Dr Reddy's Laboratories Ltd (DRL), India's second largest pharma company, and Fujifilm Corporation, Japan have entered into Memorandum of Understanding (MoU) to enter into an exclusive partnership in the generic drugs business for the Japanese market and to establish a joint venture in Japan. A definitive agreement will be signed during the course of the calendar year. The new joint venture will have 51 per cent stake owned by Fujifilm and 49 per cent stake owned by DRL.
The new company will develop, manufacture and promote competitive and high quality generic drugs utilizing both Fujifilm’s advanced quality control technologies it has built up through its photo film business and Dr Reddy’s expertise in cost competitive production technologies for active pharmaceutical ingredients and formulations accumulated over the years by supplying to markets globally. The joint venture intends to launch its first products in Japan in the next three to four years. The joint venture also plans to design products that fit the specific requirements of the Japanese market, aiming to deliver reliable, high quality generic drugs enabling the growth of generic drug market.
“Fujifilm continues to build upon its ongoing commitment to delivering pharmaceutical business” said Shigetaka Komori, president and chief executive officer of Fujifilm Corporation. “With the execution of the Memorandum of Understanding with Dr Reddy’s Laboratories Ltd., Fujifilm will have excellent capability in developing and manufacturing across active pharmaceutical ingredients (API) and formulations of generic drugs. Through Fujifilm’s superior material process technology and quality control system, we aim to contribute to the adoption of high quality and affordable generic drugs in Japanese market. Fujifilm will advance its effort in the pharmaceutical business using its leading-edge, proprietary technologies to help enhance the quality of life of people worldwide.”
Commenting on the partnership, GV Prasad, vice-chairman and CEO, said, “We are very excited to partner with Fujifilm Corporation, a highly reputed Japanese company and a leading global brand, to bring world-class, high quality generic drugs to the people of Japan. We are confident that Fujifilm’s advanced R&D capabilities, quality systems and market know-how backed by Dr Reddy’s cost competitive, high-quality generic drug development & manufacturing and experience as a major global generics player will help the joint venture establish a strong presence in the Japanese pharmaceutical market. Our planned entry into Japan underscores our commitment to bring affordable and innovative drugs to more patients worldwide.”
Japan is the world’s second largest pharmaceutical market, estimated to be $97b as per IMS. The Japanese generic pharmaceutical market is a very attractive one, characterized by low penetration with only about 23 per cent of Japanese prescription drug sales (by volume) contributed by generics as compared to 70 per cent by volume in the US. The Japanese government is actively promoting use of generics to alleviate patients' expense and reduce the national medical expenditure under the goal of "increasing the market share of generic drugs by sales volume to at least 30 per cent by FY2012".
Japan has a rapidly ageing demographic profile and in the first year of listing, price of generic drugs are set at 70 per cent of the innovator price. The price of the generic drugs does decline faster than for innovator products, but not as fast as in other countries such as US.