The Hindu Business Line : Pharma cos keen on tie-ups with UN agencies, NGOs

In India during the recent months, companies such as Matrix, Cipla and Ranbaxy have committed to providing cheaper AIDS drugs to the African countries as part of its agreement with the Clinton Foundation.

Also, Shasun Chemicals is expecting demand for its anti-TB drug from bodies such as the World Health Organisation and Medecins Sans Frontieres (Doctors without Borders) and is likely to supply these to some of the South African countries.

Ranbaxy too has joined hands with Medicines for Malaria Venture (MMV), Geneva to develop an anti-malaria drug. Other companies which have medicines for diseases such as AIDS, TB and malaria are always looking out for such large deals.

So what is in it for companies to join hands with such organisations?

Besides fulfilling corporate social responsibility, pharma companies say that the large-size orders make it an attractive business proposition.

According to a Ranbaxy spokesperson, "The margins on these products may be low, but income is made due to the large quantities ordered."

Also, the company's association with MMV will enable it to carry on preclinical to clinical studies and give Ranbaxy the worldwide rights for registration and commercialisation of the product.

"Purchases by these well-known organisations adds a lot of credibility to the company and makes access to newer markets easier," said an industry official.

However, on the flip side, the risks involved could be large. Recently, the country's third largest drug-maker faced a setback after it had to halt sales of two of its AIDS drugs to UN agencies for distribution after the WHO found studies by a clinical research organisation were not adequately documented.

The company maintains that bio-studies are being conducted and that this would not impact sales.

While the impact on Cipla in particular may not be very large, industry analysts said that domestic companies need to be careful while dealing with international organisations.

"A company could be blacklisted and this could impact its future prospects," the analyst pointed out.