Pharmaceutical giant Pfizer said today it may start selling generic drugs in Japan from 2011 as part of its efforts to diversify its operations.
Like other drugmakers, Pfizer is grappling with growing risks of a slump in earnings on patent expirations, coupled with rising regulatory and scientific bars for bringing next-generation drugs to the market.
Amid these challenges, Pfizer has merged with Wyeth, in a $68 billion deal that was approved by European Union antitrust authorities in July, and also launched generic drug businesses in the United States and Europe earlier this year, using its rights to generic drugs made by firms such as India's Aurobindo Pharma.
"Pfizer is considering entering the generic drug market in Japan as it seeks to diversify its business operations to build a stronger earnings structure," a spokesman at Pfizer's Japan unit said, but added that it will prioritise its patented drugs.
Pfizer said in May its license deals with Aurobindo and Claris Lifesciences would allow it to sell 60 generic products in more than 70 countries throughout Asia, Latin America, Africa and the Middle East and more than 100 products across North America, Europe, Australia and New Zealand.
The Japanese market for generic drugs is expected to total 515 billion yen (€3.8 billion) in the year to March 2010 and to expand to 705 billion yen in three years, according to Sawai Pharmaceutical, Japan's top generic drug maker.
Japan is promoting generics as part of its efforts to reduce healthcare costs but a plan by its new government to cut prices for branded drugs, which reduces the price advantage of generic drugs, may hinder the market's growth, Sawai's president Mitsuo Sawai said in a recent interview.
Shares of Sawai rose 0.6 per cent to 4,830 yen, while those of Towa Pharmaceutical, another major Japanese generic drug maker, gained 0.5 per cent to 3,930 yen. The Nikkei stock average shed 1.0 per cent.
Reuters