Lack of Leadership of Indian Pharma Cos

Q1)

Until 2008 the leadership in pharma Cos had done well in the local market with Cos. like Randbaxy, Cipla and Dr. Reddy’s dominating the local market with cost efficient products which could not be matched by MNCs excepting for a few like GSk.

However one area where these local Cos did not focus on is Reaseach and Development to develop new molecules which, although time taking and costly in the short term pays big time dividends in the long term. We have seen this with ISRO where there were some failures in the past, however today ISRO can be proud to place satellites of some developed countries.

Moreover instead of capitalizing on the experience gained over a period of time in the leadership role in the Indian Market the leaders have been selling off their cos ( or some major shares of them ) to MNC for short term gains. They lack the vision which could have taken their respective Cos to major global powers in the Pharma Industry. This could have been done by consolidating on growth of the local market which has been growing over a period of time and further growth expected as consumers in India are becoming increasingly prosperous and are willing to pay more for quality heathcare than in the past. After having achieved done this they could look at capturing the global market which is already being done by some Cos in India like Tatas.

Q2)

I completely disagree with decisions of the top leadership of the pharma Cos in the recent past. Dr. Reddys strategy of completely winding up or departing from its 15 year old discovery search model which had just started to give results, is something really uncalled for. Instead of giving more and more focus on research with a long term dividends the leaders looked at gaining short term gains which could be USD 10 -15 million for Dr. Reddy’s. The strategy of the Indian Cos of “ if you can’t beat them join them” reminds me of our history when many Indian rulers played into the hands of the British without any...