Profile: Dr Reddy's CEO on mass exits, listening to parents & architecture
This article was originally published in Scrip
Dr Reddy's Laboratories' CEO, GV Prasad, recounts how he has weathered many a crisis – including handling a mass exit at a group company, Cheminor, the very day he took over the top job there.
That he could swiftly set things in order is evident from the memoirs of Dr Reddy's founder and Mr Prasad's father-in-law, the late Dr Anji Reddy. In An Unfinished Agenda, Dr Anji Reddy writes that Prasad did a ''wonderful job of calming the panic and rallying the senior management'' and describes how that very month Cheminor set ''several new records'' in production. Cheminor, founded by Dr Anji Reddy in partnership with Murali Divi (now chairman of Divis Laboratories), was merged with Dr Reddy's Laboratories in 2000.
''Crises have made us stronger,'' Mr Prasad says in a candid interaction with Scrip as part of our ongoing new executive profile series. A self-confessed non-engineering mind and someone who admires ''eco-friendly spaces'', he also believes that India's achievements in generics and active pharmaceutical ingredients (APIs) are ''undersold'' and ''under-appreciated''.
GV Prasad, CEO of Dr Reddy's Laboratories
Scrip: What are the key things that shaped you when growing up? Always the bright kid with a degree in engineering, medicine on your mind?
GV Prasad: I grew up, for the most part, in a small town called Nellore. A small town environment has its pluses and minuses – the former being that you could easily understand and be part of the community. The minuses meant fewer opportunities to learn than if you were in a big city. But it also instilled in me a spirit of competitiveness, along with a need to excel and do something significant. I went to college in Chennai and was immediately disappointed. I realized this wasn't what I was looking for and moved on to the US. My stint in the US was really interesting – lots of learning and plenty of interesting opportunities to experience life in its various forms. I first obtained an engineering degree from the Illinois Institute of Technology, Chicago, and then, onward to Purdue University to do a master's in management. I found it relatively easy to perform and be at the top of my class over there, as opposed to India, where one has to work very hard to get to the top. I did not focus as much on studies there as I did on everything else the country had to offer.
Scrip: The one fortuitous meeting that changed your life or perhaps drew you to the pharma industry?
GVP: Sometimes you are influenced by fate. My father had a business that manufactured branded detergents, which was later acquired by Shaw Wallace. Predictably, he advised me to take up chemical engineering so that I could join the family business. However, by the time I finished my engineering, he had exited the detergent manufacturing business, and turned his attention to the family construction business instead. I took up chemical engineering mainly because we had a consumer goods business, even though I didn't really enjoy engineering. I do not have an "engineer's mind". Engineering has things like approximation, thumb rules, empirical studies and such like. I, on the other hand, always liked theoretical studies, logic and exactness, which fall more into the math or science stream. All the same, I did my engineering because, in my day, you listened to your parents, unlike today's generation which is far more independent in their thinking.
So, although I joined my family business, I always wanted to do something in the pharmaceutical segment. I started an active pharmaceutical ingredients (API) facility in the mid-80s. The business was acquired by Dr Reddy's when they were looking to add capacity. After this, I went back to construction but continued to be on the board of both Dr Reddy's and Cheminor. Then there was the management challenge at Cheminor, at which point Dr Anji Reddy asked me to step in.
Scrip: The top job amid expectations, pressures and more?
GVP: I always interacted with Dr Anji Reddy, even when I was not in the pharmaceutical business. He used to call me for a post lunch chat during which we would discuss topics such as strategy, science, molecules and so on. Although I was parachuted into the top job, perhaps without too much operational experience, I was somewhat prepared for it. Dr Anji Reddy gave me lot of autonomy and encouragement and I had an enormous runway to make an impact. For instance, I discontinued three businesses, including diagnostics and leasing. Having done this, I turned my attention to building several others such as the US and European generics business and our custom pharmaceutical and services business. Dr Anji Reddy believed in people a lot. He taught me to trust people, think of the big picture and be optimistic in the face of difficulties. I helped with shaping the culture of the organization into one that professionals could thrive in. I also helped with improving the governance processes and enhancing the depth of our science and technology capabilities.
Scrip: So, probably Dr Anji Reddy was one of your biggest influencers?
GVP: I'm influenced by a lot of things. Dr Anji Reddy gave me a wonderful opportunity to lead this great company. He encouraged me and empowered me to build the company beyond his own ideas. In many ways, we are very different from each other, but yes, he has been a big influence on me. My father and Dr Anji Reddy too are very different people. Dr, Anji Reddy was very 'big picture-oriented', so I learnt to look at the forest from him, whereas my father is very detail oriented, so from him, I learnt to look at the trees. I was fortunate to have both of these powerful influences that helped shape my life.
Scrip: What has your proudest moment been…and the toughest ones?
