Dr. Reddy’s Laboratories
A combination of various macro-economic and a few industry specific factors had an impact on the global pharmaceutical industry in the year that went by. The first and foremost element that contributed to the volatility was the currency fluctuation over recent years, led by falling oil prices. From a high of $100 per barrel in 2014, prices plummeted to $30 per barrel in the beginning of 2016, leading to significant currency volatility. Multi geography companies like Dr Reddy’s with significant exposure to the oil-dependent markets took a major hit.
“At Dr Reddy’s, we operationalised a strategy to mitigate this by building a portfolio of specialty products and leveraging the same across markets, thereby increasing our global footprint,” states Mukherjee. The second factor that impacted the company was the delay in drug approvals in their North America business on account of technology transfer from audit impacted sites. Customer consolidation in the US and the implementation of pricing regulations in some emerging countries also impacted business in 2016.
“Business swings like these could be the new norm in the industry and companies need to devise strategies accordingly to stay relevant. To tackle these, I believe there is a strong need for ‘stepping up’ innovation to create a niche in the Indian generic context. While most Indian companies understand this and are in the process of ramping up innovation, there is a need to make this strategy more productive, robust & effective to navigate through the business volatilities,” professes Mukherjee.
