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DRL CASE STUDY

Prepared by Astha Bishnoi Ashutosh Ranjan Diksha Uniyal Nikhil Sharma Nirankar Royal Swimmi Alaska

Basis of success of DRL prior to mid-90s

Reverse Engineering
Variant of new drug at low cost Process innovation Speed

Looking at drug which have high growth and less sensitive to price fluctuation like anti-ulcerants Indian patent act, DCPO were favorable Two pronged approach towards export
Exported to countries where patents had expired DRL adopted the route of exporting penultimate stage intermediates for bulk drugs

Contd:

Weak intellectual property rights which facilitated reverse engineering Methyldopa choice of product and timing of entry Foreign exchange regulation act Compare to US & Europe, production cost is less in India Produce bulk drugs where margin was good In 1990, dropping of anti-dumping charges which resulted in publicity Exploitation of HW act (ANDA)

Started research programs by investing 4% of revenue


Molecular

restructuring Set up new drug development research (NDDR)

Post mid 90s

Focus on two different segments


Capacity expansion Building brands

Manufacture generics going off patent and innovator tie-ups Distribution system was reorganized Joint ventures in foreign markets
Countries with high population Per capita consumption of medicines is high Proximity to markets in near by countries e.g. Egypt, Brazil Drug patent law not strongly in force

Contd:

Acquisition of brands instead of company for short-term growth Tied-up with US firms for exporting drugs Fully owned subsidiary in US Marketing join ventures in Brazil Co-marketing and development agreement with Par Pharmaceuticals

Contd:

Drug discovery focus on creating a lead molecule (NCE) and selling it. DRL acquired ARL because of which it got five complementary brand, 3 manufacturing plants & 450 trained field staff. Licensed to multi-nationals for clinical trials and marketing Focused on areas of growing concern like diabetes and cancer

Contd:

OTC and NDDS Value added and Branded Generics Conventional Dosage Forms Commodity Generics

Intermediate and Bulk Drug Substances

Post TRIPs Era

Should focus more on R&D for new chemical entities (NCE) U.S. FDI compliant to harness the growth opportunity in areas of contract manufacturing and research as US$45 billion of drugs would go off patent by 2007 in us alone Increase in U.S. ANDA fillings Exploring new markets Tie-up with foreign companies to in-license drugs Acquisition to become big firm Roches API business, Betapharm

R & D expenditure of DRL


number
40

35

30

25

20

nu

15

10

0 2005 2006 2007 2008 2009

Patents granted in USPTA


number
60

50

40

30

number

20

10

0 UPTO 2004 2005 2006 2007 2008 2009

ANDA Fillings
ANDA fillings
60

50

40

30

number

20

10

0 UPTO 2004 2005 2006 2007 2008 2009

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