Dr Reddy’s to create branded generics platform for US mkt  

Pharma major betting on complex generics, proprietary products in FY17

Hyderabad: City-based Dr Reddy’s Laboratories Limited is in the process of creating a branded generics platform for the US and other markets in North America as the country’s second largest drug maker looks to consolidate its position in its largest market. A branded generic is a drug that is bioequivalent to the original product, but is marketed under the company's brand name, whereas a normal generic drug is marketed with its molecular name.

“We are creating a branded generics platform in North America and expanding our biologics play in Russia, CIS and other emerging markets. The outlook for the API business is also positive,” K Satish Reddy, Chairman, Dr Reddy’s Laboratories, said in his message to the shareholders in the company’s Annual Report for 2015-16.

North America is the largest market for the drug maker, accounting for 53 per cent of the company’s global revenues of Rs 15,470.8 crore in FY16. Its global generics portfolio contributed a whopping 83 per cent to the total. Discussing about the company’s performance this fiscal, Reddy said complex generics and proprietary products would drive the growth. The pharma major is also betting on its OTC (over-the-counter) lineup.

“What do I foresee for the next year?...Our growth, going forward, will be driven by the attractive pipeline of complex generics as well as our new proprietary products. We will leverage these across the markets we operate in, together with increasing our OTC portfolio,” he maintained. On the operations in Venezuela which hit Dr Reddy’s bottom line last fiscal, he said it would be difficult to assess the probable situation in the South American nation. “In case of Venezuela, company has decided to supply medicines only against the letters of credit or pre-payment,” the DRL chief said.

He however expressed cautious optimism about Russia in the wake of ‘a gradual recovery in crude prices’ which will have a direct impact on the country’s currency, the rouble. “We have started strengthening our pipeline with complex generics, better OTC offerings, and increasing our institutional/ hospitals’ business,” Reddy mentioned.

Referring to the warning letters received by the company from the USFDA with regard to three of its plants, Reddy admitted that the development had impacted the company as it had to delay key product launches. In November last year, the company received warning letters from the USFDA, relating to its Active Pharmaceutical Ingredients (API) manufacturing facilities at Srikakulam in Andhra Pradesh and Miryalaguda in Telangana, and its oncology formulation plant at Duvvada near Visakhapatnam.

The company had responded to them with a comprehensive plan of corrective and remedial actions with clear timelines. “However, this event and the remedial steps that followed have delayed launches of key products and certain APIs which, in turn, significantly lowered incremental revenues,” he said.

By P Madhusudhan Reddy