final dr reddy s (3)

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TABLE OF CONTENT

Executive Summary

Introduction

S.No

.

Contents Page No.

1 5

2 7

3 Objective 11

4 About Dr. Reddys Lab. Ltd.

a) History of company

b) Board & Management

c) Infrastructure

12

5 Pharmaceutical Industry 17

6 Heriarchy of marketing department 26

7 Molecule Introduction

a) Gemifloxacin

b) Deflazacort

c) Doxophylline

27

8 Managing sales force 30

9 Product positioning 31

10 Competitor analysis 32

11 SWOT analysis 35

12 Field work 3713 Market surfing 39

14 Research & methodology 43

15 Data analysis 45

16 Finding 55

17 Recommendation 56

18 Conclusion 58

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19 Bibliography 59

20 Questionnaire 60

EXECUTIVE SUMMARY

The objective of the project was to evaluate the present market share of DRL, deal with

retailers to lure more customers and to ultimately increase its market share. To complete

this project, a survey was conducted on retailers with the help of questionnaire in the

SITAPUR. The sample size was decided by Mr. Nandan Singh, which were 42 retailers. All

the retailers selected in the sample had all three products of DRL (Doxobid, Gem One, and

Asteroid). After the survey, it was observed that sale of all three drugs is good and the same

would directly have an impact on the market share of the company. In SMS Hospital

region, a lot of marketing strategies had been already applied by the company. Among these

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strategies, strategy for Asteroid was an absolutely new concept and it had an innovative way

to attract more & more retailers.

The basic purpose of these strategies is to enhance the demand of products by temporarily

increasing their value to the purchaser. A major area of improvement that the company

should look at is retailer awareness about retailer centric schemes. The same came to light

during the survey, wherein it was observed that most of the retailers do not have proper

information even about retailer centric schemes being offered by the company. The MR of

the company is doing his job with good result; they are well equipped with product

scientific knowledge. They should be properly equipped by complete knowledge of the

products so that they can give proper knowledge to the retailers. The company should be

more liberal in giving the little bit knowledge to retailer about the products so that they can

sale companys products.

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Board & Management Team

Whole-Time Directors-

Dr. Anji Reddy G V Prasad Satish Reddy

Chairman Executive Vice Chairman and Managing Director & Chief

Chief Executive Officer Operating Officer

Management Team-

Abhijit Mukherjee Amit Patel Dr. Cartikeya Reddy

President,Pharma Services Senior Vice President & Senior Vice President &

& Active Ingredients (PSAI) Head - North America Head- Biologics

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Jeffrey Wasserstein KB Sankara Rao Prabir Jha

Executive Vice-President, Executive Vice President, Senior Vice President,&

NA Specialty Integrated Product Development Global Chief- HR

Advisor, Dr. Rajinder Kumar Saumen Chakraborty

Legal & Strategy President, President- Corporate &

R&D, Commercialization Global Generics

Umang Vohra VS Vasudevan Vilas Dholye

Senior Vice President President & Head of Executive Vice President &

& Chief Financial Officer Europe Operations Head Formulations

Manufacturing

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INTRODUCTION

Indias second largest pharmaceutical company by revenue, Dr Reddys Laboratories

Ltd

(DRL) .The Company consists ofActive Pharmaceutical Ingredient Business (API),

Custom Pharma Services (CPS), Generics, Generics Biopharmaceuticals,

Differentiated Formulation, New Chemical Entities (NCEs).

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API include Ciprofloxacin, Omeprazole and Sumatriptan Succinate of Canadian DMFs,

Ibuprofen, Ranitidine HCl form 1 and Cipro HCl of CEP and Omeprazole,S+Ibuprofen

and Valsartan, Ramipril, Risedronate Sodium and Nizatidin of US DMFs. Its CPS is, the

largest CPS player from India and a partner-of-choice to innovators, offering top-end

technical expertise, tailor-made pharma solutions and a track record of bringing

innovations to the market quickly, efficiently and economically. Generic business of

company is always a challenge for other pharma companies. It includes branded

8

GenericsGenerics Bio-Pharmaceutica

ls

DifferentiatedFormulation

NCEs

API

CPS

Dr. Reddys

Business


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generics and unbranded generics. In the branded generics include Omez, Ciprolet, Nise,

Enam, Ketorol, Exifine and Cetrine enjoy leadership positions in several key markets,

including India, Romania, Venezuela, Russia & the CIS countries. Dr. Reddys brands

are available in nearly 100 countries and generate revenue is more than Rs.69.4

billion.

Some of DRL's brand names are old as its age, but the corporation is relatively young.

DRL was founded in 1984 by a simple man Dr. Anji Reddy. Betapharm (Germany) was

acquired in 2006 (which is the fourth largest generic producer in Germany), with the

help of this company.DRL is able to covered a large market share in the generic section

in the global market.

DRL offers product choices to meet a broad variety of needs and preference - from fun-

for-you items to product choices that contribute to healthier lifestyles.

DRLs aim is To provide affordable and innovative medicines for healthier lives. We

serve societys important needs for affordable medicines through the API component of

PSAI and the Global Generics business, and for innovative products that solve unmet

medical needs through the CPS component of PSAI and the Proprietary Products

Businesses.

