TOKYO -- Japan's Nichi-Iko Pharmaceutical seeks to crack the U.S. market with brand-new drugs -- not the generic drugs the company is known for -- as the domestic market is expected to stop growing in the long run.
The Japanese market for generics is expanding as the government strives to increase the share of these drugs in prescriptions to more than 80% by fiscal 2020. But concerns are strong that drug prices will eventually fall and the market will contract, prompting some generics makers to look overseas.
Nichi-Iko, the largest generic-drug company in Japan, plans to apply next year for approval from the U.S. Food and Drug Administration to manufacture one brand-new drug. It hopes to gain approval in 2018 and generate annual sales of 3 billion yen ($25.2 million).
The company believes it will be able to develop drugs more efficiently in the U.S., where finding institutions carrying out clinical trials is relatively easy. It also hopes that brand-new drugs will bring it higher profit margins than generics.
Nichi-Iko is also preparing U.S. sales of biosimilars.
Sawai Pharmaceutical, the No. 2 generics player in Japan, is also eyeing the U.S. market. Unlike Nichi-Iko, Sawai will release generics there. It has applied for FDA approval for its generic version of the Livalo lipid-lowering agent and expects to start selling it as early as March 2018.