Foreign drug companies eye lucrative market in Japan

Seeing a lack of competition and a chance to boost sales, major foreign pharmaceutical companies are stepping up efforts to develop drugs for rare diseases and setting up dedicated divisions in Japan.

That's because domestic makers are lagging behind in drugs aimed at treating rare diseases.

“A foreign mega-pharma with dozens of billions of dollars in sales can spend money to develop drugs for rare diseases,” said a top official of a major Japanese pharmaceutical company. “But it’s difficult for a relatively small domestic company to make bold investments in drugs that never guarantee revenues.”

The foreign pharmaceutical companies are attempting to create new markets as their patents of blockbuster drugs for large numbers of patients are expiring.

Novartis Pharma K.K., a Japanese unit of Swiss-based Novartis International AG, released a drug for treating cryopyrin-associated periodic syndrome (CAPS) in December for the first time in Japan.

Infants can develop the disease, which causes repeated fevers and headaches. Novartis International has sold the drug in more than 20 countries. The Japanese unit introduced it with high expectations, a company official said.

One in 1 million people are said to be afflicted with CAPS, with fewer than 30 patients believed to be in Japan. Despite the lack of sufferers, Novartis is placing an emphasis on the drug in the expectations it can be used by a wider scope of patients in the future because of its confirmed effect of reducing the recurring risk of heart attacks.

Novartis has already put an anti-cancer drug called Glivec into the Japanese market. This year, the drug gained health ministry approval to be used for two types of blood cancer other than initially intended diseases.

Major domestic and foreign pharmaceutical companies have been seeing growing sales for drugs that are used by many patients, such as those suffering from high blood pressure or diabetes. But revenue prospects have dimmed, as the patents of many of such drugs have expired over the past several years.

A maker of a drug for treating a rare disease can dominate the market, with few competitors expected to emerge, allowing the firm to put a relatively high price tag on the drug. That is the lure for foreign pharmaceutical companies.

“Companies can expect dozens to even hundreds of times more money to be paid, compared with for diabetes drugs,” an industry source said.

U.K.-based pharmaceutical giant GlaxoSmithKline plc set up a rare diseases medicine development center in Japan in April 2010. GSK Japan has since marketed 11 products, including anti-HIV drugs.

Pfizer Japan Inc., a subsidiary of the U.S.-based corporation, established a Rare Disease Division on March 1, with more than 100 medical representatives. Pfizer is aiming to become a global leader in the area of drugs for the treatment of rare diseases, an official said.