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Wellness Stories

Bridging the Gap: Going Overseas to Ensure a Stable Supply of Generic Drugs in Japan

July, 2023
a photo of Tadashi Mukaide, Head of Corporate Sales Unit, Me Pharma
Tadashi Mukaide

General Manager, Corporate Sales Unit,
Me Pharma Co., Ltd.

a photo of Masaaki Nakahashi, Executive Vice President, Quality, Medreich
Masaaki Nakahashi

Executive Vice President, Quality,
Medreich Limited

What if the prescription you rely on is suddenly unavailable at your local pharmacy one day or so expensive that you no longer can afford it? Currently, about 80% of the prescribed drugs available at pharmacies in Japan are generic drugs. At all times being cheap, having same effect & readily available, Generics now with these three advantages are not only appealing for their lower prices but also offer the same efficacy of the related brand-name product. In addition to reducing the cost burden of prescriptions on patients, they also help mitigate the problem of rising medical costs in Japanese society as a whole. But their availability may soon be limited. The generic drug industry is facing multiple challenges: National Health Insurance price revisions, soaring bulk drug prices, quality issues, and supply chain concerns.

Against this backdrop, the Meiji Group has embarked on a new mission. Three companies-Me (pronounced em-ee) Pharma, Medreich, and Meiji Seika Pharma-will collaborate to establish a sustainable business model for generic drugs.

Creating a profitable plan for long-term generic drug production

"The stable supply of pharmaceuticals is an urgent issue. Distribution concerns appear in the trade journals every day." Tadashi Mukaide, head of the Corporate Sales Unit at Me Pharma, says. Me Pharma, established in 2016 as a generic drug sales company wholly owned by Meiji Seika Pharma, provides a stable supply of inexpensive, high-quality, generic drugs to major dispensing pharmacies in Japan.

The company sells 31 ingredients-considerably fewer than major generic manufacturers, which typically produce much more. However, by focusing on a small number of products in-house, the company is able to stabilize distribution and keep costs low at the same time. "We are positioning ourselves", says Mukaide, "to be extremely sensitive to fluctuations in the market and be able to make adjustments." Me Pharma's high ratio of in-house production allows the company to be flexible and responsive, such as quickly increasing the production of certain drugs to meet heightened market demand. And this is made possible by Medreich, the Indian pharmaceutical manufacturer, a subsidiary of Meiji Seika Pharma.

a photo of Mukaide

Mukaide is driven by its mission to first establish the company as a viable business.

We are creating a unique business model in cooperation with Medreich that provides a stable supply of widely-used generic medications at fair prices and also generates a solid profit to ensure its sustainability.

Building a Profitable Business Model

Medreich has five plants in India with an annual production capacity of more than 11.5 billion tablets, which includes contract manufacturing for major overseas pharmaceutical manufacturers. This sizable production capacity has helped generate profits with a proven track record for many years since Medreich's establishment in 1973. The company joined the Meiji Group in 2015 and Plant called Unit 7 manufactures generic drugs for the Japanese market.

a photo of Nakahashi

Masaaki Nakahashi, Executive Vice President, Quality for Medreich, who is on temporary transfer from Meiji Seika Pharma, says, "We try to complete the procurement of raw materials in India as much as possible at Medreich. However, most of the raw materials for products destined for Japan are still procured from Japan. We plan to gradually switch to local procurement to further reduce costs, thereby ensuring the affordability of our products while also boosting profit margins."

Our commitment to quality

Medreich products have long been associated with quality. Because the company sells products worldwide, it strives to ensure and improve quality by reflecting regulations of each individual country and then applies the knowledge gained from these guidelines to its high standards.

a photo of quality assurance employees

At Medreich, we have always put our customers and quality first. Everyone here works hard with a sense of professionalism and urgency.

a photo of Joju Joseph

Joju Joseph
Vice President, Technical, Medreich Limited

Joju Joseph of Medreich, who has overseen the company's operations since beginning the collaboration with Meiji Group, says, "Japanese standards are characterized by strict requirements for the appearance of medicines. We have built a rigorous quality control system and continually work to refine our processes. Now our dedicated team of manufacturing professionals knows what is expected and can meet any Japanese requirement."

Nakahashi adds, "We try to be prepared for any eventuality. If there is a quality problem, how quickly can we pinpoint the cause and prevent it from happening again? If production is halted, how quickly can we resume production? Resolving issues swiftly and permanently helps us to maintain quality and a stable supply."

Building on meiji brand's reputation for excellence

"When we first began distributing our products, some drugstores questioned whether they could trust our products because they'd never heard of Me Pharma before," Mukaide said. "However, in the food section of the same stores, the meiji brand had earned a solid reputation in the snacks and powdered milk sections. As a group, we have been able to leverage the power of the brand to introduce our pharmaceutical products to business partners that previously wouldn't have opened their doors to us. Now, when pharmacists recommend our products to patients, they are reassured of the quality because they have the meiji logo on them."

Growing the business to safeguard its stability and longevity

In 2023, Me Pharma plans to expand the scale of its business. "We are rapidly gaining respect for Me Pharma and confidence in its business model," Mukaide says. "We feel there are high expectations for our business model in collaboration with Medreich. We are determined to grow sales and build a profitable company that contributes to Meiji Group's success while ensuring Japan has an ample supply of generic drugs to meet customer demand."

With the production of products for the Japanese market secure, Nakahashi is already looking ahead to the next step. "Right now, expatriates from Meiji Seika Pharma are still making recommendations on manufacturing and incorporating their ideas locally," he says. "But I want the quality culture as a meiji brand to be more widely understood and recognized by every one of us at Medreich."

The generic drug business requires a threefold combination of price, quality, and stable supply. In establishing a business model that meets these conditions, the Meiji Group will continue to strengthen its collaboration with its global partners, taking on challenges that improve world health.