Chugai Pharmaceutical Co., a Japanese subsidiary of Roche Holding AG, is considering producing the Tamiflu anti-influenza drug in Japan at the request of the Health, Labour and Welfare Ministry, according to industry sources.

Domestic production will contribute to stable supply of the drug amid a possible flu pandemic in Japan, which now depends fully on Chugai's imports from its Swiss partner Roche for Tamiflu supply, they said.

The Japanese government announced a plan last November to increase Tamiflu stockpiles by 70 per cent to cover 25 million people in preparation for a possible outbreak of new flu viruses originating from avian flu viruses.

The full dependence on imports has been a matter of concern to the Japanese government since demand for Tamiflu has been growing worldwide.

Tamiflu, the most popular anti-flu drug in the world, is expected to be effective against even new flu viruses.

Japan is the world's largest Tamiflu consumer, accounting for 70 per cent of global Tamiflu sales. In 2005, Tamiflu sales in Japan quadrupled.