"Well it's bollocks, isn't it?" Coe said at a press conference ahead of this weekend's world indoor athletics championships in Glasgow. "I can't really get excited about it.
"There's only one message and that is if anybody is moronic enough to feel that they want to take part in that, and they are from the traditional, philosophical end of our sport, they'll get banned and they'll get banned for a long time."
The doping-permitted event would target the "hypocritical, corrupt and dysfunctional" Olympics, and give athletes the opportunity to "push the limits of humanity," Enhanced Games President Aron D'Souza said.
Retired world champion swimmer James Magnussen recently agreed to take performance-enhancing drugs to make an attempt at beating Cesar Cielo's 15-year-old 50 metres freestyle world record with a $1 million incentive.
Coe, a fierce anti-doping advocate, did not mince his words with his dismissal of the event.
"I'm sure there are crazy things happening in other sectors, we occasionally get them," he said. "I really don't get sleepless nights over it. It's not going to be a page turner, is it?"
The world indoor championships run from Friday until Sunday at Glasgow's Emirates Arena.
