Keeping Cost-Competitive: Milan Kalawadia, Dr. Reddy’s

Milan Kalawadia, Senior Vice President, Head of US Commercial Operations at Dr. Reddy’s, talks to Pharm Exec about his 15+ years with the India-headquartered company, maintaining a leading position in the generics industry, and the challenges of doing business during the pandemic.

Pharm Exec: How would you describe your responsibilities with Dr. Reddy’s Laboratories?

Milan Kalawadia: My title is Senior Vice President, Head of US Commercial Operations. I have a primary responsibility for what we call our product management team. Essentially, you can think of it as our marketing function across our three main verticals in North America. I would restate that and say the three main verticals in the US generics market given that Canada is also part of the North America umbrella.

Product management/marketing is all about managing the efforts and activities within the generic marketplace. For Dr. Reddy’s this comprises of our three verticals: 1) Retail/Wholesale Rx, 2) Hospital/Institutional injectable, and 3) Private label OTC vertical, which is now beginning to expand into the Branded OTC and e-Commerce channels.

In addition to that, I am responsible for managing our Customer Service Team, based out of Shreveport, LA. Essentially, this team is critical in ensuring that we achieve our sales targets in a given month, quarter, year. I also oversee the US outbound logistics activities of our 3rd Party Logistics partner ensure efficient and timely deliveries to our customers. Finally, I manage our US portfolio activities.

The US portfolio team manages and tracks all activities related to our development portfolio as well as ideating on new selections and new products. The product ideas are for the three divisions I mentioned earlier.

How long have you been with Dr. Reddy’s and what type of different positions have you held there?

I’ve been with Dr. Reddy’s over 15 years now. I started in the finance department, and spent about two years focused on long-term planning. At that time, I reported to the North America CFO. I was focused on analytics and working with the Corporate Development teams, doing a lot of assessments and model building which gave me an opportunity when a position opened up to join our Corporate Development team.

After joining the corporate business development team, I worked on numerous transactions throughout the North America region, which included both North America generics and the Promius division. All in all, I spent about four years in business development, after which I joined the Private Label OTC division as the Head of Marketing.It was a path I was interested in pursuing as I had aspirations of getting into a formal operating role.

I spent approximately three years in the role of Head of Marketing before I was asked to step in and take over as head of both sales and marketing for the OTC Division.

In 2017, I took on additional responsibilities leading the generic injectables group. Last summer we restructured the organization and as a result I took over the responsibilities for all of the marketing functions in addition to the other responsibilities referenced previously.Also, at this time, all the heads of sales across the three units were realigned directly to the CEO of North America.

Finally, for the first seven years at Dr. Reddy’s I was responsible for the North America Investor Relations activities.

What do you find most rewarding about your role?

Obviously, the purpose and meaning has evolved over time. I think if you look at Dr. Reddy’s the company, Prasad and Satish, the founders, and the management, everyone is focused on the concept of “Good Health Can’t Wait.” This means doing everything you need to do as an organization to drive outcomes that will help the patient. It’s not only about the company continuing to drive sales and grow, it’s also what we do is for the greater good of society. And I think it’s important to have a purpose of such a nature. It’s something that I think attracts people to Dr. Reddy’s, and it’s one of the aspects that I find rewarding.

Prasad, Satish and the management team really showed that in the past year with their desire to make sure we focused on all possible treatments and solution to aid in the global pandemic.

On the subject of the pandemic, what were the biggest COVID-19 challenges you faced and what strategies did you develop to overcome them?

I think the biggest thing was just the way of working, initially. It was a struggle and many of us thought the real impediment about getting the job done would be working from home, not engaging with other team members, not engaging with vendors, suppliers and more critically customers. But, I think what evolved over time was a new way of working.

It’s meant a ton of MS TEAMs meetings, video calls, conference calls. I think the bigger challenge was more keeping contact with the customer.

One of the key aspects that developed was that most parties had some sort of supply challenges, supply disruptions, and that was a big concern for our accounts. How are you going to continue to support our business and ensure continuity of our product supply? I don’t know if you call it a strategy, or just the way we should work regardless, but the fact is that every one of our teams, from sales down to marketing, every dialogue and discussion with our customers, was driven by transparent discussion and dialogue.

