News November

Japan Generic Drug Market Seen Luring Foreign Companies

Foreign generic drug companies are looking to increase their presence in Japan as the government pushes through plans to promote use of cheaper non-patented medicines, according to a new report.

PricewaterhouseCoopers said on Thursday that leading foreign firms believed the climate in Japan -- the world's second largest drugs market -- was about to become much more favourable.

Japan currently has one of the world's lowest rates of consumption of generic medicines, which accounted for just 16.4 percent of the market in 2005, compared with 53 percent in the United States, 55 percent in Britain and 41 percent in Germany.

But that is about to change. Faced with rising medical costs, the government has adopted a scheme under which patients can choose generics rather than more expensive brand-name drugs, if the prescribing doctor ticks a box on their prescription.

Getting doctors and patients to use the system may take time but PWC pharmaceuticals head Simon Friend believes the Japanese generics market could be about to take off.

India's Ranbaxy Laboratories Ltd increased its stake in Nihon Pharmaceutical Industry, a joint venture with Nippon Chemiphar Co Ltd <4539.T>, 12 months ago to capitalise on expansion in the generics space and others are likely to follow.

"I think you will see more deals in Japan, including Chinese generics going into Japan," Friend said.

The growth of the generics market marks the latest phase of Japan's previously closed pharmaceuticals sector opening up to foreign firms.

Makers of branded drugs including Roche Holding AG , Pfizer Inc , Merck & Co Inc and Novartis AG have all invested heavily in Japan in recent years.

While Japan's drug market is growing only slowly, reforms in the last four years have made it easier for multinationals to launch their products in the country, allowing them to gain an increased foothold.

Source http://business.scotsman.com/