0.50

By Miriam Bello | Tue, 01/04/2022 - 13:14

Indian pharmaceutical company Dr. Reddy will produce the generic version of Merck’s COVID-19 pill (molnupiravir), which will be commercially available for US$0.46. Merck’s price point for each pill is US$17.74 so an entire treatment course will cost over US$700.

Dr. Reddy’s generic pill “Molflu” is already approved for emergency use by the Drugs Controller General of India (DCGI). The generic version is the result of a voluntary licensing agreement between Dr. Reddy and Merck Sharp & Dohme (MSD) to manufacture and supply molnupiravir in India and over 100 low and middle-income countries (LMICs).

Dr. Reddy can offer the pill at a significantly reduced price thanks to its ability “to manufacture the active pharmaceutical ingredient (API) as well as the formulation for molnupiravir and has made adequate capacity preparations,” said the company.

India is increasingly becoming a large pharmaceutical player thanks to its ability to manufacture low-cost generic alternatives that comes from economic factors favoring the industry, including competitive land rates, low-cost labor force, low-cost utilities and affordable equipment, among other factors. “Thanks to the dexterity of the pharmaceutical industry, the presence of a huge number of trained chemists and a large domestic market, India is one of the greatest producers of generic drugs,” says an article by the Washington Post.

Dr.Reddy’s vertical integration is common among many pharmaceutical companies in India. Experts claim Mexican companies could benefit from a similar integration. “Mexico has a strong pharmaceutical legacy and history. Both international and local players meet strict regulatory requirements but there are still opportunities and gaps in terms of technology and innovation,” M.S. Nagendra, Director General, Zydus Pharmaceuticals, told MBN.

Moreover, the country is held back by the limited availability of APIs. “API production is one of those gaps as there are just few local companies dedicated to their API production,” said Nagendra. India has taken pro-industry policies to support API producers. If the Mexican government encourages investment in API manufacturing, it would further strengthen the local pharma industry, he added.

To date, Mexico is dependent on China, India and increasingly the EU for its drug components. However, the COVID-19 pandemic caused a significant disruption in the global production and supply of APIs. “For example, India, a large manufacturer, saw its exports affected,” Efrén Ocampo, President, Grupo Neolpharma, told MBN. Due to the increased local demand for medication during the COVID-19 pandemic, India’s government had to issue a new approval process for the export of APIs, which affected international manufacturing operations. “These circumstances helped us to recognize that there are significant opportunities to manufacture APIs in Mexico and to eliminate our reliance on foreign countries,” said Ocampo.

Leticia Zermeño, Director, Grupo CPQ, told MBN that the government should create a program to support a strong national pharmaceutical industry to face health challenges. “[The government] should encourage the local production of APIs aside from the already well-developed medicines market.” She also stressed that the safety of the population should not be compromised due to supply chain disruption.

Miriam Bello Miriam Bello Journalist and Industry Analyst