Even as the Comprehensive Economic Partnership Agreement (CEPA) in 2011 has created a favourable business environment to boost exports to Japan, India should cash in on this opportunity 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.
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, the pharmaceutical promotion council of India (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 Raghuveer Kini, executive director, Pharmexcil.
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 cost 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 Dr. P.V. Appaji, Director General, Pharmexcil.
In 2013 Pharmexcil had organized workshop with PMDA officials for getting an insight into regulatory requirements in Japan. IBEF in association with Pharmexcil had organized the Experience India programme. In this programme journalists from Japan were invited to visit Indian companies to have a first hand experience of the Indian pharma industry and write about the innovations, new product ideas and recognition in various markets of the world.
As a part of the promotion campaign, this year too, Pharmexcil is organizing an India Pavilion at CPhI Japan in Tokyo.
This time too Pharmexcil in association with Ministry of Commerce will be focusing on Brand India Pharma at the event. The council will be taking part in various seminars and business meetings to promote Brand India Pharma and exploring the opportunities for Indian companies to grab opportunities in Japan.
Coinciding with CPhI Japan, Osaka Pharmaceutical Manufacturer Association (OPMA) is organizing business meetings and seminar in Osaka on April 7. This third Indo- Japanese pharmaceutical seminar and business meeting is supported by Indian Consulate General Office in Osaka.
OPMA is organising business to business meetings for Indian Companies. Osaka has pharma cluster and OPMA is actively involved in exploring business opportunities for companies looking forward for contract manufacturing. There are about 308 OPMA members and among them several companies are working as CMO. It offers a huge opportunity for Indian companies to choose a suitable CMO company depending on the products.
Japanese API market
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 an increasingly 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 on 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 in Japan
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 antiarrhythmic 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.
Indian trade relations with Japan
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, this in effect is 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.
The growing pharma industry
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), 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 export of Japan is 158 billion in 1994 to 383 billion yen in 2004. In the span of 10 years, its export has increased by 142 per cent.
The national and local government has shown strong effort in uplifting its health care and pharmaceutical sector. 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.