Excitement is growing ahead of the Food and Drug Administration's decision on Gilead Sciences (NASDAQ:GILD) next generation hepatitis C treatment. Most expect that the regulator will give the Sovaldi and ledipasvir combination drug the green light when it makes its decision on October 10, but Gilead isn't sitting back on its heels waiting. The company announced this week that it's also submitted the Sovaldi and ledipasvir one-drug therapy for approval in Japan, one of the globe's biggest markets for hepatitis C treatment.

The move is an important one because it could ultimately allow Gilead to erase Bristol Myers (NYSE:BMY) early lead in that market, potentially giving Gilead an opportunity to capture billions of dollars in sales.

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Source: Gilead Sciences

An end around
An aging population makes Japan an attractive market for drug developers. The country's birthrate has been declining steadily since the 1970s, and 24% of its population is over the age of 65.

As a result, Japan accounts for 10% of the global market for drug spending and that means it trails only the United States in spending on medicine. That means that Japan is important to drugmakers tackling hepatitis C. There are 2.7 million people in the U.S. battling the disease and 1.2 million people are diagnosed in Japan, but the number of new diagnosis in Japan every year totals 350,000, which is far greater than the 150,000 new cases diagnosed every year in America.

To tap into that market, Bristol-Myers won approval earlier this year for its two drug combination therapy consisting of daclatasvir, sold under the brand name Daklinza, and asunaprevir, which is sold under the name Sunvepra. That combination is the first to win approval in Japan that doesn't include side effect laden ribavirin and interferon in the treatment guidelines.

Bristol's decision to file for approval first in Japan gives it an early lead over Gilead, which focused on the U.S. and America instead. But if Japan approves the Gilead and ledipasvir combination, that lead may fade quickly.

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Source: Department of Veterans Affairs

Increasingly better drugs
Bristol's Daklinza and Sunvepra combination put up solid results during clinical trials, clearing the disease in nearly 85% of cases after 24 weeks of treatment.

But Gilead's Sovaldi and ledipasvir results are better. Much better. During phase 3 trials of Japanese patients, the combination cleared the disease in 100% of patients after just 12 weeks of treatment. That's a game changer.

Gilead's two drug tandem not only cleared the disease in every patient who had never previously attempted treatment, known as treatment-naive, but also cleared the disease from all 88 of the previously treated patients, too.

Those results outpaced previous studies that included patients in the U.S. and European Union. In those studies, the combination therapy cleared the disease in between 94%-99% of the 863 patients taking it.

Eyes on the prize
Gilead continues to execute on a global marketing strategy for treating hepatitis C that mirrors its prior success in becoming the world's leading maker of HIV medicine. Gilead has announced plans to allow generic drugmakers to begin making and selling Sovaldi in emerging markets, an important step in reaching millions of chronically infected patients. That move will extend Sovaldi's reach and usefulness even as Gilead's new Sovaldi and ledipasvir combination makes its way to market. With Gilead's next generation hepatitis C drug looming, the company is likely to continue to dominate the market in 2015, which is good news for investors given the company notched over $5 billion in Sovaldi sales in the first six months of this year.

Todd Campbell owns shares of Gilead Sciences. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not own positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends Gilead Sciences. The Motley Fool owns shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.