India Pharma Outlook Team | Thursday, 23 July 2026
Dr Reddy's API fix has cleared the way for the return of generic semaglutide supplies by November.
The company expects production to resume after resolving a quality issue linked to the active pharmaceutical ingredient.
The restart is expected to strengthen its presence in the growing diabetes and obesity treatment market. The company is also targeting production of 6-7 million pens during the second half of FY27.
The temporary disruption had delayed commercial supplies in India and Canada. Company executives said the manufacturing issue has now been addressed.
Fresh batches are expected to reach the market from November. The product remains one of Dr Reddy's key growth drivers after the patent expiry of the original medicine in India.
The company had paused commercial supplies after detecting an impurity during the scale-up validation process. The issue was related to the active pharmaceutical ingredient used in semaglutide production.
According to the management, the problem was identified before it led to any product recall. The company completed corrective measures and is preparing to restart supplies. The company's Chief Executive Officer Erez Israeli said commercial supplies should resume by November. The company expects production to increase steadily after the restart.
Dr Reddy's aims to manufacture around 6-7 million pens during the second half of FY27. These supplies will mainly serve India and Canada.
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The supply disruption affected the company's financial performance during the quarter. Dr Reddy's said the issue resulted in an estimated impact of around Rs 240 crore. This included inventory-related provisions caused by the temporary production halt.
The company also faced higher freight and solvent costs during the quarter. These factors added pressure on operating margins. Several brokerages lowered their earnings estimates following the quarterly results. However, many analysts believe the November restart could support revenue recovery in the coming quarters.
Semaglutide has become one of the world's fastest-growing medicines for diabetes and weight management. Demand has increased rapidly after the success of branded GLP-1 therapies.
India's patent expiry has opened the market for several domestic pharmaceutical companies. This has created new opportunities for affordable generic versions. For Dr Reddy's, restoring uninterrupted supplies is important for future growth. A successful restart could help the company strengthen its position in the expanding GLP-1 market.
The company expects demand to remain strong as more patients seek affordable treatments for diabetes and obesity. The planned November relaunch is expected to play a major role in its growth strategy.
Dr Reddy's Laboratories is a Hyderabad-based pharmaceutical company that develops, manufactures, and markets generic medicines, biosimilars, and active pharmaceutical ingredients. The company operates in more than 60 countries and serves major markets including India, North America, and Europe.