GVP: To be honest, I remember the tough moments more than the proud ones. For instance, when I joined the company [Cheminor], it was relatively small – around $20m+ in revenues or thereabouts. Our major product then was ibuprofen. The very day I took over there was an exodus of about 200 employees from a workforce of 300! Then 15 days later I got hit with an anti-dumping lawsuit from the US, which potentially could pretty much have finished our business, since ibuprofen was a significant revenue product for us at that time. There were a series of tough moments, but each challenge made the company stronger and more resilient. The first crisis, during which the team deserted me, gave me a great opportunity to rebuild a team that was not dependent on individuals, but could hold their own, even if someone left the company. This was a turning point for us in terms of attaining a position of strength in our operations and functioning. Then there was the issue of anti-dumping, which we assessed was a result of us being heavily reliant on a one single product. We quickly corrected this by expanding our portfolio so as to ensure that we are not largely dependent on just one or two products. We also developed a deeper understanding of the markets we operate in so as to position ourselves to serve them better.
Each of these crises played a role in shaping us into stronger, more mature people and organization. We very quickly realized that the high one gets from periodic successes, such as a 180 day exclusivity that enables you to turn in gold revenues, has a shelf life and does not last forever. So, I guess it would be safe to say that while success gave temporary happiness, crises made us stronger.
Scrip: Who do you admire in the industry, and why?
GVP: There are many. But, if I were forced to pick a couple, I would say one of them is Dilip Shanghvi, of Sun Pharma. I think Dilip has done a brilliant job of buying undervalued assets and turning them around. He seems to possess an incredible sixth sense when it comes to recognizing potential value. Few others have been able to replicate this. Another leader I admire is Glenn Saldanha of Glenmark. Glen has done a wonderful job of building a business model based on drug discovery. Both of these leaders are not technical people, but have a very sharp understanding of where value lies. Then there is Dr Yusuf Hamied, chairman of Cipla, who I respect as someone who is able to see the bigger picture so adroitly, especially when it comes to people needing access to HIV or cancer drugs. That is very inspiring as well. I was amazed to discover that he has a visitor's book signed by Mahatma Gandhi. Dr Hamied said to me "Gandhi told us to make medicines affordable". One has to respect a person who holds such deep values, such a higher purpose and also manages a company, with a unique culture of its own, so well. From an organization perspective, on a global stage, Merck has always been a very interesting company from the science standpoint and one which I believe a lot of valuable lessons can be drawn from.
Scrip: How do you step back and get perspective?
GVP: One important thing is to be able to create personal time for one's self and not be operational on a 24/7 basis. I have a set of wonderful colleagues who work so hard, that fortunately, I don't need to know everything that is happening, in every factory or every market. They pretty much own their job and bat independently. That allows me the mental space to think of the long term, and ponder over what the important issues are that I should really devote my energies towards. For every CEO, it is very important to create that space for themselves. I like to keep my schedule, while ensuring that it is not packed to a point where I cannot find time for myself.
Scrip: You've been an avid bird watcher, admirer of nature…any lessons, is there also a Jonathan Livingston Seagull in you somewhere?
GVP: I wouldn't call it quite that, but somewhere, my values in conservation, reducing the carbon footprint of the company and driving environmental initiatives are influenced by my respect for nature. I think we could do a lot more, but people have more important priorities too. Sometimes I have to remind them of the importance of sustainability. The message we give our stakeholders is that we are a very responsible company when it comes to protecting our environment. We must live by that commitment.
Scrip: If you weren't a pharma executive, what would you be?
GVP: I'd be an architect. I love architecture, creating eco-friendly spaces.
Scrip: Patents, Big Pharma or red tape…the bigger 'evil' against patient access?
GVP: It is the Indian context I really worry about. Globally, governments of several countries have embraced healthcare as their responsibility; it forms a large portion of their budgets. In India, on the other hand it is way off the mark. If a public health crisis hits us, we gear up and tackle it, most often on a reactive basis. But, what about the day-to-day issues of healthcare? I wouldn't call it red tape so much as a crying need for the government to embrace the health of the population as a responsibility. We are still some way away from that scenario as of now and one can only hope it changes fast.
Scrip: Digitalization, use of health apps….time for pharma firms to get real serious?
GVP: I don't want to use the use term ''apps''. Technology will reshape industry by way of integrating technologies such as devices, highly sensitive sensors, big data, and electronic medical records. Also, using digital strategies for monitoring clinical trials is not too far away. Today trials on these fronts are rather close chested by innovators and researchers. I'm very excited about the possibilities of technology in healthcare. We've already heard about scanning your blood stream on a live basis and understanding what is happening in real time. Such innovations will change the definition of how you manage your health. It's a matter of time before the whole definition of life will change and life spans will increase tremendously. You are fighting biology with infinitely more powerful tools. The process of aging is bound to change.
Scrip: Indian NCE research efforts: high potential or still hype at this stage?
GVP: I think it gets more attention than it deserves. As a result, our incredible achievements in generics and APIs are undervalued. Look at the difference we made to the world in bringing affordable medicines to every market. India is a great story for HIV, and cancer medicines, in terms of bringing down the cost of drugs in various corners of the world. The contribution that the Indian API and generic industry has made to the world is under-recognized and under-appreciated. By any yardstick, we have made a huge positive impact on global healthcare.