Pharmaceuticals                                                        

 

Japan

Overview                                                                       

 

(millions of U.S. $)                    2004               2005(estimated)            2006(estimated)

Total Market Size                    67,518            63,325                            65,178

Total Local Production            60,419            56,354                            58,045

Total Exports                            1,176              1,154                              1,154

Total Imports                            8,275              8,125                              8,287

Imports from the U.S.               1,139              1,118                              1,151

(Note: The figures for 2003 and 2004 are the latest official figures; statistics for 2005 and 2006 are unofficial estimates.)

 

Japan continues to be the world’s second largest consumer of pharmaceuticals and the largest international market for American pharmaceutical firms.  Each year, sales of prescription drugs in Japan total about $60 billion.  Japan’s imports of foreign pharmaceuticals account for almost 10 percent of the total market, yet would be closer to 45 percent if direct imports, local production by foreign firms and compounds licensed to Japanese manufacturers were included.  Allowing for that, American pharmaceutical firms have actually achieved a market share approaching 20 percent.

 

Although Japan is the world’s second largest pharmaceutical market, Japan currently lags behind the United States, EU and many Asian markets in terms of access to new medicines.  The Ministry of Health, Labor and Welfare (MHLW) acknowledged the need to reduce the delays in the introduction of new drugs and positioned “Approval System Reform” as one of its most important issues.  In October 2006, MHLW created a study group to discuss this “drug lag” in order to accelerate patients’ access to effective pharmaceuticals.  In December 2006, the Council for Science and Technology Policy (CSTP), one of the Cabinet Office’s four councils addressing policy questions, approved its reform report, which included proposals such as doubling the number of reviewers at the Pharmaceutical Medical Device Agency (PMDA) in the next three years, increasing the fees paid by manufacturers to fund the costs for additional reviewers and deregulating employment rules to allow hiring staff from industry.  MHLW is expected to give serious consideration to the CSTP recommendations.   

 

MHLW also recognized the need to create higher incentives for manufacturers to develop new drugs in Japan through a more appropriate pricing system.  Japan’s new Prime Minister Abe is placing great importance in economic growth and his ”Innovation 25” strategy underscores fostering innovation in medicine as one of Japan’s top three priorities.  While these are positive developments for the pharmaceutical industry as a whole, Japan continues to face the problems of a rapidly aging society and is, therefore, examining ways to limit the growth of healthcare spending through means such as changes to its reimbursement pricing policies.  In 2006, the Japanese Government considered doubling the frequency of price revisions from once every two years to once every year.   Although Japan decided not to conduct a price revision in Japan in JFY 2007, the proposal may be revived in coming years.  Overall, Japan's market for pharmaceuticals is expected to exhibit flat to slightly positive growth in 2007 partly due to this lack of a price revision in 2007.

 

Best Products/Services            

 

Japan’s aging population is generating increased demand for pharmaceutical treatments for such chronic illnesses as cardiovascular problems, diagnostic reagents, digestive problems, diabetes, and cancer. It is also expected that the Japanese government will further promote the use of generic drugs to ease the cost burden on its healthcare system. 

 

Opportunities                                                               

 

Event:               CPhI Japan 2007

Dates:               April 18-20, 2007

Venue:              Tokyo Big Sight

Web:                www.cphijapan.com

Products:            Active pharmaceutical ingredients, contract manufacturing, biotechnologies, additives, fine chemicals, and intermediates.

 

Event:               INTERPHEX JAPAN

Dates:               June 20-22, 2007

Venue:              Tokyo Big Sight

Web:                www.interphex.jp

Products:            Raw materials, additives, materials processing machinery and equipment.

 

Resources                                                                   

 

CS Japan Contact: Mr. Hiroyuki Hanawa (Tokyo)            Hiroyuki.Hanawa@N0SPAM.mail.doc.gov

 

Ministry of Health, Labor and Welfare (MHLW)                                 www.mhlw.go.jp/

Pharmaceutical and Medical Device Agency (PMDA)                      www.pmda.go.jp/

Pharmaceutical Research and Manufacturers of America                   www.phrma-jp.org/

The Japan Pharmaceutical Manufacturers Association                   www.jpma.or.jp/