Japan's Mitsui buys stake in India top drug wholesaler Keimed

Japan's Mitsui & Co., a broad-based trading conglomerate, has bought a stake in Hyderabad-based Keimed, India's top drug and medical supplies wholesaler, entering a market that is rich in promise but fraught with regulatory hurdles.

The investment sees a 20% stake for $25 million, according to Nikkei Asian Review, from Apollo Hospitals Enterprise, part of the publicly-listed Apollo Hospitals Group, the country's largest hospital chain.

Japan has offered incentives for firms to promote healthcare exports and find low-cost solutions to a growing public healthcare bill as the population ages. The policies are part of efforts by the government of Prime Minister Shinzo Abe to lift the nation out of decades of deflation.

To that end, Mitsui will supply a broad range of drugs and medical devices from Japan and other advanced countries to India for Keimed to sell to medical institutions and pharmacies, Nikkei said.

In addition, the Japanese firm is expected to advise on distribution and logistics for Keimed, which supplies some 25,000 pharmacies and hospitals, Nikkei said, adding the market share is about 15-20% in five major cities, including New Delhi and Mumbai.

Outside of the main cities though, distribution has lagged, Nikkei said, and that will be a growth focus.

Japan's Institute for Health Economics and Policy forecasts India's pharma market to reach $20 billion by 2018, with demand for cutting-edge products from foreign companies in areas such as oncology, Nikkei said.

However, India's National Pharmaceutical Pricing Authority (NPPA) is busy on both the pharma and device fronts to bring down costs to consumers via price caps, though industry has challenged the effectiveness of such policies on access for the poor.

- here's the story from Nikkei Asian Review

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