Shareholders

DRL (symbol: RDY) shares are traded principally on the New York Stock Exchange in

the United States. The company is also listed on the NSE (symbol: DRREDDY) and

BSE stock exchanges. DRL has consistently paid cash dividends since the corporation

was founded. Following table show the complete history of dividend:

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DIVIDEND HISTORY

Year ended Interim % Final % Total %

2000 01 - 40 40

2001 02 100 50 150

2002 03 - 100 100

2003 04 - 100 100

2004 05 - 100 100

2005 06 - 100 100

2006 07 - 75 75

2007 08 - 75 75

Corporate Citizenship

DRL, as a corporate citizen, have a responsibility to contribute to the quality of life in

the communities. This philosophy is expressed in the sustainability vision which states:

DRLs responsibility is to continually improve all aspects of the world in which we

operate environment, social, economic -- creating a better tomorrow than today.

The vision is put into action through programs and a focus on environmental

stewardship, activities to benefit society, and a commitment to build shareholder value

by making DRL a truly sustainable company.

DRL Headquarters

DRL World Headquarters is located in Hyderabad (Andhra Pradesh). The headquarter is

beautifully designed according to environment of Hyderabad. The manufacturing units

consist all the essential facilities which is necessary for an organization.

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The collection of works is focused on major twentieth century art, and features works by

masters. The gardens originally were designed by the world famous garden planner,

Russell Page, and have been extended by Franois Goffinet. The grounds are open to the

public, and a visitor's booth is in operation during the spring and summer.

OBJECTIVE OF THE STUDY

Analysis of the Doxophylline, Gemifloxacine and Deflazacort in SITAPUR;

Impact of schemes on sales;

To give recommendations for enhance market share;

To analyze the proper functioning of drugs;

To check out the availability of drugs;

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To study the factors which are important to attract the customers;

Kind of distribution channel adopted by company;

To know about salesmans effectiveness & attitude.

HISTORY OF DR. REDDY

Kallam Anji Reddy of Tadepalli village, Andhra Pradesh is a pharmacist. He

completed

his study in science stream in India. He started his career working for the state owned

Indian Drugs and Pharmaceuticals Limited. He was the founder managing director of

Uniloids Ltdand worked there from 1976 to 1980 and Standard Organics Limited where

he worked from 1980 to 1984.

In the year 1984, Dr. Reddy laid the foundation of Dr. Reddy Laboratories Limited in

Hyderabad.

The company established new standards in the Indian Pharmaceutical Industry and

transformed the Indian bulk drug dependency of the mid-80s into a self-sufficient

industry in the mid-90s. Finally the Indian Pharmaceutical industry developed into an

export-oriented industry and ever since continues to remain the same. In the year 1993,

Dr. Reddy's Laboratories emerged as India's first drug discovering company and on

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April 2001 it was the first non-Japanese, Asian pharmaceutical company which was

listed on New York Stock Exchange. During 90s, the company introduced branded

finished formulations in the less regulated markets in CIS, Middle East, South East Asia

and 8Africa. From late 90s, the company has started exploiting US patent and regulatory

system to introduce generic products in time, to gain market exclusivity and establish

brand image. It is the first Indian based company to receive 180 days exclusivity for a

generic drug in USA. Its latest product Amlodipine Maleate has made a sale of US$ 2.0

billion during 2002. The company has global operations with a strong focus on US,

Europe, Russia, China and India. Its portfolio of products consists of 70 Active

Pharmaceutical Ingredients (API), 100+ Branded Formulations, 11 Generic

Pharmaceuticals, 1 Specialty pharmaceutical, 7 new chemical entities in clinical trials. It

has world class manufacturing facilities consisting of 6 US FDA approved API plants, 7

formulation plants out of which one is dedicated for US and European market. Its sales

turnover for2002-03 was US$ 380 m. This comprised of 35% API, 38% Branded

Formulations, 24% Generics and others 3%. Its revenue came from US (32%), India

(36%), Russia (9%), Europe (8%) and others (15%).

DRL says it is keen to generate new streams of revenue in order to continue growing

and beat the competition in manufacturing where barriers to entry are comparatively

less.

DRLs strategic move is geared towards exploiting an emerging opportunity in the

global pharma industry. Multinationals are now increasingly looking at outsourcing

business functions such as process synthesis, analytical development, and

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manufacturing, to focus on drug discovery and brand management in an attempt to

develop cost effective business models, according to a report by consulting firm

KPMG and the Confederation of Indian Industry, a lobby group.

DRL is positioning itself as a service provider that will enable companies to take their

innovations to the market in the most cost-efficient and least time consuming fashion.

For DRL, building a sustainable organization is not a trend it blindly follows; it is

intrinsic to how it has operated for decades. To it, a commitment to sustainability means

a commitment to fulfilling its obligations to all of its stakeholders -- its customers &

partners, employees, shareholders and society. Thus, while optimizing profitability may

be one measurement of its performance, it also judges its success by its performance

with regard to the communities in which it lives and work, the environment and its

employees. DRL understand that it is only by increasing value to all of its stakeholders

that it can build an ever flourishing and lasting organization.

The capabilities of DRL are:

Deep Manufacturing Expertise

Globally Synchronize Supply Chain

Regulatory Performance

Quality & Product Responsibility

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DRL GROUPS INFRASTRUCTURE

Manufacturing Bandwidth & R&D Capabilities:

1. Pharma Services & Active Ingredients-

6 FDA-inspected plants in INDIA

1 Cytotoxic facility

1 FDA-inspected plant in Mexico

1 FDA-inspected plant in Mirfield, UK

(2 in Hyderabad, INDIA; 1 in Cambridge, UK)

