Covid-19 Related Uncertainties May Continue In Current Fiscal, Says Dr. Reddy’s
Employees work in a research laboratory at the Karex Bhd. facility in Port Klang, Selangor, Malaysia. (Photographer: Samsul Said/Bloomberg)

Covid-19 Related Uncertainties May Continue In Current Fiscal, Says Dr. Reddy’s

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Though there was no major impact of the Covid-19 pandemic during the last fiscal, Dr. Reddy's Laboratories Ltd. has said the company may face some uncertainties in the current financial year.

Top officials of the company in the latest annual report said the dependence on China for the supply of intermediates and active pharmaceutical ingredients will change in future as global pharma companies will want to reduce their dependence on that country and there ought to be more backward integration as firms attempt to establish themselves as end-to-end manufacturers.

"Overall, however, there was no major impact of the pandemic on either in Q4 FY2020 or the full year FY2020. Equally, there is no denying that we may face many Covid-19 related uncertainties in FY2021. Let us touch upon a few..., K Satish Reddy, chairman, and GV Prasad, co-chairman and MD, said in their letter to shareholders.

They said if the pandemic continues for another six to eight months as it is expected to, there would be increasing delays in the treatment of other diseases as hospitals and nursing homes all over the world have already begun to push back admission of non Covid-19 patients.

"Delays in treating these patients could lead to worsening health conditions, as well as reduced demand for many pharmaceutical products," they said.

However, on the flip side, there can be an increased demand for over-the-counter medicines and the Covid-19 outbreak has seen a significant upsurge in buying of OTC medicines, especially relating to immunity enhancement, vitamins, analgesics and flu and anti-infective medication, they opined.

The stockpiling of OTC products is expected to continue in the short-term, and result in demand surges for those drugs.

Other than the race for Covid-19 vaccines, one might see some de-prioritisation on R&D and the pandemic will seriously affect medical tourism via travel restrictions which in turn, will reduce the consumption of pharmaceutical products across hospitals and selected pharma outlets, the executives said.

"Despite these significant uncertainties, we believe that successful execution of our strategy mentioned earlier - involving leadership in chosen spaces, operational excellence and continuous improvement, and patient-centric product innovation - will create the necessary levers to deal with this uncertain business environment," the duo said.

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