These days, Big Pharma loves Japan. And Big Pharma has a crush on branded generics. So what's not to like about branded generics in Japan? Pfizer ($PFE) and Mylan ($MYL), for two, are expressing their affection with a deal to make and sell 350 off-patent drugs there.
The companies are hoping Pfizer's brand strength and Mylan's manufacturing-and-distribution resources will translate into Japanese market share. Pfizer will handle marketing and sales of those 350 drugs, some from Pfizer's stable and others from Mylan's. Meanwhile, Mylan will focus on operations, including R&D and manufacturing.
Already the second-largest pharma market and sixth-largest generics market on the globe, Japan has become increasingly attractive to multinational drugmakers as U.S. sales stagnate and European price cuts actually undermine growth there. Plus, the market for generics in Japan is growing, as an increasingly cost-conscious government works to ratchet up use of cheaper copycats. Growing share of a growing market? Lots of love for that concept, too.
"We are pleased with the opportunity to collaborate with Mylan to meet the ever-growing demand for high-quality generics in Japan," Pfizer's established-products chief, Albert Bourla, said in a statement. "[W]e believe the collaboration will result in a powerful generics platform that ... will be a leader in Japan in terms of scale, scope and quality."
Pfizer has been scaling down to focus more on its prescription drugs business, shedding assets such as its Capsugel unit and, more recently, its baby-formula operations. It's in the process of spinning off its animal health unit, Zoetis. Analysts had speculated that Pfizer might sell off its Established Products unit, too, but this new deal with Mylan--together with other recent investments--underscore the generics business' importance to Pfizer's strategy going forward.
- read the joint press release