2. Product Development-

Integrated product development capabilities, that include API development,

formulation development and analytical development skills

One Integrated product development facility in Hyderabad, India

3. Global Generics-

6 Formulation plants in India ( 1 USFDA inspected)

1 USFDA inspected plant in USA

4. New Chemical Entities-

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Conduct research in areas of metabolic disorders, cardiovascular indication and

cancer

5. Biologics-

Biologic development centre

GMP production

E coli and mammalian cell platform

INDIAN PHARMACEUTICAL INDUSTRY

6. Introduction:

Globalization is widely seen as a dominating phenomenon of 21st century

encompassing world wide integration of financial systems, trade liberalization,

deregulation and market opening resulting in a global market and patterns of industrial

development. In last few decades it is evident that firms and institutions from peripheral

countries or developing world are making sustained and deliberate effort to take

advantage of the new opportunities. The rise of East Asia followed by growth in China

and India has led to emergence of new breed of Multinational Enterprises (MNEs) from

these countries. By the end of 2004 China emerged as fifth largest outward direct

foreign investor with a total US $ 37 billion and was the third largest exporter after

Germany and the US (Child and Rodrigues, 2005). Similarly albeit on a smaller scale in

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the last decade Indian economy saw a dramatic growth in overseas investment by the

Indian industry. The firms from latecomer countries are making inroads in sectors such

as manufacturing (steel and pharmaceuticals) and services (IT) and trading as well as

high technology sectors like semi-conductors. Some of the firms such as Infosys,

Lenovo, Ranbaxy and Espat are now

competing at a global level. Multinational enterprises from developing countries are a

clear representation of a sustained increase in outward Foreign direct investment (FDI)

from developing countries which has risen from $60 billion in 1980 to $ 869 billion in

2000 and to a total in excess of $1trillion for the first time in 2004 (UNCTAD, 2004).

Outward FDI from developing countries accounts for more than 10 percent of the

worlds outward FDI. The rise of outward FDI and new MNEs that embody it, from

economies such as India, China, Korea, Singapore, Malaysia and Taiwan is a key

phenomenon for the world economy in last decade. It shows that firms from developing

countries are rising to compete at the frontiers of the world market and this research also

focusing on the strategies they have adopted to achieve that.

The first wave MNEs from the developing world documented by authors such as Kumar

and mcleod (1981) and Lall (1983) succeeded as international players despite many

difficulties. Their success was due as much to the difficulties encountered at home as to

the incentives driving internationalization. One of the most salient features of first wave

MNE activity is the direction and motivation of FDI compared to western MNEs. Much

empirical work on first MNEs indicated strong and marked trend investments in

neighboring and other countries which were at a similar or earlier stage of their

development. Prominent first wave countries such as India, Philippines, Argentina and

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Columbia did not show any significant increase in either the level of the total outward

FDI, nor a significant shift towards developed country hosts. But the arrival of the

second wave MNEs from developing countries represents quite a different phenomenon.

First wave countries experienced very low or negative economic growth rate whereas

second wave countries grew rapidly over the intervening decade and half. This has been

further enhanced by fundamental changes in the world economy which were a direct

result of globalization. Globalization has created a more broad and competitive market

across countries due to convergence of production and industrial patterns. As a result

firms need to have 4 competitive advantages that are globally viable rather than

domestically. Most of these developing countries also went through a fundamental shift

in the policy orientation from an import substituting role to an export oriented outward

economy. Firms in these countries now faced competition in domestic market with

global firms and needed upgrade their capabilities to survive. These changes had a

profound impact in creating a second wave of MNEs from developing countries.

Therefore Mathews (2006) argues that analysis of second wave requires different

perspectives that differ from those created to account for outward FDI from developed

countries, and the

first wave of MNEs from developing countries. Initial analysis of second wave of MNEs

reveals that overseas move of firms in the second wave is a result of the pull factors

that are drawing firms into global connections unlike push factors that drove firms as

stand alone players in the first wave (Mathews, 2006). Dunning et al. (1997) suggest

that in the case of second wave of MNEs from East-Asian countries such as Taiwan and

Korea were subsidized by governments with government policy interacting with firm

strategies. The rise of second wave MNEs from emerging countries is less driven by

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cost factors per se, but more by a search for markets and technological innovations to

compete successfully in the Global economy (Yueng, 2000). The sudden appearance of

the second wave of firms and their capacity to create competitive positions to existing

incumbents has raised interesting questions as they are not simply occupying space

vacated by incumbents instead in many cases they are creating new economic space by

their organizational and strategic innovation. Thus the changes in the world economy,

specifically its globally interlinked character is responsible for driving the new

approaches to and patterns of internationalization in firms from peripheral countries.

Therefore Mathews (2006) suggests that existing theories and framework of

internationalization have failed to capture organization and strategic innovations

adopted by developing country MNEs for new modes of internationalization. In this

context the Indian pharmaceutical industry provides an ideal case to investigate

approaches and motives of second wave MNEs firms from developing countries. From

the beginning of the 1990s, the Indian government started liberalization by removing

restrictions on trade such as regulations on FDI and opened Indian market to overseas

firms. As a result of liberalization policy Indian Economy witnessed dramatic growth,

changes in domestic market and firm activities specifically in relation to overseas

expansion strategies. The cumulative number of overseas project approved during the

1990s is estimated to be 2652, a nearly 11 fold increase from the number of projects

permitted during 1975-90 (230) (Pradhan,2004). The growth of overseas investment is

been characterized by significant changes in location and sectoral distribution. In the

1990s the majority of investments has originated from the service sector and was

increasingly developed country-oriented with majority ownership in most cases. The

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most important destination of Indian outward FDI to date is the USA which accounted

for 19% of total cumulative outflows from 1996-2003.

In 2005 Indian firms acquire 136 firms overseas with a total value of US $4.3 billion.

The Indian pharmaceutical Industry is at the forefront in international expansion

compared to other manufacturing sectors in the Indian Economy.

