Top ten pharmaceutical companies in Japan are domestic companies except Pfizer. The leading Japanese companies are Takeda, Astellas, Diachi Sankyo, Taube, Mitsubishi, Chogas, Otsuka and Eisai. Total market value of pharmaceutical products in 2007 was around $58.28 billion with a growth rate of 9% in YOY (year on year) basis. Otsuka is growing faster than all ten companies at 11.2%. A few other companies have also grown much faster in 2007-2008 even by 76% and 96.4%.
All of us know that besides US, Germany, Japan and many other countries are looking at containing healthcare costs due to pressure on healthcare budgets. In order to contain pressures on healthcare cost, Italy, Spain, Belgium and other countries are slowly shifting to generics. Japan is also moving in the same direction.
Recent initiatives in Japan:
■ Japan is taking initiatives in generic market. Fuji Keizai compiled the 2008 generic pharmaceutical data book. According to this new book, market of generics in Japan will expand to Yen 359.17 billion in 2010 accounting for 5.2% of total market for ethical drugs. It predicts substantial increase in the market for anti-hypertensive's, schizophrenia and diabetics as many block busters in these therapeutic categories will go off patent. Data book also attributes the high growth rate for generics to continue increases in the consumption of generics at DPC (Diagnosis procedure combination), as also no hospitals in the lifestyle related diseases. It has been increasing since the new prescription form was introduced in 2008.
■ Education to Doctors for Generics:
Korosho will begin seminars for physicians as part of its efforts to promote use of generics with the co-operation of JSGM (Japan Society of Generic Medicines). The main objective of this project is to eliminate physicians', concerns and mistrust about generics. In the revision of medical fees in April 2008, Korosho took one of the major initiative which prevents promotion of generics. Series of measures were initiated to promote use of generics and increase their market share to at least 30% on the volume basis by 2012. In financial year 2009 seminars on focusing on physicians from DPC hospitals are also planned.
■ Co-promotion and New Entities :
Co-promotion and creation of new entities for specialists is also happening very actively in Japan. GSK and Nippon Kayaku started co-promotion on the new anti cancer agent Tykerb tablet 250 mg on April 22, 2009. Similarly, GSK and Pfizer incorporated have announced that they will create new world leading specialist HIV company in the fourth quarter of 2009.
SCOPE of Indian Companies:
Having understood these initiatives, let us examine the prospects of Indian companies. It is proven that Daiichi Sankyo's acquisition of Ranbaxy for exploring and capturing Generics markets will pay rich dividends for Daiichi Sankyo as market for generics open up in Japan itself. It is an opportunity for Indian companies also to enter Japan market.
Let us examine the routes which are more common in Japan on the basis of our experience of Japan. There is a possibility of a good Indian company to go to Japan for generics either through acquisition route, JV route or direct route. To become successful in Japan, you definitely need a guidance as systems and other regulatory, Healthcare systems and marketing operations are different.
Status of Indian companies in Japan:
Among the Indian companies which have made significant in roads are: Nihonyakuin - Ranbaxy, Kyowa-Yakuhin - Lupin, Nihon Universal - Zydus and Torrent Pharma.
Oldest among them is Nihonyakuin - Ranbaxy, which is present since 2005 while Kyowa-Yakuhin Lupin and Nihon Universal - Zydus are present there from 2007. Nihonyakuin - Ranbaxy has 61 products approved with Yen 2.9 billion sales with 15 medical representatives - while Kyowa-Yakuhin - Lupin has been scoring high although it has low volume of sales. It has 250 products approved and Yen 0.95 million sales and 60 medical representatives. In comparison, Nihon Universal - Zydus has 49 products approved with Yen 0.2335 billion sales and 30 medical representatives. Torrent has not made any significant dent so far in Japanese market as per the data available.
Movement of market:
Demographics: A key feature of Japan is that the population of Japan is declining from 127.77 million in 2005 to 115.22 in 2030. It is likely be at 89.33 million in 2055. This demographics indicate changes in the disease pattern in Japan over some years. Japan projects this pattern of population decline and it substantiates the Age related pattern of health for the population. Blood and body fluids, CV, CNS, GI. are few examples of this pattern.
Market: Total Pharma market is estimated at around $60 billion as on 2008 and it is organically growing at around 4 to 4.5% year on year. Biannually there is a price cut resulting in dollar growth fluctuations. Total prescription market is well spread over a few therapeutic areas. Major therapeutic groups which contribute are CV contributing to around 21% of the market while it is declining at 2.1%. Next major group is other metabolic products including diabetes contributing 9.6% of market share. CNS, GI blood and blood fluids, skin, follow the order of priority. Highest growth is seen in biological at 9.1%. It has already captured 4.2% of market share. In low risk areas allergy and vitamins follow the biological in order.
How to Enter: After analyzing the demographic patterns, disease pattern, recent initiatives, a few more Indian pharma companies have great opportunity to enter Japan. But they need specific strategies, funding and understanding of the market, regulatory and healthcare systems.
The authors Dr .RB Smarta, MD, Interlink, Mumbai, India & Jeffrey Schnack , 3Rock KK, Tokyo, Japan - A Strategic Partner)