Contemplating the Dr Reddy’s Model

There's been a lot of discussion lately about what the new generics model will look like, now that the "Ranbaxy model" has gone out of favor (see our recent article) and major generics manufacturers have begun partnering with major branded drugmakers (and vice versa) in an effort to create synergies and economies of scale. After decades of vitriolic competition between generic and branded, it seems like both sides are taking the "If you can't beat 'em, join 'em" route. Dr Reddy's Laboratories, India's second largest pharma company to Ranbaxy, has been mentioned as a possible merger/takeover target. But maybe Reddy's has a better model in mind, one that broadens the focus of its products and services based upon the expertise it already has in house. After all, the manufacturer has amassed a huge pool of talent and expertise over the last few decades. The company has announced plans to capitalize on this intellectual capital by expanding the services that go along with the research and manufacturing it performs. It makes sense, given the fact that many multinationals are outsourcing these functions. Reddy's may not always go it alone, but it will appear all the more attractive should a suitor come along. --PWT
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