Japan is the second largest pharmaceutical market worldwide after the US. It is a $65 bn market. Japan spent about 9% of its GDP on healthcare in 2004. Japan’s share of people who are more than 65 years in age is about 30%, as against 19% in US and 26% in Germany. This offers a vast potential market for Indian pharma companies. Japan’s generics market is poised to increase five fold from the current $3.3 bn due to the current policies being put in place in Japan.
Indian pharma companies need to develop non-manufacturing capabilities, such as conducting bio-equivalence studies necessary for obtaining drug approvals and investing in large scale distribution capabilities to meet Japan’s mandate of national level supply. These can result from:
- Indian companies seeking Japanese partnerships instead of trying to go alone.
- Focus on generic products that build on existing assets, with better pricing and more attractive economics.
- Lobby the Japanese government to ensure a level playing field for generics to compete with branded drugs among the Japanese population.