Report from Japan - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Report from Japan
After a series of government reforms that are appealing to both domestic and foreign players, the Japanese pharmaceutical market is making a comeback.


Pharmaceutical Technology
Volume 36, Issue 8, pp. 16-18

Ranjith Gopinathan, program manager of life sciences and healthcare practice at Frost & Sullivan, adds, "Strongly backed by the government, the generics market is encouraged by initiatives such as relaxing registration procedures and providing incentives to doctors prescribing them over branded drugs."

Interestingly, foreign presence has reshaped the business strategies of domestic players. Jamie Davies, head of pharmaceuticals and healthcare at Business Monitor International, says, "Typically, Japanese pharmaceutical companies are conservative in nature and focus primarily on the domestic market and have limited exposure in less developed states. However, the dual effect of patent expiries and reduced research productivity has forced them to increasingly look abroad for sales growth. As a result, several are looking to emerging markets to generate new growth."

Domestic companies have started to forge strong links with international firms and foreign markets. All the leading Japanese firms derive around 40% of their revenue from overseas markets, mainly the US, although exposure to emerging markets is increasing, adds Davies. In October 2010, Takeda Pharmaceutical in Tokyo announced plans to form alliances with Indian companies to sell its patented drugs and to offer basic business services.

The M&A quest has also gained momentum in Japan with Takeda's acquisition of Nycomed, based in Zurich, Switzerland, for $13.7 billion in September 2011. Takeda Farmacêutica Brasil has signed an agreement to acquire Multilab Indústria e Comércio de Produtos Farmacêuticos, based in Rio Grande do Sul, Brazil, by the end of the second quarter of 2012.

Of course, there are exceptions. Recently, Eisai, based in Tokyo, has shifted its focus back to East Asia, citing the region's enormous potential, especially now that the Japanese market is becoming attractive again thanks to government initiatives. Likewise, Sawai Pharmaceutical in Osaka is concentrating on the Japanese market and exploring partnerships with larger pharmaceutical companies to expand its therapeutic range.

Thomas adds, "From a portfolio perspective, Japanese pharmaceutical companies will put their focus on speciality pharma, oncology, and biological platforms. This acquisition activity will gain momentum as a strategy for market entry and portfolio expansion." Although domestic firms control 66% of the Japanese pharmaceutical market share, the market remains attractive to foreign big players for its lower risk and exposure compared with other markets. In fact, a Bloomberg source indicates that the prominent companies are doing quite well. Pfizer grew Japanese sales to $7.3 billion last year and GlaxoSmithKline figures were up by 28% in the same year. Large-scale companies are well-positioned due to their strong late-stage pipelines and aggressive launch objectives to continue to grow over the next two to three years. On the other hand, smaller-scale players with no presence in Japan may have to opt for out-licensing or partnering to maintain growth.

Jane Wan is a freelancer writer based in Singapore


ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
FDASIA was signed into law two years ago. Where has the most progress been made in implementation?
Reducing drug shortages
Breakthrough designations
Protecting the supply chain
Expedited reviews of drug submissions
More stakeholder involvement
Reducing drug shortages
32%
Breakthrough designations
8%
Protecting the supply chain
40%
Expedited reviews of drug submissions
8%
More stakeholder involvement
12%
View Results
Jim Miller Outsourcing Outlook Jim Miller Health Systems Raise the Bar on Reimbursing New Drugs
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerThe Mainstreaming of Continuous Flow API Synthesis
Jill Wechsler Regulatory Watch Jill Wechsler Industry Seeks Clearer Standards for Track and Trace
Siegfried Schmitt Ask the Expert Siegfried SchmittData Integrity
Sandoz Wins Biosimilar Filing Race
NIH Translational Research Partnership Yields Promising Therapy
Clusters set to benefit from improved funding climate but IP rights are even more critical
Supplier Audit Program Marks Progress
FDA, Drug Companies Struggle with Compassionate Use Requests
Source: Pharmaceutical Technology,
Click here