Pfizer may join Japanese generics market in 2011

A company spokesman told Reuters​ that joining the Japanese generics market would build a “stronger earnings structure​” which, for a firm set to lose patent protection for a number of key drugs in the next few years, is clearly a priority.

The plan, discussed last week, would be in step with Pfizer’s recent efforts to grow its non-branded drug business that has already seen it sign licensing deals with Indian generics firms Claris Lifesciences and Aurobindo Pharma this year.

The move would also fit with Big Pharma’s increasing focus on generics that, this year alone, has seen Sanofi Aventis acquire Laboratorios Kendrick and Medley, GlaxoSmithKline (GSK) buy shares in Aspen Pharmacare and Novartis purchase Ebewe Pharma’s non-branded injectables unit.

Market potential​

However, while Big Pharma’s efforts have been focused on emerging markets in which observers expect the sale of generics to grow as a result of their lower cost compared with branded versions, opinion is divided on the potential of generics in Japan.

On the one hand, since 2002 Japan’s Ministry of Health, Labor and Welfare (MHLW) has been trying to increase the use of non-branded drugs to cut public health spending by advocating more generic substitutions by prescribing physicians.

Despite these efforts, at present, generics represent only around 7 per cent of the country’s $64.5bn a year prescription drugs market with the perception being that non-branded drugs are regarded as inferior by patients.

Additionally a 2007 Central and Social Insurance Medical Council (CSIMC) survey revealed that, while around 60 per cent of physicians had prescribed generic substitutions, more than 90 per cent had been requested by patients, suggesting that there is also reluctance to use non-branded drugs among medical professionals.

On the other hand, a recent report by Thomson Pharma​ and Newport Premium​ revealed that 14 blockbuster drugs will lose patent protection in Japan by 2012, including products made by GSK, AstraZeneca, Novartis and Eli Lilly.

The authors argue that this, coupled with likely support for greater generic use from the incoming Democratic Party government and the low capacity of the country’s existing generics producers will see more international players enter the market which, they suggest, will help drive the market.