India's Lupin has made a second foray into Japan, striking a deal to buy the Tokyo-based injectables maker I'Rom Pharmaceutical. The buyout follows Lupin's acquisition of Kyowa Pharmaceuticals, which it snapped up in 2007 to gain access to the Japanese generics market. The sale terms weren't disclosed, but I'Rom reported sales of ¥5.36 billion for its last fiscal year, or about $69 million.
Foreign drugmakers are eyeing Japan, which has a low generics utilization rate--just about 23% of prescription drug sales. The government is aiming to push it to at least 30% by 2012. Kyowa makes copycat pills, so I'Rom's injectable products will broaden Lupin's Japanese portfolio significantly.
The deal will also boost Lupin's presence in a subset of the Japanese hospital market: Specifically, the 35% of hospitals that use a flat-fee payment system. Generic drug use is expected to grow significantly at those hospitals, which are looking for ways to reduce costs, Dow Jones reports. Lupin Managing Director Kamal Sharma said the I'Rom buyout would triple its field force targeting those facilities.