Sun Pharma: From 10k to 2.7 Lakh Crore Valuation, India’s Top Pharma Giant

Sun Pharma: The Journey of India’s Pharmaceutical Giant

Sun Pharma is the largest pharmaceutical company in the country. It started by manufacturing medicines for mental patients. It also used to cost only 10,000 rupees. Today, 40 years later, the company’s net worth is over 1 lakh crore rupees.

Currently, the company is in the news because it has also been affected by the conflict between Israel and Hamas. In fact, Taro Pharma Company has a 78.5% share of Israel. Due to the ongoing conflicts in Israel, the company’s operations have come to a standstill. This has had an impact on production.

Today, in the mega empire, let’s learn the story of Sun Pharma…

There was a family in Calcutta. Sun Pharma’s founder, Dilip Shanghvi, was born here. In the year 1955, his father was a pharmaceutical distributor in Kolkata. Dilip began to help his father in his work. During this work, he realized that they could manufacture medicines that their business could sell. This could be more profitable. It would also create a name.

Dilip put his idea into action. He got his first loan in 1983. At that time, he didn’t even have any money. In this situation, he borrowed 10,000 rupees from his father.

To start the new business, they chose Gujarat. It was a state where the culture of doing business prevailed. They came to the city of Vapi in Gujarat. Here, he established a pharmaceutical factory. Thus, at the young age of 27, Dilip Shanghvi started the pharmaceutical company named Sun Pharma.

Sun Pharma expanded its work internationally to increase sales and profits. Dilip Shanghvi focused on the international market. This included countries like the United States, Japan, Russia, and Israel. The company first started in the US in 1997 with the acquisition of Caraco Pharma.

Later, they acquired companies like DUSA and URL Pharma. Then they acquired Taro Pharma in Israel. Within the country too, they conducted a total of 53 mergers and acquisitions.

For Sun Pharma, the period from 2014 to 2018 was the worst in terms of human resource management. This was the time when the company ventured into the generic drug market. It emerged as the largest generic drug company in the United States. However, it faced difficulties in the American drug market. There, drug prices skyrocketed. American pharmaceutical companies accused Sun Pharma of poor quality control and manufacturing.

This had such a severe impact that the company was forced to recall its products from the American market. The Food and Drug Administration (FDA) also issued warning letters to Sun Pharma.

The consequences were so serious that 40% of the company’s revenue came from the American market, which reduced to 27%. The company now derives 20% of its revenue from emerging markets where it has newly entered. Besides, 13% of the revenue comes from other countries in the world.

Unethical practices for boosting sales

Sun Pharma constantly faced questions about its marketing strategies. It is said that all the pharmaceutical companies that started in India in the 1990s have not been able to stay away from controversies. Their marketing methods have always come under question.

Sun Pharma maintained long-term relationships with doctors and medical professionals. In this regard, the company’s Medical Representation (MR) had a direct impact on the doctors. However, the company did not experience any backlash even after taking doctors’ help in meeting patients, writing prescriptions, and promoting product sales.

It is also said that the company took such a measure as it maintained long-term relationships with doctors, paid them consultation fees and other benefits, and divided them into three categories: high, medium, and low.

It should also be noted that every pharmaceutical company in India has adopted such practices, and the government has not been able to distance itself from them. It has always questioned the marketing of these companies. Sun Pharma’s marketing has always been below scrutiny.

The company was always able to maintain the attention of doctors and medical professionals through these methods. While MRs took doctors to lunches and dinners, the company also hosted dinners, conferences, and symposia to maintain long-term relationships with the medical community. In this way, the company effectively targeted doctors of different specialties. So far, the company has not faced backlash in these activities.