The US-based pharmaceutical company Merck known as MSD outside the US and Canada, said their drug, under investigation for COVID-19 Molnupiravir, reduces hospitalisations and deaths by 50 percent for patients with mild or moderate COVID-19. If this drug is approved, then it will be the first pill that will be approved to cure COVID-19, which you can take at home.

In India, the Indian arm of Merck has signed up with eight companies to sell Molnupiravir in the country. These companies are Sun Pharma, Aurobindo, DRL, Torrent, Cipla from the listed space and the unlisted companies include Viatris, Emcure and Hetero. Additionally, Divi's Labs is MSD's authorised manufacturer for Molnupiravir active pharmaceutical ingredients (API).

In an interview with CNBC-TV18, Cyndrella Carvalho of Centrum Broking and Surajit Pal of Prabhudas Lilladher spoke at length about the likely impact on Indian pharma companies.

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Pal said in countries like Canada or the US, around 50-70 percent of the population are vaccinated, "So when you have a vaccinated population, the demand will not be high. So whether it should be added to the valuation of Divi's Laboratories, I doubt."

According to him, Indian companies will not be allowed to make money out of Molnupiravir as MSD will be allowing them to supply to the government agencies or to the public at a rate which could be under compulsory licensing of 5-6 percent of sharing with them with no profit-no loss condition,.

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However, Carvalho said Molnupiravir will be an opportunity for Indian companies and it will be served in the right manner depending on how the pandemic takes a turn.

"If the onset of COVID-19 again picks up, then we will have the opportunity in the domestic market. Given that it allows oral treatment globally, this could mean a significant addition to Divi’s as well as Merck’s portfolio," he added.

For the entire discussion, watch the video

(Edited by : Jomy Jos Pullokaran)