Pharma Trends

Japan: Lucrative market for Indian pharma companies

August 23, 2016: The recent past has seen some major Indian pharma companies making their entry into the Japanese market by means of various acquisitions. Sun Pharmaceuticals entered the Japanese market by acquiring 14 prescription brands from Swiss drug maker Novartis for $293 million in March 2016. According to the company, Japan is a strategic market for it and the acquisition marks Sun Pharma's foray into the Japanese prescription market and provides a footboard to build a larger product portfolio for the future

Lupin Ltd, India’s third largest drug maker, has bought 21 generic brands from Osaka-based Shionogi & Co. Ltd at the cost of US $150 million in August 2016. The move will help the company to strengthen its presence in the Japanese market, the second largest pharmaceutical market with a size of US$ 110 bn. The acquisition will make Lupin rank sixth among generic companies in Japan. The 21 products will cover therapeutic areas including Central Nervous System (CNS), oncology, cardiovascular and anti-infectives. Previously Lupin Ltd had made two buyouts in Japan, Kyowa Pharmaceutical Industry Co. Ltd in 2007 and I’rom Pharmaceutical Co. Ltd based out of Tokyo in 2011.Lupin earned about 10% of its total revenues to the tune of US$ 210 mn for FY16 from Japan, making it the largest Indian generic company.

Biocon has received approval from Japan for its insulin Glargine which is a significant achievement for the company and its commercial partner, FUJIFILM Pharma Co. Ltd (FFP). The company endeavours to bring high quality, yet affordable, world class products to diabetes patients in Japan. The company aims to capture a major chunk of the Japanese Glargine market of about $144 million, which is the second largest market outside of North America & Europe. The government, too on its part has recently sought for greater market access for its pharmaceutical products in order to increase its trade with the country.

Other Indian pharma companies including Dr Reddy’s Laboratories and Glenmark Pharmaceuticals Ltd, are also exploring options for entering Japanese generics market with their formulation drugs.

Japan has been a tough market for Indian companies who have struggled to break in, with a strong sense of brand consciousness. It has been difficult to get higher launch prices unless the drugs are innovative and cost effective and the Japanese pharma industry has been inward looking with preference for local companies over global companies. However, the Japanese government has set a target of reaching 80 per cent generic penetration by the end of the decade due to an ageing population and rising health costs, as a result opening up the domestic market to Indian pharmaceutical companies.


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