The Indian pharmaceutical industry is the thirteenth largest in the world in terms of

market output; accounting for a market of about US$ 2.5 billion (Ramani, 2002). It is

ranked as the most advanced pharmaceutical industry amongst developing countries and

is one of Indias best science-based industries. Indian firms have been investing abroad

for many years but it is only since the late-1990s that outward FDI flows have risen

considerably. The liberalization of government policies and relaxation of regulations on

FDI abroad have helped Indian firms to expand internationally. In the last decade some

Indian pharmaceutical firms have successfully internationalized their operations and

emerged as a major producers and suppliers of generic drugs all over the world. This

study of internationalization motives and strategies adopted by Indian Pharmaceutical

firms. In the absence of more systematic longitudinal firm level data this research is

based on case study evidence. The findings suggest that Indian pharmaceutical firms are

accessing advanced markets and acquiring new technology through the process of

internationalization. Indian firms augmenting existing skills in production capabilities

and process R&D by acquiring technology focused firms in advance markets. The

analysis suggests that Indian pharmaceutical firms have adapted to the realities of

globalization and are finding new niche through the process of internationalization.

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2. The Indian pharmaceutical industry:

India currently represents just US $6 billion of the $550 billion global pharmaceutical

industry, its share is increasing at 10 % a year. The organized sector of Indias

pharmaceutical industry consists of 250 to 300 companies, which accounts for 70 % of

the market, with the top ten companies representing 30%. The Indian pharmaceutical

industry has developed wide ranging capabilities in the complex field of drug process

Development and production technology. It is well ahead of other developing countries

in process R&D capabilities and the range of technologically complex medicines

manufactured. The Indian government adopted a new Patents Act in 1970, which laid

the foundations of the modern Indian Pharmaceutical industry. It removed product

patents for pharmaceuticals, food and agro-chemicals, allowing patents only for

production processes. The statutory term for production processes was shortened to five

years from grant or seven years from application. The 1970 Patent Act greatly weakened

intellectual property protection in India, particularly for pharmaceutical innovations. It

started the era of reverse engineering where firms developed new products by changing

their production processes like Dr. Reddy. Trained manpower, comparative ease of

imitation and a strong chemistry base among Indian research institutes supported

manufacturers and gave the

Indian pharmaceutical industry its current profile. The industrys exports were worth

more than US $ 492.30 in 2005-06 and they have been growing at a compound annual

rate of 22.7 percent over the last few years (National pharmaceutical policy, 2006).

The value of the Indian Pharmaceutical industrys overseas acquisition has grown from

just US $8 million in 1997 to $116 million in 2004. Indian firms have acquired over US

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$1 billion worth of pharmaceutical companies overseas in 2005. There are 3

developments which are pushing expansion of the Indian pharmaceutical industry into

overseas markets;

A. Opportunities opened in the US generic market due to the Hatch-Waxman Act,

B. Increasing outsourcing by MNC pharmaceutical firms and

C. Strengthening of patent laws in the domestic market.

D. Implement all these techniques in India for producing good medicines.

These three developments are creating new challenges and opportunities for Indian

industry and internationalization is one of route adopted by Indian to succeed in this

new

environment. The generic opportunity is a result of the passing of the Hutch Waxman

Act in the US in 1984. Under this new law, manufacturers of generic drugs no longer

had to go through a lengthy period of extensive clinical trials in order to market a

generic drug - demonstration of bio-equivalence was sufficient to acquire a patent on a

generic drug. procedures were established for the resolution of disputes between

branded drug manufacturers and generic manufacturers. Western markets were a

lucrative business opportunity and the low cost advantage enjoyed by Indian firms on

account of the cheap availability of scientific labour combined with scale economies

inherent in the manufacture of bulk chemicals made for big margins. Between 1999 and

2005 drugs worth $ 64 million went off patent allowing generic companies to take

advantage of better business opportunities. In the generics industry prescription drugs

worth $40 billion in the US and $25 billion in Europe are due to loose patent protection

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by 2007-08. In 2004 the US senate passed the Greater Access to Affordable Medicine

Act diluting some of the proinnovator provisions of 1984 Hatch-Waxman Act, giving a

big boost to the generic business in the US. Similarly Europe is emerging as a key

market and a potential growth driver. The size of market in 2006 was US $ 14.2 billion

with Germany, France, the UK and Italy accounting for more than 50% of market.

Governments in Europe are trying to reduce healthcare costs by embracing generic drug

companies. Liberalization facilitated the ability of Indian firms to exploit this

opportunity to market generics drugs to the US and other Western economies. Indian

firms are preparing themselves to take a share of this increasing global market. Indian

drug manufacturers

currently export their products to more than 65 countries worldwide; the US being the

largest customer. However Indian firms face some difficult challenges such as non tariff

barriers, decreasing profits in the generics market, competitive threats from big pharma

MNEs and reputation in western markets. For example, US regulation disqualifies

Indian firms from bidding for government contracts and Indian firms have to submit

separate

Applications for each state even when firms have FDA approved products and facilities.

Another challenge is the reduction in profit margin due to intense competition from

Chinese and Eastern European manufacturers as well as authorized generics produced

by main manufacturer. Currently Indian industry is estimated to account for 22% of

generics in the world market. Indian firms are aiming to move up the value chain by

developing capabilities to produce super generics rather than generics generics to

branded generics.

