Dr Reddy's against govt suggestions on pharma industry

"Price controls in the long run will never serve the purpose of the Indian Pharma industry," K Satish Reddy, Managing Director, Dr Reddy's Laboratories said. The parliamentary standing committee on health and family welfare, in its report, had suggested a series of measures like increasing the number of drugs under price control, a blanket cap on profit margins of all medicines and promoting the use of generic drugs to make it more affordable and accessible to the common man.

"The products which are under price control have actually stifled the profitability of companies. That's something which, has to be taken into notice. We have to understand what happens to Indian companies if the government is going to dictate how much of a profit the company has to make," Satish Reddy said on the sidelines of pharma CEOs conclave, organised here by Pharmexcil.

"When there is so much of competition, when there are so many brands available, there is so much choice available at this point of time, that has brought the prices down," he said. "So where is the need for government to step in again to say that when the prices have gone down they should still further control the prices by taking a cost plus model which is where the issue is," he added.

Reddy said a lot of investment was required in drug research and the industry had to invest on their own due to the lack of government support. "Indian companies have now proved their capabilities in higher value added research. That requires funding and requires profits to be made. There is no government funding for that," he said.

He said Dr Reddy's had been in the research for the past 15 years and was yet to see a product in the market. Reddy called for a public-private partnership in drug research.
On the company targets of achieving USD three billion turnover by 2013, he said it was a directional one and should not be as taken as guidance.

He said the Indian and Russian markets would continue to grow in double digits and Betapharm -- the German arm of Dr Reddy’s -- was on profit track.