While the persisting price pressures in the U.S. market are here to stay, Dr. Reddy's Laboratories is countering them by launching products with lesser competition and by finding new business models, according to the company's Co-Chairman and Managing Director GV Prasad.
The U.S. market will remain a challenge for all companies, Prasad told BQ Prime's Menaka Doshi on sidelines of World Economic Forum summit at Davos. "Our efforts will be to launch a larger number of products which will have lower competition and that will start playing out in the next year."
While the company isn't facing major supply challenges, but costs he said, are significantly hiked. It's countering that by directing efforts to lower its cost structures. "We try to make up the loss in through increased market share," he added.
Dr Reddy's is also looking at new business models which are not "commoditised by generic competition." However, these business models like branded business, specialty business, direct to consumer business or over-the-counter business are still in early stages.
The pharmaceutical company has also enhanced its focus on India and other emerging markets "which are not subject to pricing pressures" and are branded markets. The company will continue with its inorganic growth strategy by focusing on chronic segment like cardiovascular diseases and metabolic disorders, according to Prasad.
The product pipeline across markets is " robust" in FY23 Prasad said, preferring not to share more details on expected launches or their impact on revenue.
Russia Business
As global businesses withdrew from Russia after its invasion of Ukraine, Dr. Reddy's hasn't pulled back. Business in Russia continues to grow, contributing 9% to the total revenue of the company, Prasad said.
“We are not concerned about the geopolitical issue. We are more committed to our patients and we will continue to supply to that market,” Prasad said. “We are also a player in Ukraine and we have found ways to supply to the market there also.”
Prasad said that the company is not facing any disruptions in Russia and the payments are being received on time.
Watch the full conversation here:
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