An Unfinished Agenda: My Life in the Pharmaceutical Industry
K Anji Reddy
It is July 20, 1969. The son of a turmeric farmer in Hyderabad is glued to the radio in a tiny house, waiting nervously for a miracle to unravel hundreds of thousands of miles away. Then a voice quivers: “This was a small step by man and a giant leap by mankind”. Man just conquers the moon! Neil Armstrong sets his feet on every child’s most cherished wonder! The young Hyderabadi is so stirred by the possibility of science that he fast conjures up his own tryst with it. Years later, as he conceives what would become one of India’s largest pharmaceutical firms, Dr K Anji Reddy insists the company was set up on that fateful night of one of man’s greatest marvels in science, and not on February 24, 1984. After all, it had been there in his dreams all these years.
More than two decades pass. Reddy, now the smart overlord of a fast-growing company, Dr Reddy’s Laboratories (DRL), visits the headquarters of pharma giant Merck in New Jersey in the US. He stumbles upon a 7-ft-long sculpture of an African boy leading a blind man with a stick. The inscription below The Gift of Sight, as the sculpture is called, depicts how Merck has lent vision to so many Africans through free medicines in a bid to fight blindness as long as blindness lasts. Moved, Reddy recalls George W Merck’s business credo: “We try never to forget that medicine is for the people. It is not for profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”
An Unfinished Agenda: My Life in the Pharmaceutical Industry, Reddy’s memoir, limns, with unusual alacrity, these two incidents that shaped Reddy, the man, and Reddy, the businessman. One set him a goal and the other set him on a mission; one lent his life a purpose and the other made his life truly purposeful. The book tells the readers good science can also be good business, and robust profits and humane practices aren’t antonymous.
Published two years after Reddy died of cancer, the memoir tracks the journey of Reddy, as well as that of the industry he was associated with for almost five decades, with intermittent focus on competitors and friends. The book also presents a sort of informal history of the pharma industry during his time, laced with plenty of anecdotes.
However, running a pharmaceutical company with the zeal of a missionary had its costs and rewards. His decision to launch antibiotics—Norilet, his first major attempt at heralding an era of affordable medicines at less than half the prices of Ranbaxy and Cipla—annoyed his competitors. While demand for Norilet catapulted, the comparable antibiotics of Ranbaxy and Cipla were returned from the market within just three months. Yusuf Hamied of Cipla, a buyer of bulk drugs from DRL, was angry with Reddy for a long time before cooling down, while a lack of acquaintance with Ranbaxy’s promoters then saved him any such acrimony.
As the company grew in scale, Reddy sought to list DRL in the US. The reason: if a drug firm wanted its discovery efforts taken seriously, it needed to be listed in either New York or London because global analysts would track not only the company’s shares, but also its progress in science. But the road to New York was full of bumps—another acid test for Reddy. Just after the formal announcement on March 26, 2001, of the company’s ADR (American Depositary Receipt) issue, its stocks were hammered down on the Bombay Stock Exchange by more than 20% within a fortnight for ‘no apparent reason’. Since the reference price for the sale in New York was based on the closing price of the stock in the previous evening on the BSE (Bombay Stock Exchange), Reddy had a tough choice to make—he had to either scrap the issue or dilute higher amount of stock to raise the desired amount. Having come this far, Reddy decided to go ahead with the plan. But he made his suspicion about sabotage attempts clear when he said: “To this day, we are not aware who fixed the stock price to our disadvantage.”
Another big setback for Reddy was the acquisition of Betapharm, Germany’s fourth-largest generic company, for about $570 million in 2006, when DRL’s total revenue for the previous year had been just $370 million. DRL beat Ranbaxy to grab this company in the biggest overseas acquisition by an Indian firm until then. Betapharm had a 3.5% share in Germany’s generic market with a portfolio of 150 products and a 250-strong sales force, and seemed an ideal match to Reddy’s plan for a foothold in Europe’s largest generic market. But barely had a year passed, the German government, in a bid to cut healthcare costs of people, allowed insurance companies to call for tenders for the supply of drugs to chemists for filing prescriptions of those insured by them. Such a move effectively prevented doctors from choosing the manufacturers, rendering the vast sales staff of Betapharm largely irrelevant in the new scheme of things. Competition forced generic companies to quote heavy discounts, which hit margins and forced DRL to write off a total of R2,250 crore. Consequently, DRL reported the first loss in its history in its silver jubilee year of 2008-09.
But none of these seemed to have perturbed Reddy as much as his unfinished agenda that a new drug should come out of India, and preferably from his own stable. In fact, he had given two potential blockbuster molecules—Balaglitazar (meant for the treatment of diabetes) and Ragaglitazar (a first-in-class molecule to treat diabetes and also contain harmful cholesterol)—to Danish multi-national pharmaceutical company Novo Nordisk for development. However, allegations of harmful side-effects and safety concerns at different stages prevented Reddy’s dream from becoming a reality and the work on each of the molecules had to be suspended.
However, there were some notable firsts too. DRL was the first domestic pharma company to be listed on the NYSE (New York Stock Exchange), to license a new chemical entity (NCE) to a multi-national, to get 180-day exclusivity for a generic in the US and to market an authorised generic in the US.
Reddy’s move to elevate son-in-law GV Prasad to the post of vice-chairman, while making his son Satish managing director without causing any bad blood is commendable, especially in the context of growing feuds among members of many business families in the country over ownership and inheritance. His commitment to making India ‘the pill factory to the world’, too, must be applauded.
Despite frequent deviations in narration, Reddy’s memoir never plods with monstrous monotony. Instead, it retains a sort of welcome restraint in storytelling that is both intimate and detached. The conversational style throughout makes the reader imagine the memoir as a 248-page-long interview, replete with anecdotes and narrated with a ray of hope and some obvious disappointments.
The book steers clear of any controversy surrounding the industry, its captains or the government. Nor does it make any hard-hitting commentary on yesteryear’s control raj that stunted growth and raised questions about our poor adherence to global standards on patents. Instead, Reddy focused on an ‘unfinished agenda’ in a life that otherwise seemed so extraordinarily accomplished. This book isn’t for headline-hunters, but for newsmakers and biography lovers.