Just as the doctor ordered

On April 28, MSD Pharmaceuticals, the Indian arm of Merck & Co., the world’s #5 drug maker, launched its patented anti-diabetes (type II) drug, Januvia, in India. Already a bestseller in the US (it raked in $770 million in 2007), the drug uses a new class of molecule that enhances the body’s own ability to lower blood sugar when it is elevated.

That’s good news for the 30 million diabetic patients in India. For a company ranked 122 in the country and largely confined to the institutional market, this is the first big leap into the retail market. But that’s only part of the reason why Naveen A. Rao, MSD’s Gurgaon-based Managing Director, can’t stop grinning. The other big reason is the price at which he’s been able to launch this patent-protected (until 2022) drug in India: a daily cost of Rs 42.80, compared to Rs 200 ($4.8, to be precise) in the US. In fact, the price that Rao had suggested to his bosses in New Jersey seemed so cut-rate that it had to be approved by the worldwide Chairman & CEO, Richard T. Clark—that too on a weekend.

“We want to be seen as a partner of our patients,” says Rao, a medical doctor, who moved to India with Merck three years ago and took over the top job last year. There’s good reason why Clark has cut his man in India plenty of slack. To put it simply, Rao has promised to make MSD one of the top 5 players in India by 2015.

And the way he wants to do it is by giving it a more humane face— something Rao hopes will be evident in the pricing of Januvia. “My plan is simple. I want to give the best of Merck to India and the best of India to Merck,” says the athletic 53-year-old. Next on Rao’s radar are drugs for other major ailments in the country such as dyslipidemia (high cholesterol) and cervical cancer, which is more prevalent than breast cancer among Indian women. Rao, who is said to be the only other doctor-CEO in Indian pharma (Roche India’s Girish Telang is another), says he knows little about business. Merck will soon find out if he says that in jest.

— R. Sridharan