DRL CASE

STUDY
Prepared by Group 3
Prabin Paudel
Shailesh Lamichhane
Govind Sah
Urmila Malla

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)

Contd.

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

THANK YOU