Drug cos expect better access to Japanese market .

Their optimism is pinned on a comprehensive economic agreement getting ironed-out between India and Japan.

Negotiations started between the two countries in January 2007, but took a back-seat due to the Indian elections, a Government official said.

But with the Union Cabinet being finalised, negotiations are expected to commence and be taken to a conclusion, he said.

At an estimated $60 billion, Japan’s medicine market is about 11 per cent of the world’s pharmaceutical market.

Generic opportunity

Looking to rationalise healthcare costs, Japan is encouraging generic drug-makers, an opportunity for Indian drug-makers. Doctors and healthcare institutions are being incentivised by authorities to prescribe generic medicines, a pharma industry representative said.

The proposed agreement will help technology transfer, besides smoothening access to the Japanese generics market, he added.

Entry barriers

But some procedures in the Japanese market have been acting as entry barriers, observe pharma company representatives. To sell medicines in Japan, companies need to do bio-equivalence tests in Japan, and that increases the cost, says Indoco Remedies’ Director Finance, Mr Sundeep Bumbolkar.

A bio-equivalence test establishes that a generic medicine is chemically similar and as safe as the original drug.

To sell in the US or Europe, a bio-equivalence test can be done in India, he added.

Also, every sample is tested three times and there is 100 per cent inspection of all products exported to Japan.

Ranbaxy, now majority-owned by Daiichi Sankyo, is ideally placed to tap the generics opportunity in the Japanese market, thanks to its hybrid business model, said Chief Executive and Managing Director, Mr Atul Sobti.

Lupin’s spokesperson said that processes were already getting streamlined.

Product filings, earlier done once a year, can now be done twice a year, he said. Lupin earns 12 per cent of its revenue from this market.