Focus On: How Dr. Reddy’s Labs’ approach sets it apart in a crowded space

Seth Mendelson
Editor in Chief & Associate Brand Director
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The key to successful retailing, according to the top person at Dr. Reddy’s Labs, an integrated global pharmaceutical company, is to cover all the bases so that the customer — whether a retailer or consumer — is happy with the interaction.

That, said Erez Israeli, the CEO of the worldwide company, which has U.S. headquarters in Princeton, N.J., and a manufacturing plant in Shreveport, La., will make all the difference in the world, especially as everyone is looking for a better deal and the same or improved quality on generic drugs.

It would be an understatement to say that the generics market is a bit confusing to both retailers and consumers. Dozens and dozens of companies compete in the space, each offering their own version of brand name drugs, emphasizing lower price points that will make the product more affordable to more consumers. The theory goes that more affordable means more sales and more profits for both the manufacturer and the retailer, as well as healthier consumers.

Retail pharmacists are in the middle of the struggle, caught between the national brands that spent millions on research and development and generic companies, and increasingly between insurance companies/pharmacy benefit managers and the consumer. Often, they are required to offer a generic equivalent of the national brand to their shoppers by various insurance companies or PBMs.

Officials at Dr. Reddy’s are doing all they can to make sure the company, founded in India in 1986, is at the top of the list when retail pharmacists are seeking a business partner in the complicated and unique world of generic drug manufacturing. They noted that the publicly traded company, with U.S. sales of around $900 million annually, is one of the largest generic manufacturers in the country. It currently offers about 150 molecules to the domestic retail marketplace and is introducing as many as 25 to 30 new ones each year.

“I think what sets us apart from the competition is how we relate to our customers,” said Israeli, who joined the company about three years ago and became CEO in July 2019. “We think it is all about bringing quality generic products to the retailer with affordable price points and consistent supply, as well as great service that really sets us apart.”

We are very well aware of the fact that we need to be very cost competitive. This category is all about giving value to the consumer, and we realize that we have to be very productive on what we do to ensure we give the best price.
Erez Israeli, CEO Dr. Reddy's Labs

Israeli pointed to four different factors that make Dr. Reddy’s, which does business in about 60 countries, stand above the crowd in the generics arena. One is the speed to bring a generic product to market and the important role that science and technology play in making sure that the product is the most efficient on the market. The second is quality and making sure that the product meets all standards, both from the government and the retailer.

The third is service. “People have to like working with us,” said Israeli, who noted that Dr. Reddy’s has about 400 employees in the United States and 22,000 around the world, with most in India. “We want them to find us friendly and we want them to find that we are working with them to find a solution to their needs.”

Last, but not least, pricing is a pivotal factor. “We are very well aware of the fact that we need to be very cost competitive,” Israeli said. “This category is all about giving value to the consumer, and we realize that we have to be very productive on what we do to ensure we give the best price.”

Last year, Marc Kikuchi, CEO of Dr. Reddy’s North America generics, told DSN that the company was waiting for FDA approval or feedback on more than 100 abbreviated new drug applications. By the end of the fiscal year next month, company officials said it expects to launch more than 30 new products in multiple disease categories. Many of these products will be complex or difficult to make, and they will fall in the limited competition space.

Additionally, Dr. Reddy’s is growing significantly in the oncology space, with the introduction of several complex injectable products. The company continues to leverage its relationships with oncology treatment centers and hospitals. In October, Dr. Reddy’s launched sapropterin dihydrochloride tablets for oral use and cinacalcet tablets.

“We have a very close relationship with our trade partners, and we are excited about the prospect of bringing new products to our customers and strengthening our relationship with them,” Kikuchi said.

Part of the company’s strategy has it focusing on building a reliable and flexible supply chain for its products. “We remain committed to supporting our customer through demand surges and helping them be successful, and serve patients with an uninterrupted supply of medicines,” Kikuchi said. “We are well positioned for sustained profitable growth given our strong base business and proven capability in complex generics, with strategic investments in R&D for proprietary products and biologics. Our core business performance remains strong. Our growth levers are proven, vigorously executed and continue to deliver. We will continue to make strategic investments for long-term, sustainable growth. At the same time, we will continue to explore selective business integration and opportunities to augment growth.”

It has been a slow and steady move up the generics ladder for the company, which was established by Dr. Anji Reddy with a single drug in a 60-metric-ton facility near Hyderabad, India. In 1988, the company acquired Benzex Laboratories to expand its bulk actives business. By 1990, it was exporting norfloxacin and ciprofloxacin to Europe and the Far East, followed by Russia in 1991.

By 1994, the company, after establishing a finished dosage facility to cater to such highly regulated markets as the United States, was ready to make the jump into the American market.

“There is much to be proud of with this company. We have accomplished a lot and become a major player in the retail marketplace,” Israeli said. “But there is more to be done. We want the consumer to know that we care about their healthcare needs,1 and we are here to develop solutions.”

“We are a company committed to this space. We are investing heavily in the science, technology and digital systems to allow us to give even better service in the future and bring more sophisticated products to the market.”