52 weaknesses 521 poor quality control in 2014 united

5.2 Weaknesses:
5.2.1 Poor Quality Control
In 2014, United State (US) Food and Drug Administration (FDA) banned drugs that was exports
from Sun Pharmaceutical Ltd manufacturing plants at Karkhadi, Western side of Gujarat, India.
The main concern of banning of India imported drugs was due to the poor quality control and
manufacturing lapses of the medicines. No compliance statements or records were shown on the
compliance standards from national or international authorities (such as GMP)
5.2.2 Lack of Transparency in Environment Risk Management
Sun Pharma shows a lack of transparency in their Environment Risk Management. No reports or
disclosure being recorded to show minimization environment effort made on the manufacturing
of their drugs.
5.3. Opportunities
5.3.1 Innovations in R&D
With technological development, virtual R&D processes are expected to be the norm for the
industry. The benefits include higher reliability and reduction of time required, which can benefit
pharmaceutical companies greatly in a time of intense competition and in the long term.
5.3.2. Branded and Specialty Drugs
With the changes in the lifestyle of consumers and a rise of diseases as a result of pollution, there
has been an increase in the demand for specialty drugs, especially in developed markets.
Furthermore, there is a preference for branded drugs in developed markets, creating a large
potential in this area.
5.3.3. Acquisition Potential
As a result of intense competition in the US market, pharmaceutical companies are reevaluating
their position in the market. Apart from restructuring and finding business alternatives,
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companies such as Novartis have resorted to selling off parts of their US portfolios. This creates
a potential for acquisition for existing market share in the US.
Building on the external analysis, there are a number of opportunities and threats for Sun
Pharma. First, there is a potential to expand into producing branded drugs for the developed
markets. Secondly, the ability to acquire or develop virtual R&D can provide significant
competitive advantage for Sun Pharma. Lastly, there is an opportunity to expand the company’s
market share in the form of acquisitions.
5.4. Threats
5.4.1. Intense Competition in the US Market
With the increased competition leading to price erosion, it has led to a 34% decline in revenue
from the US market for Sun Pharma. This has proven to be a major threat for Sun Pharma as a
third of its revenue is reliant on the US market. It is unlikely for the competition to slow down,
which can lead to a rise of sustainability issues for the business.
5.4.2. High Cost of Raw Materials
In addition to the price erosion, the increase in material costs as a result of the crackdown in
China further reduces the margin that Sun Pharmacan gain from their sales in the US.