Friday, October 27, 2006

Gaining access to Japan’s generics market

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:

  1. Indian companies seeking Japanese partnerships instead of trying to go alone.
  2. Focus on generic products that build on existing assets, with better pricing and more attractive economics.
  3. Lobby the Japanese government to ensure a level playing field for generics to compete with branded drugs among the Japanese population.