Pharma prices will come under pressure due to customer consolidation in the US market, according to K Satish Reddy, Chairman, Dr Reddy’s Laboratories Ltd.

In the US, pharmacy retail giants and wholesale distribution companies were combining to create a larger scale of operations, including alliances with companies in Europe, Reddy said while addressing shareholders at the 30th AGM of the company held here on Thursday.

“Larger and fewer customers will lead to increasing purchasing power and put further pressure on prices. Your company will also feel some impact due to these changes,’’ he said, adding that there could be some benefit as well as Dr Reddy’s was recognised as a ‘reliable’ supplier.

Referring to a recent notification bringing 108 drugs under price control with a clause for extraordinary circumstances to the policy, Reddy said such decisions were detrimental to the health of the industry.

On industry trends, the chairman of the Hyderabad-based company said global spending on medicines was nearly $1 trillion and was expected to reach $1.2 trillion by 2017, according to IMS. Overall, generics’ spending was likely to grow from 27 per cent to 36 per cent in 2017.

G V Prasad, Co-Chairman and CEO, said the research capabilities of the company were being expanded with R&D centres in the US, the UK, the Netherlands, Hyderabad and Bangalore.

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