Develop entire value chain: Dr Reddy's MD tells pharma companies

US-China trade war is going to give us a window of opportunity to expand our industry, says G V Prasad

Indian pharmaceutical companies need to undertake both backward and forward integration in the aftermath of US-China trade tensions, says G V Prasad, co-chairman and managing director of Dr Reddy's Laboratories.

Also chairman of the Confederation of Indian Industry's national committee on pharmaceuticals, he spoke on the issue in Hyderabad on Thursday.

Indian companies have been dependent on drug intermediates produced by Chinese firms, owing to the latter's cheaper prices. However, says Prasad, the situation has changed with the American government's tough stance on Chinese products; also, from the shutting down by China itself of low-value and highly polluting chemical and intermediate manufacturing units.

“It is true that the US-China trade war is going to give us a window of opportunity to expand our industry. Also, China on its own is exiting low value-added chemicals manufacturing. So, we have no alternative but to make those raw materials locally. Either way, backward and forward integration by Indian pharma companies has become a need of the hour,” he explained. 

The relevance of Indian pharma as a provider of affordable alternatives to the world is intact, he feels. America, for one, has saved $80 billion in health care costs on account of the affordable generic medicines produced and sold by Indian firms. 

Even China presents a big market opportunity for Indian generics, since the government there has realised the significance of affordable medicines for its people. Beijing has started opening the doors for Indian generics, in the wake of the high cost cancer therapies in China, he said.

Prasad says the issue in India is not affordability but lack of robust health insurance and negligible focus on preventive and primary health care.