Dr Reddy's may set up drug unit in China

Dr Reddy's Laboratories, which has a drug manufacturing unit in China, plans to start drug development and research in that country in the next couple years.

The pharmaceutical company, which has followed a new drug discovery and research path for growth, sees India and China as two countries which are core to this strategy.

Dr Reddy's founder and chairman Anji Reddy said here on Thursday that India and China are the part of the company's strategic drug development and marketing programme.

He was speaking to media persons as the chairman of the conference committee of Chemtech-2005 which is scheduled to be held in Mumbai next month.

"The Indian pharmaceutical industry can become another success story across the world after the domestic information technology sector, if the companies are able to make use of the cost benefit that we have in drug development over other countries," he said, while stressing the need to take the low cost advantage right from the stage of drug molecule development right up to the clinical trials.

According to him, the time had come for Indian companies to focus their energies on the development of cost effective clinical trial processes so that even big pharma companies looked at India.

"This is going to happen in the next four-five year period. We have been outlicensing the drug molecules in the initial stages to big pharma firms because we have no money to spend on the clinical trials and development of the drug," he said.

"At least our company stopped the practice of out licensing of molecules three years back," he said.

According to him, India and China, which together have one-fourth of the world's population, are a good business model "" both for drug development and marketing of drugs at cheaper prices.

Dr Reddy's had in 2000 signed an agreement with the Kunshan Double-Crane Pharmaceutical Company of Jiangsu province, China and Canada Rotam Enterprises Company to establish a joint venture, Kunshan Rotam Reddy Pharmaceutical Co in China.

Dr Reddy's has a 51 per cent stake in that company at an investment of $5,610,000, while Canada Rotam Enterprises and Kunshan Double-Crane Pharma Company have stakes of 47.41 per cent and 1.59 per cent, respectively.

The Chinese venture produces bulk formulations, tablets, capsules, ointments, gels etc.

At that time Dr Reddy's chief operating officer Satish Reddy had said that the entry into China was strategic to the group's goal of emerging as a leading global player in the formulations segment.