BANGALORE (Reuters) - Margins at the German unit of Dr Reddy's Laboratories Ltd (REDY.BO: Quote, Profile, Research, Stock Buzz) are under pressure from regulation and growing competition, but the Indian drug maker was on track to meet its revenue forecast, its chief executive said.
Germany's Betapharm, which Dr Reddy's bought in 2006 for $572 million, has been facing supply constraints and falling prices. It has moved Betapharm's main manufacturing to India and to other facilities in Europe to lower costs.
"Pricing is under pressure, no doubt about that," G.V. Prasad said of Betapharm in an interview as part of the Reuters India Investment Summit on Wednesday.
"Margins are under pressure, they have been under pressure." However, Prasad said Dr Reddy's would meet a revenue growth forecast of 25 percent for the fiscal year to March 31, 2009, as it expects significant boost from the launch of generic version of GlaxoSmithkline's (GSK.L: Quote, Profile, Research, Stock Buzz) Imitrex tablets in the U.S. market.
Global demand for generic drugs produced by firms such as Dr Reddy's and local rival Ranbaxy Laboratories (RANB.BO: Quote, Profile, Research, Stock Buzz) is booming as nations around the world battle rising healthcare costs.
But export-driven Indian companies are facing stiff pricing pressure as more drug makers jump into the generics market.
(Additional reporting by Devidutta Tripathy and Bharghavi Nagaraju; Editing by John Mair)
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