India seeks easy entry for drug cos in Japan

Economic Times | 2 Feb 2009

India seeks easy entry for drug cos in Japan

Khomba Singh & Sushmi Dey, ET Bureau

NEW DELHI: India is set to ask Japan to facilitate the entry of Indian pharmaceutical companies in the world’s second-largest drug market.

The matter will be raised when the two sides discuss a bilateral comprehensive economic partnership agreement.

In a recent meeting with pharma industry representatives, pharmaceuticals secretary Ashok Kumar said the government would ask the Japanese authorities to appoint a separate agency to help Indian companies export their medicines to Japan.

Indian companies say their penetration of the $66-billion Japanese drug market is restricted due to a host of reasons. “No Japanese agents or wholesalers are willing to sell Indian drugs. Indian companies have to hire Chinese or Korean agents to sell their drugs in Japan. There is a cartel at work in the country,” Indian Drug Manufacturers’ Association executive director Gajanan Wakankar told ET.

“Also, some specifications for even common drugs are different in Japan and the additional problem of translation results in rejection of several applications,” he added.

Indian companies are the world’s largest suppliers of generic drugs, which are low-cost versions of off-patent drugs. Currently, the generic drug penetration in Japan is about 5%, which translates to a $3-billion market. The Japanese government is making regulatory changes to promote generic drugs to reduce health care costs and expects generic drug penetration to reach 30% in volumes by 2012-13.

“With the Japanese government allowing prescription of generic drugs from April 2008, many Indian companies are eyeing the market,” a Lupin spokesman said.

However, unlike the US and Europe, generic drugs in Japan are required to have identical specifications and dissolution, and the same efficacy as the original patented drug. Besides, there is no incentive for generic companies to launch their drugs by challenging patents before their expiry in Japan. In the US, the world’s largest drug market, generic companies get market exclusivity for 180 days if they successfully challenge a patent before its expiry.

Only a few Indian companies currently have subsidiaries in Japan. While Lupin, Dr Reddy’s and Zydus Cadilla have wholly-owned units, Ranbaxy Laboratories, now owned by Japan’s Daiichi Sankyo, has a 50:50 joint venture with another local player and a marketing subsidiary.

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source: Economic Times