AN UNFINISHED AGENDA: MY LIFE IN THE PHARMACEUTICAL INDUSTRY
K Anji Reddy
Penguin
270 pages; Rs 699
There is never a dull moment for journalists on the pharmaceutical beat: this is where high science and innovation meet intense regulation and cut-throat corporate rivalry. Kallam Anji Reddy (1940-2013) was an insider, having been a part of the pharmaceutical industry all his adult life, first as an employee of state-owned Indian Drugs & Pharmaceuticals and then as the owner of Dr Reddy's Laboratories. Reddy's autobiography, published almost two years after he died of cancer, offers good insight into how the industry evolved over the last five decades: from the absolute dominance of multinationals in the 1960s to their absolute decimation in the 1970s and the 1980s once the patent regime turned against them, and then to the new order after 2005, where there is a level playing field for all.
No less amazing is Reddy's personal journey, from the fields of rural Guntur to the corner office of one of India's most valuable drug makers with operations across the world. Most businessmen would be happy to achieve a fraction of what Reddy accomplished in his life, yet Reddy left with an unfulfilled wish - a new drug should come out of India. That he chose to call his autobiography An Unfinished Agenda shows how important it was for him. It's not that he didn't try; the closest he came to realising his dream was when he licensed two molecules to Novo Nordisk for development. Sadly, work on each was stopped before it could reach its logical conclusion. While Balaglitazar, named after God Balaji, was an improvement over a molecule indicated for the treatment of diabetes, Ragaglitazar was a first-in-class molecule that could treat diabetes and also lower harmful cholesterol and, therefore, had the potential to become a blockbuster.
That was the time that some Indians, notably Reddy, had claimed that Indian companies could develop new molecules at much lower costs than multinationals, given their strong skills in process chemistry. Multinationals, whose own pipeline of new molecules had started to look dry, along with governments and activists, keen to prune healthcare costs, began to look at India with new respect. However, after much fanfare and promise, not much came out of it. Reddy's disappointment, particularly with Ragaglitazar, which held great promise because most diabetics also have high cholesterol, is evident as one turns the pages of his book. Reddy does not brush the failure under the carpet; instead he writes extensively about it, including a whole chapter called "Graveyard of the Glitazars" (these are a category of anti-diabetes drugs that went out of favour over allegations of harmful side effects).
The other setback for Reddy was Betapharm. Dr Reddy's Laboratories acquired Germany's fourth largest generic company in 2005 for around $570 million. The move was ambitious; after all, the acquirer had revenue of $370 million for the year. At that time, it was the biggest overseas acquisition by an Indian company, even surpassing Tata Tea's buyout of Tetley. (This was before Tata Steel bought Corus, Tata Motors acquired Jaguar and Land Rover, and Hindalco purchased Novelis). Betapharm was a prize catch and more than one Indian company was interested in it, including Ranbaxy, the largest one. At the end, it became a bidding war and Dr Reddy's walked away with the German company. It had about 150 products in its portfolio and a strong sales force, which gave it a market share of 3.5 per cent, though it did not have its own manufacturing facility. This suited Reddy fine because he could gradually shift all production to his low-cost factories in India.
In 2007, the German government, alarmed by the spiralling prices of medicine, took away the power to prescribe medicine from doctors and gave it to insurance companies. As was to be expected, the insurers called for tenders and orders were placed with the lowest bidders. Apart from thinning the profit margins, this rendered the large sales force of Betapharm, which was its USP, totally useless. Dr Reddy's Laboratories was left with no choice but to write down the investment over two years and report a loss in 2008-09, its silver-jubilee year.
Those readers who have followed the current quality problems in Indian drug factories may not find much mention of them in An Unfinished Agenda. That's understandable because the crisis blew up only in the summer of 2013, after Reddy had died. Had he been alive, it is fair to assume that it would have pained him. In the book, there are frequent references to his claims of producing bulk drugs that are as pure and effective as those made by top multinationals.
The book is written with rare candour. His decision to elevate son-in-law G V Prasad to the top along with son Satish won him many admirers in the corporate world. And Reddy explains why - and how - he took this unconventional step. Most important, the book, peppered with anecdotes and medicinal history, shows that the pharmaceutical world is not just about chemical equations, and reading about it can be fun. An Unfinished Agenda should be compulsory reading for all those who want to know how India became a supplier of inexpensive medicine to the whole world.
