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, 12
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.
You've reached the end of your free preview.
Want to read all 19 pages?
- Summer '18
- Generic drug, Sun Pharmaceutical Industries Ltd