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Furthermore, stronger patent protection under the new patent law of 1999 has shut down

the avenues for exploitation of generics opportunity in domestic market, but promised

large rewards to Indian firms that could leverage their reverse engineering capabilities in

advanced markets. The stronger patent law restricts reverse engineering of newly

patented molecule, thus affecting an important source of growth for Indian firms. Also

multinational pharmaceutical firms have entered India after 2005 and using the same

resource base as Indian firms to compete in the Indian domestic market further

increasing pressure on profit margins of Indian firms. The contract research and

manufacturing services (CRAM) market has emerged as huge opportunity for the Indian

pharmaceutical industry. According to Frost and Sullivan (2005), the global outsourcing

market is worth

$37 billion and growing at almost 11%; 50% of the contract manufacturing market is in

North America, 40% in Europe and just 10% in Asia and the rest of the world. Indian

firms possess requisite capabilities to cater for the requirements of outsourcing markets,

still India accounts for barely 1.5% of the global CRAM industry. Due to untested

patent protection law and lack of data protection MNC firms are reluctant to outsource

early stage R&D work to Indian firms. Therefore Indian firms are trying to increase

their share in the outsourcing market by moving closer to the market.

Geographically the overseas acquisition by Indian pharmaceutical firms continues to be

directed at developed countries specifically the US and Europe (Table 1). Out of 32

acquisitions listed in Table 1 only 6 are in developing markets and the remaining rest of

26 are in advanced markets such as the US and Europe. The major acquisitions are in

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Pharma research,

formulations

2005 Uno-Ciclo (Brazil) 4.6

2005 Servycal SA (Argentina n/a

Hikal APIs contract

manufacturing

2004 Marsin (Denmark) 6 millio for

50% stake

Jubilant

Organosys

CRAMS,

pharma

speciality,

chemicals,

intermediates,

formulations,

medical (US)

chemistry and

clinical

services

2004 PSI (Belgium) 16

2005 Trinity Laboratories

(along with

subsidiary Trigen

Laboratories )

20.25 million

for 75% stake

2005 Target Research

Associates

33.5

Matrix Labs CRAMs,

generic APIs,

intermediates

and

formulations

2005 MICHEM (China) (JV) n/a

2005 Docpharma (Belgium) 263

2005 Explora Laboratories

(Switzerland)

n/a

n/a Fine Chemicals corp

(South

Africa)

n/a

Nicholas

Piramal

CRAMS space

contract

manufacturing,

APIs, branded

formulations

2004 Doubtrex brand

acquisition (US)

n/a

2004 Rhodias inhalation

business

(UK)

14

2005 Biosyntech (Canada) 6

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2005 Avecia Pharma (UK) 16.9

Strides lab Generics, OTC

and

nutraceuticals

2005 Manufacturing plant

(Poland)

8

2005 Beltapharm (Italy) EUR 1.6

million (70%

stake)

Sun Pharma Branded

formulations,

US generics,

APIs

2005 Two facilities from

Valent

Pharma (Hungary, US)

10

1997 Caraco (US) 7.5

2005 Able Laboratories (US) 23.15Ranbaxy US and Europe

generic

Markets

2008 Dai Chii Sanque

2004 RPG Aventis (France) 84

n/a 18 generic products

from Efarmes

S.A. (Spain)

n/a

2005 Brand veratide from

P&G

(Germany)

5

Torrent Formulations,

European

generic

Market

2005 Heumann Pharma

(Germany)

n/a

Zydus

Cadilla

Contract

manufacturing

and generics

2003 Alpharma (France) 6.6

Wockhardt Biogenerics,

US and

Europe generic

2003 CP Pharma (UK) 20

2004 Esparma (Germany) 11

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market,

Branded

generics

The major Indian companies such as Ranbaxy, Dr. Reddys Laboratories, Wockhardt

and others have established their own brand image in the international market as well as

domestic market and are taking steps to consolidate their activities.

Indian firms are compensating for the spiraling cost of selling and marketing in advance

countries by setting wholly owned subsidiaries or acquiring local firm. Thus reinforcing

the argument that Indian firms internationalization through acquisition is directed

towards acquiring new knowledge in different areas such as R&D capabilities,

regulatory skills and distribution networks.

7. Firms under investigation

The findings of this research are based on the study of internationalization motives and

patterns adopted by five well established Indian pharmaceutical firms, viz. Ranbaxy

Laboratories, Dr. Reddys Labs, Wockhardt, Nicholas Piramal and Sun Pharmaceuticals

Ltd.

Table 2 Firms under investigation

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Name of the

Firm

Year

established

No. of overseas

Manufacturin

g

Plants

No. of

overseas

acquisitions

from 1990

Turnover

(2008)

RS.

Million

% of

turnover

from

overseas

(2008)

IPO

Ranbaxy 1962 8 11 41205.88 69.90 1994

DRL 1984 2 4 50006 79.1 2001

Wockhardt 1959 3 4 26531.54 70.55 2003

NPIL 1988 5 3 28789.1 71.67

Sun 1983 4 3 32776 68.78 2007

All these firms are privately owned business with family ownership and ranked amongst

top ten firms in India. Table 2 shows that large part of their turnover comes from

overseas markets while advance regions such as US and Europe account for more than

80% of overseas revenue. All these firms raised money through IPOs (Initial Public

Offerings) before embarking on the overseas acquisitions.

But my focus is only on Dr. Reddy, through this analysis we can find out that in the

previous time period the pharmaceutical companies were interested in overseas

development but now the scenario is changed completely. These companies are

focusing in the national market with the help of using generic patent off drugs by

changing their process and their contents.

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Dr. Reddys M&A:

Table No. 3 DRLS Mergers & Acquisitions:

S.No. Year Acquired Firm Focusing Area Value

1 2002 BMS laboratories and

Meridian labs

UK generics market US $16 million

2 2004 Tregenesis (US) Specialty products access

drug delivery platforms in

the

dermatology segment

US$11 million

3 2005 Roches Generic Business

(Mexico)

US generics market US $ 59 million

4 2006 Betapharma (Germany) European Generic Market US $ 572

million

5 2008 Jet Generici SrI Itly Generic Market n/a

6 2008 Dow Pharma (UK) Small molecule business n/a

7 2008 BAFS-SE Pharma(US) Performance Products,

Functional Solution

n/a

8 2008 Perlecan Pharma Pvt. Ltd.

