Towa Pharmaceutical Co (TYO:4553) reached a basic agreement with Otsuka Pharmaceutical to build a collaborative framework for pharmaceutical manufacturing, aiming to ensure a stable supply of off-patent medicines, according to a Wednesday filing on the Tokyo Stock Exchange.

Under the agreement, Towa will take on the transfer and contract manufacturing of selected products from Otsuka and use Otsuka's licenses to develop related generics.

The two companies also plan to set up a mutual backup production system, prioritizing long-listed and essential drugs, with production starting sequentially from March 2026.

Towa said the partnership responds to persistent drug shortages in Japan and seeks to preserve manufacturing know-how from brand-name products whose patents have expired. The agreement bridges traditional boundaries between brand-name and generic drugmakers.