Dr. Reddy's

2010 could have been better. We continued on our journey to sustainability, but the pace could have been faster. We did small things, for instance, we made our buildings more environment friendly, more energy efficient, and used less energy-intensive lighting. However, these measures collectively reduced our energy and carbon footprint only by a fraction. There were some bright spots like our SEZ, where we truly pushed the envelope to embed sustainable practices and processes right from the design stage. But we expect more from ourselves.

We need to reach beyond the low hanging fruit to the next level of maturity along the sustainability curve. It has been seven years since we started tracking and reporting on performance metrics and incremental is no longer good enough. We need transformational change. We need to grow up. We know what we want to achieve, but sometimes we fail to stay on course in the face of short term pressures.

We faced a fair share of unexpected events this year. The markets experienced extraordinary turmoil. The world economy hit the bottom of its worst slump. Pricing pressures increased and so did government regulations. Markets such as Germany continued to be challenging tender-based ones. We also had to navigate two product recalls, which although should not have happened in the first place, helped us emerge stronger from the experience. Our transparency during the exercise; the speed with which we acted and the alertness of our Pharmacoviligance department were the silver lining. We also recognised the need to go beyond tailpipe quality checks and accelerated our adoption of Quality by Design (QbD) – an initiative to instill quality right from the development stage.

Our objective is to leverage sustainability to create significant stakeholder value, as opposed to merely mitigating risk. The business case for sustainability has been well-established and the philosophy is so well-entrenched that now it is non-negotiable. If today, for some reason, after all possible design interventions, process alternatives and additional equipment, we are unable to effectively treat the effluent resulting from the manufacture of a product, we will not hesitate to drop it. Though important, our products are just another milestone, not the final destination. We need to look beyond. Though our main business today is generics, our goal is to be innovators in sustainability; to discover new means and to establish new benchmarks.

Towards fulfillment of this aspiration, we have significantly enhanced leadership capacity throughout the organisation. We have built an organisation which is known to be ethical, transparent, and well-governed. The leadership team now needs to focus on creating more leaders and improve leadership behaviour across the organisation while achieving better planned, accurately budgeted and more result-oriented sustainable practices. This will allow us to achieve considerably superior rates of resource productivity across all three key resources – human resources, natural resources and financial resources – and ensure abundant supply in each stream. It should also unleash rapid innovation and establish sustainability as a powerful economic engine for the organisation.

Collaboration and symbiotic relationships are at the heart of sustainability. Collaborative approaches such as our strategic alliance with GSK to supply over 100 branded drugs, which they will market in Africa, West Asia, Asia Pacific and Latin America; the remodeling of our Discovery Research division where we will partner with diverse specialised organisations to develop new proprietary products; and the in-licensing deal with Russia's R-Pharm, will help synergistically leverage existing assets and raise the sustainability quotient for both us and our collaborators.

As we build our future, we need to continue giving space to professionals in the workplace and to go beyond legacy staffing principles to match jobs to individual competencies and ambitions, instead of just matching individuals to jobs.

In pursuit of our core goal to ‘provide affordable and innovative medicines for healthier lives’, we need to go beyond the usual to include pricing that addresses affordability and is transparent; investment in research and development that is relevant to diseases affecting large sections of society in developing and developed nations; and a collaborative approach to Intellectual Property Rights. We need to fast-track the development of our affordable biosimilars, which have proven to dramatically increase the number of patients treated. Our approach to pricing biosimilars has drastically cut costs for patients, resulting in greatly expanding the pool of patients and therefore absolute profits for the entire industry, including for the originator.

We strongly believe that business has a central - if not the leading - role to play in driving progress and change in society. While the non-profit world has a key role to play, it can never have, on its own, the resources and the reach to make all the changes that the world needs. Our social interventions continued to gain ground across all three life-altering domains of Education, Health and Livelihood.

Going forward, we wish to institutionalise a self-powered continuous cycle wherein we listen to stakeholders and to the Earth's biology, analyse humanity's social contracts, and drive change to harmoniously deliver across all three bottom lines.

We encourage you to engage with us and share your views on how we can enhance our sustainability quotient and its reporting. Do write to us.

Regards,

G.V. Prasad

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