(India)

Indian Manufacturer of

Functional solution

n/a

With the help of this table(Table:3) it is clear that DRL shown their presence in the

pharmaceutical industry by a large number M&A. DRLs international and national

marketing successes were built on a strong manufacturing base which itself was a result of

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inorganic growth through acquisition of international and national facilities. DRL merged

with Cheminor Drug Limited (CDL) with the primary aim of supplying APIs (active

pharmaceutical ingredient) to the technically demanding markets of North America and

Europe. This merger also gave DRL entry into value added generics business in the

regulated markets of APIs. DRL began its major international production by entering Russia

through a joint venture with Biomed in 1992 and in 2002 DRL converted the joint venture

into a fully owned subsidiary. It strengthened its Indian manufacturing operations by

acquiring American Remedies limited in 1999. This acquisition made DRL the third largest

pharmaceutical company in India, after Ranbaxy and Glaxo (I) Ltd., with a full spectrum of

pharmaceutical products, which included bulk drugs, intermediates, finished dosages,

chemical synthesis, diagnostics and biotechnology. So through this way now DRL is the

secong largest pharmaceutical company in the India.

Flow Chart: DRLs Expansion in the World

THE HIERACHY OF MARKETING DEPATMENT

31

CHAIRMAN


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MOLECULES INTRODUCTION

WHAT IS GEMIFLOXACIN?

32

SENIOR DIRECTOR

Sales Manager

SM

Production Management Team

(PMT)

North-West Sales ManagerSouth East Sales

Manager Group Therapy Management

Regional Manager

Area Sales Manager Scientific Business

Officer

SBO

Professional Service

Representative

Product Manager


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Gemifloxacin is a synthetic broad spectrum antibacterial agent for oral administration.

Gemifloxacin, a compound related to the fluoroquinolone class of antibiotics, is

available as the mesylate salt the sesquihydrate form. As recognized by the US Food

and Drug Administration in their approval statement for gemifloxacin in April 2003, it

is the only agent that displays activity against both fluoroquinolone target sites at

therapeutically achievable levels.

Clinical success rates ranged from 93.9-95.9% in patients with community-acquired

pneumonia and 96.1-97.5% in those with acute exacerbation of chronic bronchitis.

Gemifloxacin is a dual acting fluoroquinolone with excellent activity against S.

pneumonia including those strains demonstrating resistance to other classes of

antibiotics. Gemifloxacin targets both DNA gyres and Topoisomerase IV of S.

pneumonia. The brand under this molecule is GEN ONE .

WHAT IS DELAZACORT (ASTERIDE)?

Deflazacort, a synthetic oxazolone of prednisolone with 0.84 times anti-inflammentory

effect of prednisolone. When in-vitro immunosuppressive effect of deflazacort, a new

bone-sparing glucocorticoid, and its biological active metabolite, 21-deactyl deflazacort,

was examined on phytoaemagglutinin (PHA) stimulated human peripheral blood

lymphocytes (PBL) as well as on natural killer and killer cell activity, Deflazacort and

the 21-deacetyl metabolite were as potent as prednisolone and hydrocortisone in

suppressing PHA stimulated lymphocytes in a dose dependent way.

On visit 2, FEV1:122.2 and 126.5 %( p


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improvement: FEV1: 133.2 and 132.5% (p


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COMPETITOR ANALYSIS

The major competitor of DRL through out the survey area is Macleod. Following will

give a brief of the competition between the rivals:

Although the goals of both the companies are the same, the two companies rely

on somewhat different marketing strategies. DRL has always taken the lead in

developing new products. Further, DRL has always taken more risks, acted

rapidly, and was always developing new drugs at a lower cost than Macleod

In the foreign markets, DRL has been more successful then Macleod. In the

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Middle East countries DRL has a good strength than Macleod & now in India

DRL has established new plants for increase the production of drugs so now it

can export ready medicine instead bulk.

While Macleod has been playing safe with introducing new drugs with good

working and trap the market share than DRL. DRL has introduced a new drug in

deflazaort category-Asteroid, to cover the area of asthma drugs and it is going in

good direction.

DRL has positioned itself as a quick copy which is considered to be more

modern and lively as compared to other companies because in this industry any

company is not sure about its share. Also, DRL has always played around

innovations so as to lead the market.

This chart show the market share of DRL & Macleod:

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In the same manner for ths gemifloxacin molecule the main competitor is Gicin, cmpany

is using same strategy for this molecule product(Gem One). The condition is cleared

with the chart.

The third molecule for analysis is Deflazacort, the market share of DRL for this

molecule is smaller than other companies product. As we know the pharmaceutical

industry is fragmented industry, so it is quite difficult to a company to rule over market

with one product. DRL is also doing work on this drug & strenghning the marketing

strategy for this drug. The market share of this drug is cleared by following chart-

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Conclusion:-

According to study DRL is maintaining its position as a quick copy who introduces

drugs on the basis of patent off pattern. For existing in the market always innovation is

necessary.

