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Dr Reddy’s Laboratories: Problems in the Mexico Plant
DRL And Its Business Segments
An Indian pharmaceutical multinational, DRL started as an API manufacturer in 1984 for India and later international markets. The company was committed to producing affordable and innovative medicines. It started its formulation operation in India in the year 1987. Since the 1970s, the Indian pharmaceutical industry had been flourishing as the Patents Act of 1970 which came into effect in 1972 only recognized process patents and not product patents. This enabled Indian drug manufactures, such as DRL, to grow by focusing on reverse engineering the drugs developed by research-based pharmaceutical companies in the West (also referred to as Big Pharma). These generic versions of the drugs were sold at a fraction of the price of the proprietary drugs offered by the research-based pharmaceutical companies. |
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After consolidating its position in domestic market DRL started its globalization initiative in 1991. Within two decades, DRL established a presence in over hundred countries. There were three core businesses of DRL (See Exhibit II for Consolidated Business Wise Performance of DRL)innovators. As a consequence DRL enjoyed the first mover advantage to launch a generic product by leveraging on IP strengths. The API global team had to ensure timely product development and supply in accordance with all regulatory and quality requirements. The CPS business took care of the serving several innovators comprising both, Big Pharma and emerging biotech; offering speed and flexibility. Its value proposition of providing end to end services and competitive pricing and capability to supply both small scale and commercial scale quantities had provided DRL with an edge over the other players in the game. DRL was known for its process expertise and operations strength.
