Daiichi plots $560M generics push in Japan

Daiichi Sankyo joins the list of branded drugmakers looking to diversify into the generics business in Japan. The difference is that Japan is Daiichi's home market.

Like other drugmakers who've recently announced their intentions to build up their generics businesses in that country, Daiichi knows that demand for copycat meds is likely to grow enormously as the Japanese government turns to the knockoffs as a way to hold down healthcare costs. Japanese officials say they want generic drugs to account for nearly one-third of its overall drug market within three years, up from about 17 percent, Reuters notes. That's a lot of growth in a short period of time.

And like its rivals, Daiichi has some generics capacity to take advantage of: It bought a majority stake in India's Ranbaxy Laboratories in 2008. Now, Daiichi plans to set up a subsidiary in Japan to get into the domestic generics market, joining Teva Pharmaceutical Industries, which got into Japan via a joint venture earlier this year. Pfizer will come to the party soon, probably next year, the company has said.

The question is whether Daiichi, as a Japanese company, might be able to make more headway in that country than a Big Pharma from elsewhere, such as Pfizer. It's not expecting to: The company is targeting annual generics sales of $560 million, which is about what Teva aims to do. That's a bit more than 10 percent of the projected market for generics in 2011. But what do you think?

- read the Reuters story