Although the rate of increase in market penetration for generic drugs has slowed since the Ministry of Health, Labour and Welfare’s target of 80% (market share on a volume basis) was reached, proactive measures to promote the use of generic drugs are continuing, and we expect the market to keep on growing to some degree.
In addition, the issue of unstable supplies of generic drugs stemming from quality issues at some companies is continuing, and stable product supplies remain an issue.
To achieve unbroken growth against this backdrop, Kyorin’s generic drugs business is working to maintain its advanced capabilities to develop new generic products, while building a reliability assurance system with the strict quality control used for ethical drugs and increasing our product supply capacity for stable supplies of ethical drugs.
Changing environment(internal and external)
- Government measures to curb medical and drug costs in response to tight healthcare finances
- Growing demand for pharmaceutical companies to ensure reliability
Opportunities
- Increased demand for generic drugs due to promotion of measures to contain drug costs
- Patent expiries of major original drugs
- Increasing demand for high-quality products
Risks
- Reduced incentives to promote use of generic drugs
- Weaker profitability due to annual drug price revisions
- Soaring prices of raw materials and energy
Medium-term business plan
Vision 110 –Stage1– initiatives
Business strategyAchieving sustainable growth of the generic drugs business
- Maintain strong capability to develop new generic products and leverage such products to accelerate growth
- Strengthen production and procurement systems, including those outside the Group, to ensure stable supplies
- Build a low-cost structure resilient to changing business conditions
Initiatives under the medium-term business plan
Maintain and strengthen our capability to create new generics and accelerate growth
To provide generic drugs that can be used safely, KYORIN Rimedio manufactures pharmaceuticals and provides packaging from the perspectives of medical practitioners and patients, ensuring that products are easy to use in medical institutions and meet the needs of patients taking drugs.
To address changing business conditions, we will enhance our in-house development capabilities by strengthening our expertise, human resources, and organizational functions to take on challenges in new fields including highly pharmacologically active drugs, anticancer drugs, and formulations in niche areas in addition to small molecule compounds, with the aim of establishing a presence as a strong generic drugs company.
In fiscal 2023, we launched eight new products with three ingredients.
Takaoka Pharmaceutical Technology Innovation Center
We believe that maintaining and strengthening our high level of in-house development capabilities for new generic products are essential for the continuous growth of our generic drugs business. The Takaoka Pharmaceutical Technology Innovation Center, established in July 2017 to increase the number of new generic products, has all the functions needed to obtain patent application data, from patent searches and planning strategies for development items to evaluations of pharmaceutical ingredients, formulation design and quality evaluation, as well as functions to conduct clinical trials and measure drug concentrations.
To further improve the quality of these capabilities and accelerate drug development, we promote open innovation including the proactive use of Toyama Prefecture’s industry-academia-government collaboration system. We are also working to strengthen our organizational functions through restructuring including assigning researchers with different specialties to the same department and invigorating communication among researchers.
Strengthen production and procurement systems to ensure stable supplies
Increased shortfalls in product supplies stemming from quality problems at some companies have yet to be resolved, and the entire Group is working to maximize production volumes. With the early commencement of full-scale operations at the Takaoka Plant in April 2024, we are striving to increase our product supply capacity.
Establish a low-cost structure resilient to changing business conditions
KYORIN Rimedio has developed strong sales through multifaceted, well-balanced sales channels. Leveraging this advantage going forward, we will work to increase our sales strength and cost competitiveness by making the sales structure more efficient.
Address authorized generics
The Kyorin Group has achieved a certain degree of market recognition for selling both original drugs and authorized generics that meet the diverse needs of medical practitioners and patients. We also believe that handling authorized generics will lead to the maximization of product value.
We currently sell Montelukast Tablets “KM” (our authorized generic version of Kipres), Mometasone Nasal 50μg “KYORIN” (our authorized generic version of Nasonex), and Imidafenacin Tablets “KYORIN” OD tablets 0.1mg (our authorized generic version of Uritos). All three products have gained a share of 50% or higher in their respective generic markets.