Driving on generics
The complex regulatory framework in Japan creates a high entry barrier and hence the likely route to gain presence is through partnerships with local generic companies or acquisitions of local companies. Using the same model, the Indian generic players such as Lupin, Ranbaxy and Cadila Healthcare have made inroads with the Japanese market.

The Japan-based Kyowa Pharmaceutical was acquired by Lupin in 2007, leading to the latter's access to the Japanese market. The company has made an investment of $63 million in the area of generics in Kyowa. Cadila Healthcare too has presence in the Japanese market since 2007 after it acquired Nippon Universal Pharma. The company is pinning big hopes on the Japanese generics market.

The country, which currently has a one percent share in Cadila's overall revenues, is all set to become a key market in the coming years. It already has around 20 products in the Japanese market including three recent launches.

One-of-the-major example of Japanese pharmaceutical companies entering India, is the acquisition of Ranbaxy Pharmaceuticals by Daiichi Sankyo in 2008 and the establishment of a R&D centre and facility by Eisai Pharmaceuticals. At the beginning of 2010, Eisai, the fourth largest Japanese pharmaceutical company, started operations in India; by setting up an API plant and knowledge center at an investment of $50 million.

Meanwhile, Ranbaxy is exploring opportunities of marketing its generic products through Daiichi's distribution network post its acquisition by the latter. Astellas, the second largest pharmaceutical company in Japan, too has opened its subsidiary and marketing operations in India four years back.
As against an estimated global 6-7 percent generic drugs market penetration in 2007, the Japanese government has implemented various measures to promote the use of generic drugs to achieve its goal of reaching 30 percent volume share for generic drugs by the end of march 2013. The market thus offers new growth avenue for Indian generic players.