Japan: The new medicine hub

Japan seems to have become the new ‘best medicine’ for Indian drug makers who are flocking to the country, as the regulatory framework becomes more welcoming in the country.

With annual sales of over $60 billion, Japan has become the second largest pharmaceutical market after the US.

With the Ranbaxy-Daiichi deal, Japanese market has come in to lime light and the market talk has it that Dr Reddys maybe finalising a JV there this week. Smaller drug maker Lupin Ltd too is set to expand its business by making huge investments there.
"We are making a total $1 billion dollar investment this year and about 90 million goes to Japan which is 10%," said D B Gupta, Chairman, Lupin.

Analysts say the Japanese generics market is expected to jump from 10% now to about 30-35% by 2010. Nearly 60 billion worth of drugs will be going off patent in Japan in the coming few years, a jackpot eyed by Indian companies.

Under the burden of heavy healthcare costs, the Japanese government is making regulatory changes to promote cheaper generic drugs and tie-up with a Japanese firm is not mandatory anymore.
Penetration of generics in Japan is still quite low, but is seen growing rapidly in next few years, given the big moves Indian players are making in that space with the cost-advantage and credibility also favouring Indian exports.