SWOT ANALYSIS

STRENGTHS-

Aggressive decision maker

Cost leadership

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Tactful reengineering process

Copy the manufacturing process of patented drugs

Adapting quickly changed environment

Quality of drugs

Cross licenses , joint ventures & alliances

Talented workforce

WEAKNESSES-

Concentrate only process improvement

Marketing arms are split

Mainly focused on bulk drugs

Focus on therapeutic segment

OPPURTUNITIES: -

Develop new process

Research driven company

Sustain for growth & diversification

Field Work

Market Analysis of Doxophylline, Gemifloxacin, Deflazacort SITAPUR

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The product of these molecules is, Doxophylline- Doxobid, Gemifloxacin- Gem One

and Deflazacort- Asteroid. These drugs are prescribed by doctors to the asthma patients

and availability of products on the shops depends on the medical representatives.

My job was to visit all the chemists of main five hospitals area in the SITAPUR. The

name of hospitals are-

1 Sethi Hospital

2. Dr Dhawan Clinic

3. Sakshm Nurasing home

4 Pragti Nurasing home

During the initial stage of the project, I came to know about the all the brands of

these molecules of existing companies. On visiting chemists on various routes, I

realized how important a strong distribution channel was for a company to be able

to retain its position as an industry leader. I used to visit all the retail outlets of a

particular route each day and learnt how to applied a companys drug in the

market, how to tackle the various problems related to knowledge of drug to the

doctor & chemist. Having done this, an overall market scenario of the distribution

channel and methods became clear.

In the process of increasing the market share of drugs market representatives give

doctors about the drugs & clarify all the queries of them. In this way they tried to

motivate them to prescribe more and more of the products of DRL. I also analyzed:

1. Whether the MR is telling about the actual working of drug to the doctors &

chemists properly?

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2. Whether the availability of drugs on the shops?

3. Whether the doctors are prescribing the drugs of the company

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RESEARCH METHEDOLOGY

A market research survey has been conducted for the purpose of above study. The

research data has been collected through out this procedure.

A. Data collection

The success of any research project depends critically on data. So data collection is the

most important aspect of a research project. Primary and secondary data are used in this

project.

B. Sample survey:

Survey has been conducted after preparing the questionnaire and the focus was to know

the market share of company.

C. Sampling:

a) Nature of Universe

The research was carried on doctors and chemists.

b) Sample Size

Sample size has been 42 chemists of various places in SITAPUR.

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c) Secondary Information

Companies documents, various journals, pamphlets and companies portals were studied

for relevant information regarding the subject of the projects. These documents were

very useful for theoretical, conceptual and organizational background. Detailed analysis

of information and data collection was carried on and then it has been possible to

complete the task.

d) Question Design

The question was designed keeping in mind the need of the project. The questions were

simple and concise. Questions were prepared for chemists.

PRIMARY DATA:

Primary data is collected through chemists, questionnaire, and personal interviews of

chemists and different employees of DRL (MRs.).

For example:

Condition of sale of drugs -

Very Good

Good

Above Average

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Average

Below Average

Bad

DATA ANALYSIS

Q1. Have you all the brands of Doxophylline?

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Q2. Have you all the brands of Gemifloxcin?

Q3. Have you all the brands of Deflazacort?

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Q4. Give name of available brands of Doxophylline molecule.

Ans. Doxopick Doxobid(DRL) Doxorill(Macleod)

Doxiflo Doxofree Doxious

Doxomax Doxovin

Q5. Give name of available brands of Gemifloxacin molecule.

Ans. Gen One (DRL) Gemimac Gemic

Gicin Gem2kuin Gemz

Q6. Give name of available brands of Deflazacort molecule.

Ans. Defcoat Defza Deflanol

Asteroid (DRL) Depsure Defzacore

Q7. Market status of DOXOBID in SMS Hospital.

Ans.

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Q8. Market status of GEM ONE in SMS Hospital.

Ans.

Q9. Market status of Asteroid in SMS Hospital.

Ans.

47


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Q10. Market status of DOXOBID in Kawatia Hospital.

Ans.

Q11. Market status of GEM ONE in Kawatia Hospital.

Ans.

48


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Q12. Market status of Asteroid in Kawatia Hospital.

Ans.

Q13 Market status of DOXOBID.

Ans.

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Q14. Market status of GEM ONE.

Ans.

Q15. Market status of Asteroid.

Ans.

50


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Q16. Market status of DOXOBID.

Ans.


Ans.

51


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Ans.


Ans.

Q21. Market status of ASTEROID.

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Ans.

PROFIT & LOSS ACCOUNT

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Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover6,780.2

05,285.80 4,469.60 4,080.40

3,428.40

Excise Duty 93.90 97.30 74.00 80.90 84.51

Net Sales6,686.3

05,188.50 4,395.60 3,999.50

3,343.89

Other Income -191.90 117.00 254.00 212.20 197.29Stock Adjustments 104.80 79.00 117.30 64.10 93.87

Total Income6,599.2

05,384.50 4,766.90 4,275.80

3,635.05

Expenditure

Raw Materials 2,122.90

1,749.50 1,599.40 1,534.00 1,347.33

Power & Fuel Cost 177.50 144.60 104.10 90.00 77.12Employee Cost 831.20 702.70 516.40 412.50 366.28Other Manufacturing Expenses 163.10 129.50 117.30 105.90 130.35

Selling and Admin Expenses1,554.4

01,256.70 1,036.60 1,117.90 896.54

Miscellaneous Expenses 80.30 65.00 50.60 45.30 37.44Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00

Total Expenses4,929.4

04,048.00 3,424.40 3,305.60

2,855.06



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Cash Flow for Dr. Reddy\'s Laboratories Ltd.

