Tide of Change by Dr.Reddy’s Laboratories

Dr.Reddy’s Laboratories is a household name across India. A decade ago this company crossed the billion dollar turnover mark and the founder of the company, Dr. Anji Reddy expressed his desire to see the company as a pioneer in drug discovery in India. His dream was not fulfilled. Post his demise, the focus of the company shifted from research and development to manufacturing generic drugs.

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Image: Harsha Valamani for Forbes India GV Prasad and Satish Reddy

The company now run by Satish Reddy and G.V.Prasad has shifted its focus from research to manufacturing patient centric drugs which is reflected in their new tagline ‘Good Health Can’t Wait’. The company aims to be patient centric by reducing the cost of drugs.

In earlier times, the focus was on copying a drug once the patent on the drug expired. However, now the focus has shifted to addressing the needs of the customer. This involves assessing whether the customer will buy the drug rather than merely replicating an existing drug.

The company shifted its focus as drug development was expensive and difficult to sustain. The company merged its drug development unit with Aurigene Discovery Technologies Ltd., a subsidiary that is not funded by Dr.Reddy’s. This prime factors that brought about this change was the long lead time leading to the manufacturing and development of the drug and other stumbling blocks that interfere in the process.

Currently the company focusses on proprietary products that are created from known molecules. As opposed to drug discovery, creating proprietary products is less time consuming and involves less risk. The company spent 11.8 percent of its revenue on R&D, of which 40 percent went towards proprietary products

The Company also grows through partnerships and acquisitions. Partnerships between Dr. Reddy’s and several other drug development companies. Patches, eye drops and topical medications are some of the areas Dr.Reddy’s has dabbled in. In areas where indigenous expertise is not available, the company forges partnerships to obtain assistance in manufacturing the drug. Additionally, the company is also looking to acquire other companies as a means of either entering a niche market or acquiring a new technology.

The focus of the company may have change, but its skippers aim to keep the legacy of their founder alive through innovation in the form of generic and proprietary drugs.

The original article can be viewed here.

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