Opportunities in Japan’s API market

Ames Gross shares his insights into the opportunities in Japan's API market in his latest article.

Asia's active pharmaceutical ingredient (API) market is growing at a rapid pace. From 2008 to 2012, it grew from 24 to 28 percent of the global API market. From now until 2018, it is expected to expand at an annual rate of 8 percent. This will put Asia's API market – currently worth $32 billion – at almost $55 billion by 2018.

Japan has led Asia in API demand. In 2012, Japan's market for APIs was the largest in Asia, with a value of $16 billion. Foreign API firms from the US and Europe are actively selling their APIs to the Japanese market.

Japan has a high share of innovator APIs, and demand is picking up in the biotech drug sector. However, API generics are also gaining ground in Japan. As Chinese and Indian firms flood the Japanese market with cheaper API alternatives, price competition has made it difficult for Japanese API manufacturers to do business in their own market.

Product registration

To register an API with Japan's Pharmaceuticals and Medical Devices Agency (PMDA), manufacturers must apply through the country's Drug Master File (DMF) system.

Japan's DMF system is similar to that in the US. The Japanese DMF system allows API manufacturers to register their products directly with the PMDA. Thus, when multiple drug manufacturers in Japan want to use the same API for their finished drug products, the API manufacturer does not need to turn over sensitive information in support of the finished drug registration. Instead, the PMDA uses the information from the API DMF to approve finished drug applications.

DMF registration is voluntary in Japan. Items that may be registered include APIs and new excipients (excipients with different composition ratios from existing products). Drug substances, intermediates, and pharmaceutical product materials in OTC drugs should not be registered, according to the PMDA.

The API or excipient manufacturer is responsible for DMF registration in Japan. If the manufacturer does not have their own office in Japan, they must appoint an In-Country Caretaker (ICC) to apply on their behalf. The ICC is responsible for filling out the DMF application and answering all PMDA inquiries, both during and after registration.

All registration materials must be submitted in Japanese and should include:

• The name of the drug substance

• The name of the manufacturing site

• Information about drug ingredients

• Manufacturing method

• Manufacturing process control

• Quality control tests

• Specifications and test methods

• Stability tests

• Storage methods

• Expiration dates

• Non-clinical studies (for new excipients)

• Safety information

• The manufacturing license number and category

• The name and address of the ICC

DMF registration is free, and there are no government fees. The PMDA recommends that DMF applicants submit all materials before the finished drug manufacturers submit their own drug registration applications.

"...the finished drug manufacturer in Japan is also required to submit a partial change approval application or a partial change notification to the PMDA."

Finished drug manufacturers are required to cite all relevant DMFs in their drug registration applications. They may attach copies of the DMF registration certificate to their drug registration applications, if they so choose. During the PMDA review of the finished drug product, inquiries regarding DMF products are directed to the DMF license holder or the ICC.

If changes are made to DMF products, either an application for change in registration or a minor change notification should be submitted by the ICC to the PMDA. The API manufacturer should also discuss any changes in their production processes, sterilization processes, etc. with the finished drug manufacturer (i.e. the drug approval holder). In these situations, the finished drug manufacturer in Japan is also required to submit a partial change approval application or a partial change notification to the PMDA.

If the API manufacturers or their ICCs have any questions about the registration process, the PMDA provides an option for a "simple consultation" on matters relating to DMF registration.

Foreign companies in japan

More and more foreign pharmaceutical companies are selling their APIs on the Japanese market, either to domestic Japanese drug manufacturers or to foreign drug companies making products in Japan.

"More and more foreign pharmaceutical companies are selling their APIs on the Japanese market"

In April 2013, India-based Dishman Pharmaceuticals and Chemicals said they were on track to post a 500 percent growth in revenue for APIs sold in Japan through 2013. Revenue in 2012 was around $2 million, and revenue for 2013 is expected to reach $10 million. Dishman Pharmaceuticals currently supplies APIs to 11 companies in Japan.

In February 2012, Pfizer Japan announced the launch of two APIs in Japan. One was for the diabetes treatment glimepiride (Amaryl) and one was for the antiarrhythmic agent pilsicainide (Sunrythum). Including these two items, Pfizer Japan launched a total of 18 APIs in Japan in 2012.

Conclusion

Foreign API manufacturers have good sales opportunities in Japan. Products with the best prospects include innovative and generic APIs.

About the author:

Ames Gross is president and founder of Pacific Bridge Medical, a Bethesda, Md.-based consulting firm that helps medical companies doing business in the Asian market (www.pacificbridgemedical.com). A recognized national and international leader in the Asian medical markets, he founded Pacific Bridge Medical in 1988, which has helped hundreds of medical companies with business development and regulatory issues in Asia.

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