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Japan becomes a new frontier

Teva Pharmaceutical Industries is boosting production capacity for generics to be sold in Japan.

TOKYO -- Leading generic-drug makers are ready to tap into the Japanese market. The government in Tokyo recently moved to promote more use of generics in the country. It aims to raise the share of generic drug prescriptions to 80% between fiscal 2018 and 2020. The policy may change the power dynamics among foreign and Japanese drugmakers.

     South African generics maker Aspen Pharmacare Holdings on Wednesday launched operations in Japan. Aspen Japan plans to sell five generics in the country, including anti-cancer drugs. Generic drugs are copies of original brand-name medicines for which the patents have expired. Aspen will obtain permission to sell in Japan from U.K.-based GlaxoSmithKline and U.S.-based Merck, the original drugmakers. Aspen targets sales of around 6 billion yen ($48.2 million) in the first year.

     "The Japanese market is as large as the aggregate of markets in U.K., France, Germany and other advanced European nations," said Aspen Japan President Philippe Auvaro. The company will establish a production facility specifically for Japan exports at a plant it operates in western France.

     Leading Indian drugmaker Sun Pharmaceutical Industries in June released a generic version of Cravit, an original antibiotic by Japanese drugmaker Daiichi Sankyo. Sun Pharma spent three years researching the Japan market, according to the company's management. U.S.-based Allergan, the world's third largest generic-drug maker, is also considering selling generics in Japan.

     Established foreign players in the Japanese market are also expanding. In response to the expected demand increase, Teva Pharmaceutical Industries from Israel, the world's top generics maker, is boosting production capacity in Europe for generics to be sold in Japan. The company in 2011 acquired Taiyo Pharmaceutical Industry and renamed it Teva Pharma Japan. It is the third-largest generic drugmaker in Japan. 

     India's Lupin, the world's 10th-largest drugmaker, is planning to build a plant in India exclusively for the Japanese market. It will sell products through Kyowa Pharmaceutical Industry, its wholly owned subsidiary in Japan. 

     On June 30, the Japanese government approved its economic strategy for fiscal 2018-2020. The policy includes the 80% generics target. This is a big jump from the previous target of 60% by 2017.

     In fiscal 2014, Japan'sgeneric drugs market was worth 1.2 trillion yen. The entire market for pharmaceuticals was worth of 10.2 trillion yen, according to the European Federation of Pharmaceutical Industries and Associations. The federation assumes that by 2020 the entire drug market will grow to 10.9 trillion yen and that for generics to 1.9 trillion yen.

(Nikkei)

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