Japan being one among the highly regulated markets for pharmaceutical and healthcare products in the world, it is not easy for the Indian exporters to enter its market. However all this are about to change soon. Indications from the recent India-Japan Business Leader’s Forum (IJBLF) held recently in Tokyo are a pointer to this.

The Emperor and Empress of Japan are set to visit India around end of this year. This has never happened before. Also, Japan is set to invest $25 billion by 2015. All these are positive signals for the overall improvement of trade with Japan and especially for pharma trade.

With an aim to improving export of generic drugs to Japanese markets, export promotion councils like Pharmexcil are taking a number of initiatives.“Being fully aware of the high benchmarks, strict regulatory compliances and the cost attached with it, we feel that an open interaction with industry will certainly help us provide better insight into various aspects like Japanese requirement for becoming pharmaceuticals and medical devices agency (PMDA) compliant, support expected from government for capacity development, market strategy for Japan etc,” said Raghuveer Kini, executive director, Pharmexcil.

Earlier in august 2011 India and Japan had signed Comprehensive Economic Partnership Agreement (CEPA) for liberalization and facilitation of trade as well as investment between the two countries. Since then it has opened up huge opportunities for generic medicines in Japan. CEPA will ensure that Indian companies exporting to Japan will be treated at par with Japanese /any other companies from other countries doing business in Japan.

With a market potential of $30 billion for generics drugs, Japan promises to be a huge market for India. Further, Pharmexcil, in association with IBEF launched Brand India Pharma Campaign in Japan to create awareness about pharmaceuticals products from India, its strength and recognition in highly regulated markets.

For providing insight into regulatory requirements in Japan, Pharmexcil and IBEF have organized workshops with PMDA officials and experience India programme for better understandings of the regulations and market scenarios.

Since 2010 onwards, there is a gradual improvement of Indian exports to the Japanese markets. Exports to Japan are growing at 78 per cent with US$ 144 million during the year 2011-12.

Indian bulk drug exports to Japan have increased more than 50 per cent from US$ 58 million in 2010-11 to US$ 87 million in 2011-12. Similarly the exports of formulations have jumped from US$ nine million in 2010-11 to US$ 29 million with an increase of 216.6 per cent year on year (YoY).

Apart from bulk drugs and formulations, the herbal exports from India to Japan have also shown almost 100 per cent increase from US$ 14 million to US$ 28 million during the same period.

Presently Japan has more than 89 pharmaceutical manufacturers with approximately 9,000 employees in the country. Their annual pharmaceutical output is US$ 76 billion.

 During the past few years now, India is also slowly strengthening its legal or regulatory framework for IPR, which has received favourable responses from various countries across the globe. India’s economic policies and availability of huge talent pool for sustaining and growing operations are making India an attractive choice for global pharma companies for investment, tie-ups, mergers and acquisitions.

Japanese society is rapidly ageing as compared with other industrially advanced countries. Based on the statistics (2007) released by Statistics Bureau MIC, currently the population of 65 years old and above is 27,180,000. This figure is 21.3 per cent of the population and by 2040 it is projected to rise to 33.2 per cent meaning that for every three Japanese one of them will be a senior citizen. With this population pattern, the need for greater medical and nursing care services is expected. In the coming years, this need is expected to grow and this market is projected have a value of 75 trillion yen.

The Japanese pharmaceutical market is the world’s second largest next to the US, with annual sales of more than six trillion yen. But it is also pointed out that the sales accounted for generic drugs is just 10 per cent of this market value as opposed to other developed countries which is around 50 per cent. Thus it can be seen that generic drugs are not yet that popular in Japan as compared to its counterpart countries.

From 2005 to 2010, there is a gradual increase in the prescription drugs sales in Japan. From JPY 6358645.0 billion in 2005, the prescribed drugs sales have gone up to JPY 6702659.0 billion in the year 2010. On the other hand, the sales of OTC (Over-the-counter) drugs are slowly coming down. As projected by Business Monitor International (BMI) the prescription drug sales would continue to increase until 2010 and OTC drugs would experience a slight decrease in sales.

According to Japan Pharmaceutical Manufacturer’s Association (JPMA), the growth in pharmaceutical imports increased to 78 per cent from 432 billion Yen to 769 billion yen during 1994 to 2004. Moreover, the export from Japan rose from Yen 158 billion in 1994 to 383 billion yen in 2004.

In a span of 10 years, Japanese exports have increased by 142 per cent. During the past few years, the national and local government has shown strong effort in uplifting its health care and pharmaceutical sectors.

The Japanese Government is partnering with international companies to develop plans for R&D and to provide services in the field of medical devices for senior citizens. Some are even looking to build regional research centres aimed at bringing together advanced healthcare technologies.

The healthcare and welfare market in Japan is estimated at 75 trillion yen. In 2002 this market mostly consisted of medical care service and pharmaceuticals and health foods and this might still hold true for 2010 market.

In a span of three years, the number of nursing care facilities has increased 38 per cent from 2002 to 2005. A survey by Sawai, local generics Medicine Company, showed that 94.5 per cent of the respondents were willing to use generic medicine. It also showed that within next few years expenditure on generics would reach more around 1.2 trillion yen.

The strong mutual complementaries between India and Japan are driving the trade and potential sectors of trade and investment. The Confederation of Indian Industries (CII) report 2012 titled "India-Japan: A Growing Strategic Relationship" has predicted that the two countries would achieve a trade target of $25 billion by 2014.

The winning strategy Indian companies have adopted is to have an in-country experience first, partnering with a domestic company in order to build on established relationships and partners.

Last year in April, the Japan Research Institute (JRI) had signed a MoU with FICCI, for the promotion of exchange between Japan and India in the field of healthcare.

JRI believes that, for Japanese manufacturers of pharmaceuticals and medical equipment and healthcare-related companies with an interest in India, cooperation with the FICCI will not only facilitate access to information on India but, by promoting the conversion of local systems to Japanese specifications, will also have the benefits of promoting market participation and commercialization, and of strengthening Japan’s competitiveness.

Especially the last five years have witnessed many collaborative deals between bioscience organizations in India and Japan. The adoption of generic friendly policies by the Japanese government has fuelled considerable interest in the business and bilateral relations between the two nations, which is evident from the confidence that exudes from the various organizations based in the two countries.