Takeda Pharmaceutical Co., Japan's largest drugmaker, has  agreed to buy Millennium Pharmaceuticals Inc. for $8.8 billion, gaining the cancer medicine Velcade that is poised to win wider use.

Takeda Pharmaceutical Co is the world's second-largest medicines market because domestic growth is hampered by the government's policy of reducing medicine prices every two years to curb the nation's 6.9 trillion yen drug bill. The deal follows Eisai Co.'s agreement in December to buy MGI Pharma Inc. for $3.9 billion as Japanese companies seek growth in the U.S. market.

Velcade, for rare blood cancers, generated more than $800 million last year as a treatment after other drugs fail. Millennium anticipates U.S. approval by June to promote Velcade as an initial therapy. Deborah Dunsire, Millennium's chief executive officer, and a former leader of cancer research at Novartis AG, will lead Takeda's global oncology development.

Takeda, based in Osaka, needs new drugs and research capacity as its biggest seller, the diabetes drug Actos, faces patent expiration in three years.

Millennium is conducting human trials with experimental drugs for cancer, heart disease, gastro-intestinal disorders and rheumatoid arthritis. The company is running more than 15 oncology trials for drugs that may treat tumors of the blood, prostate and liver.