Of course, getting into the organization and stabilizing it was something very new to me. I was 30 years old at that time. A few months into my job, there was an anti-dumping suit on us. I thought Dr. Reddy would help me, but he said, 'It's your problem, go and deal with it.' We had safety incidents in the plants. The final big one was the warning letter. The biggest thing that affected me was how I allowed this to happen. I think we could have done more in terms of innovation. And we never did any game-changing acquisition.
GV Prasad has run Dr. Reddy's for over 30 years. He's seen the US regulator FDA come knocking, lost people in plant accidents, and watched deals fall apart. He will still tell you the company should have been bolder. Most executives don't say that out loud, but he does. Now, he's not slowing down. He realizes the wide gap between discovery and clinical development, is cautious about AI in pharma, and wants half the company's revenue from innovation. That's what we have for you today. It's Monday, the 23rd of March. I'm your host and ET's pharma editor Vikas Dande. This is Corner Office Conversation.
Thank you, Prasad, for joining us for our Corner Office Conversation. I'll start with what I read in the unfinished agenda of Dr. Anji Reddy. When you came in, there was a crisis to handle and you were in the US. Can you recall some of those old days?
I joined the company in 1990. Before that, I was on the board but not active. A co-founder left, causing upheaval, and Dr. Reddy asked me to help stabilize the organization. I had some experience, and with the team's help, we built it back without missing anything. This taught me about organizational resilience and the importance of having the right people.
Would you like to remember some of your most defining moments, the toughest challenges you have faced?
Some of the toughest were getting into the organization and stabilizing it at age 30. I was concerned about letting Dr. Reddy and the people down. After that, there were several crises. An anti-dumping suit for ibuprofen in the US, which I handled at 30. The company withdrew it when the data didn't add up. Then safety incidents with lives lost, which was emotionally difficult and brought a big focus on safety. The final big one was the warning letter in 2014-15 for three sites due to laxity. It affected me deeply as I was committed to ethics and quality. We remediated and improved compliance. On the business side, we lost a case on amlodipine maleate, affecting our branded business plans. We also faced drug discovery challenges, with successes and failures, building resilience.
Sir, recently you said we should have become more bolder, and that has been one of your regrets. At the same time, Dr. Reddy's experimented the most on discovery research in India. What more could have been done?
Earlier, we were not very aggressive in investing in some businesses. We could have done more in innovation. In 2009, we moved into formulation innovation but divested it at the wrong time due to the warning letter. We were not strong in inorganic things, making one mistake and then becoming gun-shy. We never did any game-changing acquisition. Most acquisitions were incremental, not transformational.
That is true. Most of our acquisitions have been incremental, from one place to another. A word on Dr. Anji Reddy.
Dr. Reddy was a tremendous force who built the organization. I followed him, but we didn't always agree. His passion was in drug discovery, and he moved quickly into innovation. He delegated the scaling to generics to others. The lessons I learned were to delegate, trust people, and empower them. His love for science was something I inherited, though I enjoy broader aspects like process development. The third lesson was moving on from failure optimistically, which I'm still learning.
In the industry, you're seen as someone who sees the big picture. You mentioned a big storm brewing. Do you think this is the time when forces are coming together for something big?
Many big things are happening. We in the industry should be both concerned, interested, and excited. The rate at which biology and science are advancing is unprecedented. Understanding of human body, disease, aging, and cellular mechanisms is exploding. Genomics is starting to improve health. This is a period of unprecedented advancement, requiring thoughtful investment and clear focus on competition and difference.
You mentioned transformation hasn't happened much, and companies are pivoting into innovation.
I don't see a lot of that in India happening yet. We can learn from how Chinese companies emerged for innovation. The government is talking about AI, pharmaceuticals, biotech, and renewable energy. If they identify key areas and support innovation, it could be great. But AI is not yet massively transforming drug development costs or time; it helps in molecule design but the bottleneck is in drug development, not discovery. There's a hype cycle, but we need to adopt tools and change regulatory systems.
Since you haven't done something transformational, mostly incremental with setbacks, do you think big challenging bets can be taken now?
Yes, the company is much stronger in technology now. We have capabilities in mAbs, peptides, oligonucleotides, and other modalities. I want to improve these to cutting-edge. We've been discovery-rich but development-poor. I want to connect discovery to market through a strong development framework, partnership, or in-house capability. Earlier approach was organic; now we'll explore all avenues including licensing, co-development, and acquisition. Generics is still a great business with value in many markets. We're investing in branded generics in India and emerging markets, and improving portfolios in US and Europe with value-added medicines. We also moved into consumer health for stability and margin profile. Innovation will start creating impact in 5 to 10 years.
You spoke about consumer health, which many companies are entering. How do we see the men separated from the boys in this low-bar area?
Consumer health is an engine of growth with stability and better margin profile than commodity generics. It offers opportunities to innovate, build brands, and franchises. We focus only on medically proven products, using our medical perspective for better choices. This is a counter to volatility.
