Pfizer and Mylan are to establish a long-term strategic collaboration to develop and market generic drugs in Japan.

The collaboration will include a portfolio of more than 350 marketed products across a broad range of therapeutic categories, as well as more than 125 additional products in development. The partners said that products are expected to be sold "under the strong Pfizer brand with joint labelling".

Under the agreement, Pfizer and Mylan will each continue to operate independent entities in Japan, but work together on current and future generics, sharing the costs and profits. Financial terms of the pact have not been disclosed.

Japan is the sixth largest generics market worldwide, with sales of $5.20 billion in 2011, and Pfizer and Mylan say it offers attractive growth prospects due to its aging population, "numerous impending drug patent expiries and a broad array of government initiatives aimed at reducing health care expenditures". The Japanese government is looking to up the use of generics from 24% to 30% by the end of 2012.

Albert Bourla, head of Pfizer's established products unit, said the collaboration "will enable both companies to effectively build upon each other's core capabilities". Mylan chief executive Heather Bresch said the pact will "enhance the contribution of Japan to our overall business in the near- and long-term".