We didn’t change the way we operate. It was more of just managing the challenges and hiccups that developed in the first six to eight weeks. But, once we got into a rhythm and routine, we were able to drive to a very successful outcome in my opinion.

For our fiscal 2021 we had pretty lofty sales targets, but even despite the challenges, which were most felt in our injectables hospital division, we were on budget and so given COVID and given how everything transpired globally, we had a phenomenal year.

Have there been any changes in the way you interact with pharmacies over the past few years?

Our customer base has evolved and we all have the same group of players that we’re dealing with. Over the past 10 years, the new concept of buying groups has emerged. More and more of these groups have started to pop up so we’ve got a smaller subset of customers to work with as a result of this. We’re still talking with the same pharmacies, we’re still strategizing with the same pharmacies, but when it comes to the decision-making process we’re working with these buying groups.

So, we need to understand the unique needs of these new arrangements. It’s been an interesting dynamic and it’s made it ever so critical to drive your broader strategies of launching products on time. And, having sufficient supplies on day one to be able to address your market.

How has Dr. Reddy’s focused on maintaining and improving its relationship with its customers?

The one thing that I’m proud of is that we’ve got very strong relationships with all of our key accounts and that’s from having worked closely with them for a number of years. That’s the way we do business.

We continue to work towards being transparent with our customers. We meet with them on a regular basis, although during the COVID world we couldn’t get face to face meetings so we had numerous video calls. We share insights on our portfolio strategy, meaning our upcoming launch calendars, and continued to build and forge those strong relationships. However, it ultimately comes down to three key aspects: quality of product, your ability to supply the product on time and being competitive with your price points on the product.

Those will always continue to be the three pillars. However, I think the relationships that we’ve built over the years and the transparency that we show our customers are two other key aspects of the strong relationships that we have and that we will to continue to build with our customers.

Where do you see the challenges going forward for generic drug companies in general?

It’s a very competitive marketplace. While we may feel that we’re doing something unique from a product selection standpoint, or that we have a unique capability, the reality is that if you look across the competitors out there, somebody is doing what we’re doing. One of the big challenges is you need to continue to be quick to market with products. You’ve got to continue to innovate, select the right products to develop, and quickly come up with strategies where you can try and differentiate your products.

You also need to make sure that you are as cost-competitive as possible, because the market dynamics are quite competitive and change rapidly. If you are late to market, you’re going to struggle to get market share. And, if you’re not cost-competitive, you will not succeed in a particular product and hence the long-term viability of an asset may or may not exist. On top of that, we are going to continue to grow and build our portfolio to have a very robust offering to compete with the key players in the market. The top competitors will continue to have large portfolio offerings and will need to continue to ensure that we have that value-added offering.

Is this the way that customers operate now?

That’s the norm now. Best pricing, lowest pricing is a key and it’s going to have an impact on margin profiles, but at the same time it’s a generic industry. So, the key to success is increasing the number of new products we launch every year and to be first to market. That’s going to be a critical aspect and I’m sure all generic players are focused on improving their portfolio offerings year on year.

Can you talk a little about Dr. Reddy’s Direct?

Dr. Reddy’s Direct is a home-grown platform. The idea behind it is that we see society moving towards digitalizing and digital engagement across the board. What I mean by that is Amazon and others have changed the way we operate and so we had been ideating this concept of how we provide a service that would be beneficial to our customers and help us be more efficient and effective in how we do business with customers. The Dr. Reddy’s Direct platform was specifically ideated and developed to service the hospital segment of our business.

Currently we have 15 sales reps focused on the hospital channel. However, there are 6,000+ hospitals around the U.S.It’s near impossible to call on every hospital in the marketplace.

The idea behind Dr. Reddy’s Direct was we could put our products on a platform and make them available to the hospital community for direct purchasing, thereby allowing us to process them and ship direct to the specific hospital or distribution network in the hospital area. So, the platform went live earlier this year, actually in June, and we are now in the process of securing our first orders and starting to ship product out. The concept was to create a unique platform for our customers to be able to order and receive goods and help streamline some of the efforts involved in that.