Lupin Pharmaceuticals to strengthen presence in Japanese market

Pharma company Lupin is looking at strengthening its presence in the Japanese market, which is offering great promise to generic drug makers.

Vinita Gupta, group president and CEO, Lupin Pharmaceuticals Inc, said the firm will look to continue growing at over 14% annually in that market.

“We are expanding our product portfolio for Japan and the government there is also giving incentives to promote generics usage. All this will boost our presence,” said Gupta.

Lupin’s Japanese subsidiary, Kyowa, which it acquired in 2007 for around $60 million, is strong on central nervous system drugs, and Gupta said therapeutic categories such as cardio vascular, anti-infectives and gastro-intestinal will be the focus areas in future.

Kyowa currently has a turnover of $130 million, about 15% of the firm’s global revenues.

The Japanese government has been actively promoting use of generic drugs to reduce costs and has set a target of achieving a 30% market share by volume for generic drugs by next year, up from 18.7% in 2007. This, the government believes, could save up to $5 billion from 2007-12.

At present, the share of generic drugs in value terms is very low in Japan.

According to various global estimates, the Japanese drug market was valued at $96 billion in 2010, second only to the US. But the penetration of generic is a meagre 23%, compared to about 50% in the US.

To promote generics, the government there has printed posters, hosted public seminars, and posted videos online explaining the benefits of generics. The national health insurance agency in Japan has also issued cards with a mention of generic drugs so that patients can avail them without having to challenge the authority of doctors.

“The government incentives mean that we have come into this market at the right time and will leverage the opportunity,” said Gupta.

Another key factor which will help in the growth of the Japanese market is the number of senior citizens over the age of 75 years who consume roughly 28% of the drugs in Japan. Estimates suggest people of 75 years of age and older would number 23 million by 2030.

Adithya Bhat, MD, Protiviti Consulting, said ageing population is a key growth driver; however, the overall population there is limited when compared to African countries. “The strict regulatory guidelines could be a challenging factor for the Indian companies looking at that market.”

The company is also looking at enhancing its product basket in the US, where it aims at launching 60 products in the next few years, said Gupta.

It currently has 36 products in the US.

“We will look at product launches in difficult categories such as oral contraceptives, ophthalmics and dermatology, where the competition is limited, thereby giving us a better share,” said Gupta.

Meanwhile, Lupin on Wednesday posted a 24.13% rise in consolidated net profit at Rs266.9 crore for the second quarter ended September 30 as against Rs215 crore in the same period of the previous fiscal.  Net sales grew by 24% to Rs1,742 crore during the second quarter from Rs1,409 crore in the same period last fiscal.

On a standalone basis, the company posted a net profit of Rs268 crore as compared to Rs162.40 crore in the same period last fiscal.