Indian and Japanese pharma industries are looking to further strengthen their pharma and biotechnology bonds at the upcoming CPhI Japan expo being held from April 22-24 at the Big Sight Exhibition Center in Tokyo.
The event will be one of the biggest global platforms wherein the organizers are hosting five correlated events such as ICSE, P-MEC LABWorld, BioPh and InnoPack at one place simultaneously. In fact CPhI Japan 2015 is considered to be the ultimate one-stop-shop for all pharma relevant activity related to Japan.
Traditionally the Japanese pharma industry is very strict as far as regulatory issues are concerned. The Indian government and the industry alike are pulling out all stops and are continuously engaging with the Japanese industry, regulators and the government to streamline the shortcomings if any and further strengthening the pharma bond between the two countries.
The recent visit of Prime Minister Narendra Modi to Japan has also given confidence to investors of pharma industry. The Prime Minister’s Make in India campaign has also imbued confidence among Japanese investors and are soon expected to double their investments in India.
To further strengthen this bond among the pharma stake-holders of both the countries, the Pharmaceutical Export Promotion Council of India (Pharmexcil) is also working closely with the Department of Pharmaceutical and the Commerce Ministry of India and is also engaging with Japanese authorities to weed out the misunderstandings if any.
The council is also playing a key role in assisting the government in devising a concrete pharmaceutical export policy by way of providing updated statistics and bringing to the notice of the government the various issues concerning the industry. The council’s role is significant in bringing various stake holders of the industry on one platform and enables them to discuss issues regarding exports and solutions for the same.
Japan at present is Asia's leading pharma industry and the world's second largest pharma market. According to experts, the Japanese market is expected to be valued at US $166 billion by 2023.
In fact, Japan is the right country to find the latest technologies and innovative products. Changes in the market environment, together with an ageing population have resulted in a great drug demand, especially in the generic and biotechnology sectors.
As a part of its efforts to build new partnerships and understanding the pharmaceutical market, this time Pharmexcil is organizing buyer and sellers meet (BSM) on April 20, 2015 in Osaka and Tokyo, just one day before the main event of CPhI Japan. The council is also organizing a seminar titled "India -Japan Pharma Summit" on April 22 in Tokyo on the sidelines of Exhibition.
“Japan is a huge market for the generic players in India to tap. As the population is ageing and the demand for low cost high quality drugs is growing, it is the apt time for the Indian generic players to tap this market. Though there are some trade related and regulatory issues with regard to product registrations and fast clearance of licenses, these things are being addressed on priority and very soon we will be able to increase our exports to Japan,” says Dr. P.V. Appaji, Director General of Pharmexcil.
Until now trade promotion and market access to Japanese markets by India traders have been very limited. To open more doors for trade in the pharma and biotechnology, the Prime Minister’s ‘Tokyo declaration’ has been regarded as the key for the future explorations. “We need to develop long-term perspectives with Japan. Though a challenging market, Japan provides a huge scope for contract manufacturing and joint ventures. Off late, numerous manufacturing companies of Japan have shown keen interest in India to explore these possibilities,” said Appaji.
Though Japan remains a very challenging market, the country holds tremendous scope for Indian pharma companies. Currently Japan has a huge and well established pharmaceutical market with high quality drug standards. It is forecast to be worth US$ 166 billion by 2023.
The generics sector is forecast to be worth US$ 12.3 billion by 2015 and its volume is expected to increase over 60 per cent by 2018. As the use of generic drugs in Japan continues to expand, Japanese pharmaceutical manufacturers and traders are urgently seeking to secure new and reliable suppliers of price-competitive – and high-quality - pharmaceutical ingredients. This trend is providing profitable new business opportunities to international API suppliers as well as for India
Tokyo declaration and CEPA
While Comprehensive Economic Partnership Agreement (CEPA) signed between India and Japan in 2011 has created a favourable business environment to boost exports to Japan, the recent Tokyo declaration signed by Narendra Modi and Japanese prime minister has given a further boost to India’s trade with Japan.
As India is eager to make a mark in the Asian region, it is high time for our policy-makers and the industry players to cash in on these opportunities and help the industry to boost its generic exports to Japan, opine industry experts.
Having signed CEPA just three years back, there is still a long way for India to explore the Japanese markets. By 2023, India is expecting to push its generic exports into the Japanese market, which is under pressure from its domestic healthcare sector for low cost, high quality medicines.
With the recent Tokyo declaration, Japan is also keenly looking forward to seek a higher degree, closer and richer relationship with India. The Tokyo Declaration is expected to help the two countries to enhance co-operation, in the cutting-edge fields such as life sciences including stem cell research and other scientific areas.
Brand India Pharma
After successfully taping western markets like USA, EU and even the African and Latin American countries with its high quality generics, now India is trying to promote its Brand India Pharma image in Japan.
Traditionally the Japanese pharma industry is highly regulated and a tough market to enter. But with CEPA, Indian pharma can expect faster product registration and reduction in tariff barriers which will enhance the prospects of exports to Japan in the near future.
Earlier in 2013, Pharmexcil had organized an interactive meeting with PDMA (Pharmaceuticals Medical Devices Agency) officials from Japan for clarifications about CEPA and regulatory aspects.
