The march of India’s top pharmaceutical companies around the globe has continued with Lupin Laboratories’ purchase of an 80% stake in Japan’s Kyowa Pharmaceutical Industry, a manufacturer of generic medicines and active ingredients.

Lupin is one of a number of Indian pharmaceutical companies that have been trying to get into the Japanese market for generics, which is still fairly small despite Japan being the second-largest pharmaceutical market in the world.

With the Japanese health system struggling to cope with a hefty drugs bill, the betting is that generics will grow quickly, with new legislation in 2006 allowing doctors to authorise the dispensing of a generic drug for the first time. The government has also introduced new regulations, to be implemented by 2011, designed to stimulate the local generic industry.

In April this year Zydus Cadila bought Nippon Universal Pharmaceutical, while at the end of 2005 Ranbaxy Laboratories set up joint venture, Nihon Pharmaceuticals, with Nippon Chemiphar. Dr Reddy’s Laboratories said earlier this year it was eyeing Japan, but had not yet decided on its entry strategy.

Lupin said that Kyowa ranks among the top 10 Japanese generic companies, with sales of 7.4 billion yen ($64 million) in the year ended March 2007, mainly from its cardiovascular, respiratory, anti-allergy and gastrointestinal product ranges. It intends to eventually acquire the remaining 20% of the Japanese company.

'Significant' move

Dr Desh Bandhu Gupta, Lupin’s chairman, said: “This is a very significant part of our strategy to tap leading global markets and establishes a beachhead in the second largest pharmaceutical market in the world.”

At present generics account for just 5% of the Japanese drug market, according to figures supplied by the Japanese Generic Pharmaceutical Manufacturers Association, compared to around 25% in Germany and the UK and 8% in the USA. Lupin will be hoping that market share rises quickly in the coming years.