Dr. Reddy's Laboratories (RDY) is the number one pharmaceutical company in India in terms of profitability.^[1] It's consolidated revenues decreased by 23% to Rs. 50,006 million in 2007–08 from Rs. 65,095 million in 2006–07.^[2] The reasons being, first, no major US generics launch in 2007-08 as compared to 2006–07, when its generic sales were around $750 million overall, more than half of its total revenues due to launch of Simvastatin and Finasteride, the generic versions of Zocor and Proscar respectively of Merck.^[3] Second, pricing pressures in the German generics market as well as supply chain problems with betapharm’s, Dr.Reddy's German subsidiary, contract manufacturer, Salutas.^[3] Third, the company’s Custom Pharmaceutical Services (CPS) business out of Mexico was also hindered by supply chain constraints in the beginning of 2007–08.^[3] However, both these supply chain constraints were subsequently resolved by migrating the manufacturing base to Dr. Reddy’s facility in India. And fourth, weakening of the US dollar vis-à-vis the rupee.^[3] In 2007-08 Dr.Reddy's invested a total of Rs. 6,293 million on creating new manufacturing and R&D capacities^[4] making their generics manufacturing facilities one of the largest in Asia.^[4] Dr. Reddy's is also pursuing growth in the relatively untapped biogenerics market. At the beginning of 2008, the company already produced and sold 2 different biogenerics in India and had plans to add one drug per year over the next 8 years.^[5]

Dr. Reddy's is a major seller in Europe, the US & Canada, and is a dominant player in Russian and Indian markets where it has faced limited competition in the past. Going forward however, the company will face greater competition from companies like Mylan and Barr Pharmaceuticals (BRL) which have made acquisitions in recent years (2006/2007) that have expanded their presence in international markets.

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