Japan, the world's second largest pharmaceutical market, has lured many Indian companies, in spite of its low generics penetration rate The Japanese Pharma market was valued at USD 65.2 billion in 2006. At present, generics account for approximately 17 percent of the market by volume and 5 percent by value. It is expected to grow to USD 14 billion by 2010. The government is actively introducing reforms and measures to encourage low cost-high quality generics drugs, with the objective to cut the increasing healthcare spending.
Indian companies are looking at significant opportunities in the Japanese market. The growth of the generics industry in Japan is expected to be driven by a rapidly ageing population, increasing healthcare expenditure and government reforms. Since 2002, the Japanese government has introduced several legislations to promote the use of generics drugs. The generic substitution law- which was introduced in April 2006- is one of them. It is expected to be a key engine to expand Japan's generics drug market and enable medical institutions to dispense generic drugs.
KPMG Report