Pfizer and Mylan are to work together to develop, manufacture and market a range of generic drugs in Japan under the Pfizer brand.
The deal will involve a combined portfolio of more than 350 products across a range of therapeutic categories, as well as more than 125 additional products in development.
As part of the agreement, US-based generic firm Mylan will have responsibility for managing operations, including R&D and manufacturing, while Pfizer will handle commercialisation efforts and managing a combined sales and marketing team.
The companies will share costs and profits resulting from the collaboration, although specific terms are confidential. Both Mylan and Pfizer will also continue to operate independently in Japan.
The companies will also be looking to capitalise on a growing generics market in Japan, currently the sixth largest in the world and worth $5.2bn last year. The market is also poised for further growth, with the Japanese government aiming to increase the current volume of generic use from 24 per cent to 30 per cent by the end of 2012.
Further growth drivers for Japan's generics market will come from its aging population, patent expiries for major drugs and attempts to reduce healthcare spending.
This is in line with an expansion of the global generic drug market, which is due to increase in annual worth from $124bn in 2010 to $231bn by 2017.
Confirming these expectations Mylan's CEO Heather Bresch said: "We are very excited to have the opportunity to be partnering with Pfizer to build upon our existing assets and drive an even stronger, more sustainable generics business in Japan - one which will be well-positioned to take advantage of anticipated growth in generic utilisation in this market and other significant growth opportunities.”