India govt 'considering' bulk drug deals

The government of India is considering a proposal to buy patented drugs directly from foreign drugmakers in an attempt to obtain lower prices, a report in the Economic Times states. The move would, supporters argue, lead to lower prices by removing all expenditure on marketing and reduce profit-taking from the distribution process.

Although there is little doubt that, if the Indian government were to make massive block purchases of prescription and over-the-counter drugs, it would be in a position to leverage discounts, but this would need to be weighed with the already-existing price rebates offered by pharmaceutical companies for the Indian market. USA-based drug major Merck & Co offers its diabetes drug Januvia (sitagliptin) for about 20% of the US level in India, in recognition of the lower average income.

A spokesperson for Swizerland-headquartered Novartis, which fought a protracted legal battle over its patent rights for the oncology agent Glivec/Gleevec (imatinub; Marketletters passim), told the Marketletter that, in many cases, the pricing structure for developing countries was not aiming to generate net revenues.