Article preview from "PharmAsia News" - September 24, 2008
Find out why Japanese drug maker Kowa said Sept. 24 that it had signed a definitive agreement with Israel generic manufacturer Teva Pharmaceutical to share a 50-50 stake in a generic manufacturer in Japan to take advantage of a growing Japanese generics market.
Article preview from "PharmAsia News" - September 24, 2008
Kowa and Teva Partner For 50-50 Stake In Japanese Generic Firm
TOKYO - Japanese drug maker Kowa said Sept. 24 that it had signed a definitive agreement with Israel generic manufacturer Teva Pharmaceutical to share a 50-50 stake in a generic manufacturer in Japan to take advantage of a growing Japanese generics market.
The new company, Teva-Kowa Pharma would become "a leading generic pharmaceutical company in Japan," the two companies said in a joint press statement.
Kowa told PharmAsia News the joint venture would leverage the two companies' marketing, research and development, manufacturing and distribution functions to become "a broad-based supplier of high-quality generic pharmaceutical products for the Japanese market."
It would commence operations in 2009 and aim for $1 billion in sales in 2015, she said.
Teva CEO Shlomo Yanai said the joint venture will enable the two companies to combine Kowa's knowledge and reputation in Japan with Teva's expertise in generics in a market that is expected to double in volume in the next five years.
"This strategic partnership is an important milestone in executing Teva's five-year strategic plan," Yanai said.
In fact, with more than one-fourth of its 127 million population set to become 65 years and older around 2020, the Japanese government is dead-set to control surging healthcare cost that it provides through the for-all insurance program, the National Health Insurance (PharmAsia News, Sept. 11, 2008).
To stem rising costs, the Ministry of Health, Labor and Welfare now is instructing medical practitioners and pharmacists to prioritize dispensing generics instead of brand drugs to raise to 30 percent the ratio of generics in total prescription drug NHI sales by 2012 (PharmAsia News, March 27, 2008).
Kowa CEO Yoshihiro Miwa said the agreement is meant to meet the needs of medical institutions and patients for high quality and cost-effective generic pharmaceuticals. He also said it enables Kowa to diversity business operations in the prescription, over-the-counter and generic drug market.
More and more firms are hoping to gain access to Japan's growing generics market. Daiichi Sankyo expects to increase its presence in generics with its acquisition of a majority stake in Ranbaxy (PharmAsia News, June 11, 2008). Last year, Indian generics firm Lupin bought a majority stake in Japanese generic manufacturer Kyowa Pharmaceutical (PharmAsia News, Oct. 12, 2007).
In Japan, Kowa is best known for its OTC multivitamin QP Kowa. It also markets cholesterol drug Livalo (pitavastatin) and hypertension treatment Olmetec (olmesartan). However, it does not currently offer any popular generics.
Asked why Kowa chose Teva as its generics partner, Kowa spokesman Motoyoshi Yamada told PharmAsia News, "Teva has plenty of quality generic drugs and this jives perfectly well with our long-term business model to widen our generics business."
He said Kowa would bring into the Japanese market what Teva already has. The new joint venture, backed by the two companies, will develop products that suit the Japanese market and handle generics of third parties.
"No generic maker in Japan has any sizable market share," Yamada said. "We hope to capture the 10 percent share and become the first number one generic maker."
- Toshio Aritake
Companies mentioned in this article:
Teva Pharmaceutical
National Health Insurance
Kowa
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