Fuji spoils DRL’s Japanese dream

India’s second largest drug maker Dr Reddy’s Laboratories Ltd’s long-pending plan to enter Japan’s generic market — one of the biggest in the world — has suffered a serious setback as the Hyderabad-based pharma firm and Tokyo-based Fujifilm Corporation have agreed to terminate their agreement to form a joint venture to sell off-patent drugs in Japan.

The termination comes in the backdrop of Fujifilm’s decision to shift its focus from low-margin generics to highly profitable areas like new drugs in cancer field, more value-added super generics, and bio-related business.
The pacts signed by two firms in July 2011 was expected to open doors to Japan — the world’s second largest pharmaceutical market in the world — for Dr Reddy’s.  Despite a massive pharma market in Japan, estimated to be around $64.5 billion, the share of generics is still at a negligible 6.6 per cent.
However, reports suggest that Japan plans to increase the share of generics to 50 per cent to cut down on the expenditure.
Apart from this, major drug patent expiries in the coming years make the Japanese generic drugs market, attractive to foreign manufacturers looking for a large and relatively unta-pped market. The country was till recently closed for foreign players.
Meanwhile, Dr Reddy’s had also planned to open a local office in Tokyo or Osaka. Despite expressing his disappointment over the development, Dr Reddy’s chairman, G.V. Prasad, reiterated his firm’s desire to enter Japan.
“I want to reinforce our commitment towards a plan-ned entry into Japan to bring affordable and innovative drugs to more patients worldwide,” Mr Prasad said in a statement.
The first Indian generic company, which could enter the Japanese drug market, was Ranbaxy after it was acquired by Daiichi Sankyo. Later, Ahmedabad-based Zydus Cadila and Torrent Pharma and Mumbai-based Lupin had succeeded to foray into Japan.
DRL and Fujifilm have agreed to explore partnership opportunities in the development and manufacturing of active pharmaceutical ingredients (APIs) and contract research.