Mr Amit Chander, partner, Baring Private Equity
(Courtesy: The Economic Times)
Sun Pharmaceutical Industries, which is in the process of acquiring control of Ranbaxy Laboratories from Daiichi Sankyo, will soon put its purchase to work through the exclusive marketing opportunity offered by two drugs in the US, rationalizing research and other costs and eventually using its association with the seller to crack the Japanese market.
The $4-billion deal, announced in April, is currently awaiting various regulatory clearances. Spokespersons at Sun Pharma and Ranbaxy declined to comment.
Japan, the world's largest drug market after the US and Europe, has proved tough for Indian players to succeed in. The penetration of generic drugs is less than 25 percent compared to more than 80 percent in the US drug market. But the Japanese government's intent to raise this share to 60 percent by 2017 has prompted analysts to dub it as the next big frontier for Indian drug makers.
"In Japan, Indian players cannot simply succeed by replicating the strategies that have paid off in the US - of launching at the lowest price, garnering high market share and playing a volumes game," said Mr Amit Chander, partner at Baring Private Equity.
"That is because Japan is an acutely brand-conscious market, where the dominant perception is that high quality and low prices do not go together," said Mr Chander, who heads the pharma and healthcare vertical at the private equity fund.