(Rs in Cr)

Mar' 12 Mar' 11 Mar' 10 Mar' 09 Mar' 08

Profit Before Tax 1,259.20 1,051.90 1,084.80 729.50 584.10

Net CashFlow-Operating Activity 1,403.00 246.30 1,253.20 481.30 555.87

Net Cash Used In Investing Activity -423.50 -613.00 -1,111.10 -743.60 -1,515.93

NetCash Used in Fin. Activity -194.90 61.00 -152.20 105.60 46.15

Net Inc/Dec In Cash And Equivlnt 784.60 -305.70 -10.10 -156.70 -913.91

Cash And Equivalnt Begin of Year 64.40 371.90 378.10 541.10 1,451.25

Cash And Equivalnt End Of Year 849.00 66.20 368.00 384.40 537.34

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Balance Sheet of Dr Reddys Laboratories ------------------- in Rs. Cr. -------------------



Sources Of Funds

Total Share Capital 84.80 84.60 84.40 84.20 84.09

Equity Share Capital 84.80 84.60 84.40 84.20 84.09

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 6,633.00 5,935.60 5,830.20 5,174.90 4,727.72

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 6,717.80 6,020.20 5,914.60 5,259.10 4,811.81

Secured Loans 0.50 0.70 0.80 2.60 3.40

Unsecured Loans 1,532.90 1,444.10 562.40 637.70 458.91Total Debt 1,533.40 1,444.80 563.20 640.30 462.31

Total Liabilities 8,251.20 7,465.00 6,477.80 5,899.40 5,274.12



Application Of Funds

Gross Block 3,507.80 3,025.00 2,425.70 2,157.30 1,750.21

Less: Accum. Depreciation 1,611.00 1,334.00 1,110.10 946.50 762.80

Net Block 1,896.80 1,691.00 1,315.60 1,210.80 987.41

Capital Work in Progress 637.60 570.40 745.40 411.20 245.71Investments 2,477.70 2,462.00 2,652.70 1,865.10 2,080.71

Inventories 1,326.70 1,063.20 897.40 735.10 640.93

Sundry Debtors 1,943.50 1,770.50 1,060.50 1,419.70 897.71

Cash and Bank Balance 93.10 66.20 47.90 84.30 67.19

Total Current Assets 3,363.30 2,899.90 2,005.80 2,239.10 1,605.83

Loans and Advances 1,291.40 1,663.80 1,321.40 1,331.20 1,272.02

Fixed Deposits 755.90 0.00 320.10 300.10 470.15

Total CA, Loans & Advances 5,410.60 4,563.70 3,647.30 3,870.40 3,348.00

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 1,534.30 1,565.20 1,543.80 1,163.30 786.36

Provisions 637.20 256.90 339.40 294.80 601.38

Total CL & Provisions 2,171.50 1,822.10 1,883.20 1,458.10 1,387.74

Net Current Assets 3,239.10 2,741.60 1,764.10 2,412.30 1,960.26

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 8,251.20 7,465.00 6,477.80 5,899.40 5,274.09

Contingent Liabilities 2,018.90 1,526.00 2,016.10 1,934.80 1,892.55

Book Value (Rs) 396.19 355.69 350.30 312.17 286.12

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FINDINGS

According to market analysis of Dr. Reddys product, conditions of some drugs are

better and some have very low market share.

As per findings, the condition of Doxobid is quite good comparisons of other

drugs. But Doxobid face a great completion to Macleods Doxorill. Doxorill

has a large share of market.

The condition of Gem One is best among the other drugs. It is market leader

in the Gemifloxacin molecule.

Beside this Asteride is a low performer in the market and it needing a lot of

attention.

The works of representatives are going on very well and it is right for DRL

that it has well workforces which make possible every step of company in

right direction.

The products of DRL are working in a good manner than its competitors.

The reasons for this success are-

o Availability of drug at a low cost.

o Workings of drugs are better.

o Work of representative is in an effective manner.

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RECOMMENDATIONS

Doxobid:

Doxobid is going on very well, but company need to put little bit pressure on its

sales through-

Involving new ingredients in the product which make it more effective.

As we know in India cost play a major role on sale, so company need to

decrease the price of product from Rs. 50 to Rs. 48. This can play a vital role

in the growth of company.

Gem One:

Gem one is the market leader in its category. Comparison to other brands its

effectiveness is far better. Doctors are prescribing this drug in large numbers. It

alone generates a huge amount of revenue.

But company need to always focus on this strategy so that they cant lose its

leadership in the market. Like regularity of representatives, availability of

appropriate amount of drug.

Asteride:

Asteride is not performing according to company vision; it has a low market share

than above two drugs. So company need to keep eye on this product performance.

Company need to regularly take update of this drug from representatives.

It needs to remind doctors about the product availability in the market.

According to result of analysis it has shown that on many places chemists has not

availability or knowledge about drug, so company need to strong tis distribution

units and give representative an extra task to give proper knowledge to chemists

about drug.

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CONCLUSION

Without any hesitation we can say that the unit is doing tremendously well and the sales

are increasing. Launching of drugs like Gem One, Doxobid & Asteroid works like a

panacea for increasing the sales of the company, but today looking at the competition of

the market there is an immense scope of improvement.

If we have to compete with our rivals then we have to make concrete marketing strategy

and follow it strictly. We also have to keep a keen watch on our rivals strategy and take

steps according to them.

We should create new drugs, and new process for manufacturing drugs with low cost,

effectiveness that can add to our sales. Besides we also have to work on other possible

areas of marketing like maintain good relation with doctors & chemists that can

strengthen our sales.

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BIBLIOGRAPHY

WEBSITES

1. www.drreddy.com.in

2. www.wikipedia.org

3. www.google.com
http://www.drreddy.com.in/http://www.drreddy.com.in/http://www.google.com/http://www.drreddy.com.in/http://www.google.com/

final dr reddy s (3)

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