Teva Pharmaceutical Industries Ltd., the world's biggest maker of generic drugs, and Kowa Co. have agreed to form a joint venture to gain a share of the growing market for cheaper medicines in Japan.

They expect the business, Teva-Kowa Pharma Co., to generate sales of $1 billion in 2015, Teva, based in Petah Tikva, Israel, said Wednesday. Each company will have a 50 percent stake in the venture, which will be operational in 2009.

Teva seeks to break into the $65 billion a year Japanese drug market as the country tries to reduce health care costs by developing more incentives for pharmacists to dispense generics.