Merck drops India from Priority market list

US pharma major Merck Sharp & Dohme or MSD has dropped India from its list of priority markets in its latest global initiative to sharpen commercial and R&D capabilities. Other emerging markets like China, Russia and Brazil have found a place on the company's top ten priority market list, reports CNBC-TV18’s Archana Shukla.

Developed markets such as US, UK, Canada, Japan, France, Germany and Korea are part of focus countries for Merck. The pharma major says it wants to target resources where there is potential to deliver and greatest return on investment. With Rs 825 crore sales, MSD India is not a major revenue contributor for parent Merck. But its pace of growth has been encouraging and made India a favourite. Data from IMS Health shows MSD doubled revenues in last 5 years and now with a 15 percent annual growth rate, it is currently the fastest growing in the multinational companies pack. Also read: Eyeing overseas listing; moved biz to S'pore arm: Jubilant Merck's concerns in India • Its biggest contributor, the anti-diabetic portfolio- Sitagliptin (sold under the brand name Januvia and Janumet) which contributes 28 percent to MSD India revenues, is involved in patent litigation with Indian drug-maker Glenmark. Competition from generic drugs has also seen market share dip in the past few months. • Cervical cancer vaccine Gardasil has stopped clinical trials on court orders Critics say even with a large demand for healthcare, recent patent challenges, compulsory licensing and issues in pricing of patented drugs has taken the sheen away from the country. Kewal Handa, former MD, Pfizer said, “It has become very difficult to operate in IPR and top this up with difficulty in doing business particularly in the area of clinical trials. The domestic market attractiveness is almost gone off. If you are sitting on a board of MNC, you're decision would be to hold back investments in India.” However, MSD in a statement to CNBC-TV18 said, “MSD remains committed and focused on India. We continue to focus our strategies to provide medicines and vaccines to address high disease burden in India.” But Merck is not the only one to back track. While other top MNC pharma companies have sounded warning bells about India’s IPR regime, experts say that most global drug firms are holding back investments and are in a wait and watch mode, closely following the commercialisation of new drugs pans out.