Ranbaxy: Competing Internationally In Generics

Categorizing companies in the pharmaceutical sector into specific slotsis gradually losing significance, according to Davinder Singh Brar, president of Ranbaxy Laboratories Ltd, speaking at the Financial Times World Pharmaceuticals conference last month (Marketletters passim).

What is now emerging is an innovation-led continuum, he said, from cost-leading bulk manufacturers to research-based companies, on which these players will position themselves in line with individual market and customer needs. The categories are no longer exclusive silos; instead, one fuses into the next, moving along the continuum.

In characterizing the generic drug industry, Mr Brar stressed the low unit margins which generics retain relative to patented prescription drugs, their constant disadvantage vis-a-vis the innovator and the critical importance of process development skills in the business, ie the know-why over the know-how in research. The emphasis is on process development skills and a lean cost structure dominated by manufacturing costs. At the lowest end, the differentiation is through price, and moving up the chain, the degree of innovation increases and differentiation is possible through marketing and technology.