Pharma major Dr Reddy’s Laboratories Ltd has readied an action plan to increase its revenue growth in the domestic market, which had dipped below the industry average last fiscal.
While the industry had expanded at 10.1 per cent, the Hyderabad-based company had registered 2.6 per cent growth.
“Though this has been a cause of concern, especially for outsiders, we are confident of good growth this year. We will be focusing exclusively on increasing our penetration in rural areas and some markets in north India,” Mr K. Satish Reddy, Managing Director, informed.
The company believes that the economic boom (which was there till recently) had resulted in increased incomes in the rural areas besides raising awareness about good health. “This potential is largely untapped,” he added.
It also plans to expand the width of its therapeutic segment, he said. At present, the portfolio width of the company tilts in favour of the chronic segment.
Besides boosting its brand equity to general and clinical practitioners, Dr Reddy’s plans to accelerate growth in the domestic market by speeding up product launches. It plans to launch two biologics in the current year (including one that was supposed to be released last year). “This is expected to drive revenues as one biologic can equal 20 normal drugs in revenue,” he said.
The much-awaited polypill (containing an aspirin, a statin to lower blood pressure and two blood pressure drugs) is also likely to be launched by the second or third quarter of the current fiscal.
During 2008-09, Dr Reddy’s launched 36 products but this was termed by the company as “less than adequate resulting in relatively flat growth of revenue at Rs 848 crore (Rs 806 crore).”
Dr Reddy’s is positive about the advantages it hopes to get from the shift to a new replenishment-based supply model. “The results from pilots conducted in three States were encouraging,” Mr Reddy said.
The concerted effort to increase revenue in the domestic market is vital for the company as its pharmaceutical services and active ingredients (PSAI) segment was adversely impacted by the global recession.
The PSAI segment was hit by the credit crunch in venture capital funding and shift in some API product mix, Mr Reddy said.