“Signing of CEPA has opened up huge opportunities for India to export its generic medicines to Japan. CEPA will ensure that Indian companies exporting to Japan will be treated at par with Japanese or any other companies from other countries doing business in Japan,” opined Appaji.
With easier regulations and faster product registrations and decreased tariff barriers, Japan holds a $ 30 billion generic market to tap. “Realizing the huge pharma export potential for Indian generics into Japan, Pharmexcil in association with IBEF has been relentlessly working for promoting ‘Brand India Pharma’ at CPhI Japan on a regular basis. During the past few years, we could create a lot of awareness about Indian pharma industry and its strengths. All our collective efforts will yield results only through continued participation and keen interest in exploring business opportunities in Japan", he added.
"Being fully aware of the high benchmarks, strict regulatory compliance and the costs attached with it, we feel that an open interaction with industry will certainly help us to get a better insight into requirement for becoming PMDA compliant, support expected from government for capacity development, market strategy for Japan etc,” said Appaji.
API market in Japan
As it is estimated that the Asian active pharmaceutical ingredient (API) markets are going to touch $ 50 billion by 2017, from the current $33 billion, industry experts are of the view that India, Japan and China will have a major stake in the region.
The API market in Asia is growing at a rapid pace. From 2007 to 2011, it went from 24.5 to 28.5 per cent of the world market. From now through 2017, it is likely expand at a rate of 8.2 per cent annually.
Japan has been leading the rest of Asia in demand for APIs. In 2013, the market for APIs in Japan was the largest in Asia, crossing $18 billion. Many foreign API firms from India, Europe and the US are actively selling their APIs in the Japanese market.
Japan’s share of innovator APIs is high, and demand is growing especially in the biotech drug sector. But API generics have also started to gain ground in Japan. Chinese and Indian firms have recently flooded Japan’s market with inexpensive APIs. The accompanying price competition has forced some of the Japanese API manufacturers out of domestic market. The drug regulator PMDA provides simple consultation sessions for matters relating to DMF registration.
Foreign companies
An increasing number of foreign pharmaceutical companies are selling APIs in Japan. They sell to domestic drug manufacturers as well as to foreign drug companies manufacturing products in Japan.
In February 2012, Pfizer Japan launched two new APIs in Japan. One was part of the diabetes treatment glimepiride (Amaryl), while another was part of the anti-arrhythmic agent pilsicainide (Sunrythum). Aside from these two APIs, Pfizer Japan launched another 16 APIs in Japan in 2012.
If foreign API manufacturers, especially countries such as India, pay attention to the Japanese API market, they will find excellent sales opportunities, especially in the innovative and generic API segments.
Indo- Japanese trade
A few years back, Japan had decided to switch from expensive patented drugs to cheaper generic versions. Also, the expiry of patents of several block-buster drugs, threw up an opportunity for generic drug makers, and, in turn, for API makers who supply ingredients to formulation makers.
Japan has emerged as a focus market for Indian bulk drug makers. The Active API makers like Ahmadabad-based Dishman Pharmaceuticals, Hyderabad-based Suven Life sciences and Chandigarh-based Ind-Swift Labs have initiated steps to tap the Japanese market.
However everything is not rosy. The USFDA scrutiny of Ranbaxy facility is a pointer to this. While this is not the first instance in the world that pharmaceutical alliances have to undergo a rough patch, in fact it is an effect of a course correction for ensuring quality and compliance where human health is involved. India also has a free trade agreement with Japan, which also aids in forming alliances with Japanese companies.
Japanese pharma growth
The Japanese pharmaceutical market is the world’s second largest next to the US, with annual sales of more than six trillion yen. However the sale for generic drugs is just 10 per cent of this market value compared to other developed countries which is around 50 per cent. Generic drugs are not yet that popular in Japan as compared to other countries.
However a recent survey by Sawai, a local generics medicine company, showed that 94.5 per cent of the respondents were willing to use generic medicine and it is also estimated that by 2011, expenditure on generics would reach around 1.2 trillion yen.
Based on Japan Pharmaceutical Manufacturer’s Association (JPMA) data, the growth in pharmaceutical import from 1994 to 2004, 432 billion yen to 769 billion yen is equal to 78 per cent increase. Moreover, the exports from Japan which was 158 billion in 1994 rose to 383 billion yen in 2004. In a span of 10 years, its exports have increased by 142 per cent.
The national and local governments have put in strong efforts in uplifting its health care and pharmaceutical sectors. Both promote partnering with international companies to develop plans for R&D and to provide services in the field of medical devices for senior citizens.
Companies such as - Astellas Pharma Inc, Daiichi Sankyo Ltd., Eisia Ltd., Otsuka Holdings Ltd, Takeda Pharmaceutical Ltd. are some of the major players in the Japanese pharmaceutical markets. Some are even looking to build regional research centres aimed at bringing together advanced healthcare technologies.
According to S.V. Krishna Prasad, CEO and MD of Cito Healthcare Pvt Ltd, the ethical pharmaceutical production has seen an increasing trend in Japan. Particularly the cardiovascular categories of medicines have shown an increase of 22 per cent. The other therapeutic categories which have witnessed an increased volume of production include gastrointestinal, CNS, antibiotics, blood / humoral products, biologicals, dermatological, anti-allergic, chemotherapeutic, and anti-neoplastic vitamins.