Dr. Reddy’s Laboratories has decided to focus on a strong pipeline of difficult-to-manufacture complex formulations as a counter to pricing pressures in the U.S. market.

“It is difficult to predict how long these trends will last,” chairman K. Satish Reddy and co-chairman and CEO G.V. Prasad said on the pricing pressure, in a letter to shareholders in the company’s annual report for 2017-18.

Instead, “our task should be to overcome this reality.” A strong pipeline of difficult-to-manufacture complex formulations that address key therapeutic needs is the way.

It ought to be “one that allows us to introduce several value-added products each year, so that each such launch steps up revenues to combat the price erosion in those products that were brought to the market earlier,” they said.

In the last fiscal, the company had filed 19 new ANDAs and one new drug application with the USFDA. As on March 31, it had 110 generic filings pending approval from the regulator. “We have to match this robust pipeline by securing timely approvals from the USFDA and complement those with rapid ramp up of production and delivery to the U.S.,” they said. On USFDA regulatory hurdles, they said DRL remained committed to following the highest standards of quality. The U.S. accounts for 52% of its global generics sales and 42% of all sales.

Emerging markets

DRL was upbeat on opportunities in emerging markets “which are now on a longer-term upswing.”

Mr. Reddy and Mr. Prasad said they hoped DRL would be able to grow revenues from “these geographies through greater sales of… generics as well as hospital and institutional sales of oncological biosimilars.

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