Teva Pharmaceutical Industries, the world’s largest generic drug producer, and Takeda Pharmaceutical, Japan’s largest pharmaceutical company, are forming a joint venture to market generics in Japan.
The venture, to be finalized in the second quarter of 2016, will combine products from both firms to serve what they call one of the fastest-growing generics markets in the world. Consumers in Japan have been slow to embrace the off-patent drugs, but the Japanese government has an objective of reaching 80% generics penetration—in line with the U.S. and Europe—by the end of its 2020 fiscal year.
Even prior to the agreement Teva had been increasing its presence in Japan, the world’s third-largest drug market after the U.S. and China, according to the market research firm IMS Health. In 2011, the Israeli company became Japan’s number three generic drug firm when it paid more than $900 million for Taiyo Pharmaceutical. Last year, Teva expanded one of its manufacturing facilities in Japan.
Meanwhile, Takeda is dealing with a home market where the government is aiming to reduce drug expenses under the state insurance program. In recent years, the government of Prime Minister Shinzo Abe has been pushing doctors to prescribe generics instead of brand-name drugs.
“This is a win for Japanese patients,” says Ichiro Masuda, principal and head of Japanese operations for Deallus Consulting, a consulting firm focused on the life sciences market. “The Abe government has developed many policies to enable cheaper access to products with expired patents. The establishment of this joint venture will provide a new supplier of high-quality generics into Japan.”