Japan - Country Commercial Guide

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-07


Total Pharmaceuticals Market                                                                                                                                              Unit: USD thousands






 Local Production















Imports from the U.S.





 Market Size





Exchange Rates





 market size = local production + imports – exports

Data Sources:

Local Production: GOJ Ministry of Health, Labor and Welfare (MHLW)

Exports:  MHLW

Imports:  MHLW

Local production and import figures for 2020 are based on MHLW’s monthly report.

Import figures from U.S. for 2020are unofficial CS Japan estimates.

Japan continues to be one of the largest pharmaceutical markets in the world despite a challenging business landscape due to demographics. According to the Ministry of Health, Labor and Welfare (MHLW)’s Annual Pharmaceutical Production Statistics, the Japanese market for prescription and nonprescription pharmaceuticals in 2020 was $107 billion (down 0.7 percent from 2019 in yen terms). More than 90 percent of the market consists of prescription pharmaceuticals. Imports of foreign pharmaceuticals accounted for approximately 24 percent of the Japanese market in 2020. The market share of U.S. and other foreign origin pharmaceuticals, i.e., including local production by foreign firms and foreign-owned compounds licensed to Japanese manufacturers is estimated to be much higher. IQVIA, the world’s largest contract research organizations, and foreign companies projected that Japan’s overall growth will be the slowest among the developed markets with a compound annual growth rate (CAGR) between -2% and 1% in 2021-2025, while the worldwide growth is projected with a CAGR between 3% and 6% during the same period.  It also projected that the patented drug market, a market segment where U.S. companies have excellent products, is expected to grow, although the overall market is expected to see limited growth due to a decline in the off-patent drug market. The Government of Japan (GOJ)’s efforts to contain healthcare expenditure will continue to create a challenging pricing environment; however, the market is expected to remain the third largest and one of the most important destinations for U.S. and foreign innovative biopharmaceutical companies due to continued demands for innovative therapies.

Healthcare Policy

Japan’s healthcare system receives high marks for providing both basic care and a free choice of doctors to all citizens at an affordable cost, under the National Health Insurance (NHI) system established in 1961. The OECD described the health status of the Japanese people as one of the best in the world. Japan enjoys both the world’s highest life expectancy rate along with the lowest rate of infant mortality. The country spends about ten percent of its GDP on healthcare. However, Japan’s aging population, combined with a diminishing number of children has led to serious financial difficulties for Japan’s medical system. Under these circumstances, the Japanese government has been taking various measures to cut healthcare spending. Companies have expressed serious concerns that frequent changes to the Japanese pricing and reimbursement systems have made Japan an unpredictable market. In addition, a move from the current biennial reimbursement price revision to the annual revision (or the off-year price revision) from JFY 2021 further make the market unpredictable. However, the current situation with the coronavirus (Covid-19) pandemic, including the delay in developing vaccines in Japan, demonstrated the importance of innovative pharmaceuticals and vaccines. Under these circumstances, the GOJ’s annual economic and fiscal policy blueprint known as “honebuto” in 2021 spelled out the need to “secure transparency and predictability” in the drug pricing system for the first time. The U.S. pharmaceutical industry regards this as a positive step in policy direction.

Leading Sub-Sectors

Biopharmaceuticals: In the therapeutic category, anti-tumor agents posted the largest sales in 2020. Anti-tumor agents have been the top selling pharmaceuticals in the therapeutic category over the last several years and are still on the rise due to Japan’s aging society. Other top-selling pharmaceuticals that exhibited growth by therapeutic category included diabetes agents, antithrombotic agents, and ophthalmic agents. By pharmaceutical type, biopharmaceuticals are expected to grow even though the overall pharmaceutical market growth is projected to be negative. Many of the top-selling pharmaceuticals are biopharmaceuticals; however, the products account for approximately 15% of overall sales in Japan, which is significantly lower than the global biopharmaceutical sales ratio of approximately 30%. Similarly, biosimilars are expected to grow. While the number of antibody drugs sold in Japan is on the rise, approximately 90% of the products are manufactured overseas, indicating a high degree of dependence on overseas manufacturing bases. 

Digital Therapeutics: The Covid-19 pandemic has further made pharmaceutical companies recognize the importance of digital therapies that incorporate digital devices and IoT into treatment (DTx). Under such circumstances, pharmaceutical companies are accelerating external alliances to embrace digital technologies as a new method. In Japan, the first DTx (for nicotine addiction) was launched in December 2020. Yano Research, a well-known research company, predicts that the Japanese market for DTx will gradually grow from 2021 and will proceed at full speed around 2025. It also predicts that in addition to pharmaceutical companies that collaborate with domestic and overseas DTx development companies, companies that develop general health care apps are beginning to convert their own apps to DTx. Various players, such as medical information system companies and life insurance companies, are also expected to enter the market.


Venue: Makuhai Messe, Chiba
Description: INTERPHEX Week Tokyo consists of 4 exhibitions for pharmaceutical technologies - INTERPHEX JAPAN (Manufacturing & Packaging), in-PHARMA JAPAN (APIs/ Pharmaceutical Ingredients), BioPharma Expo (Biopharmaceutical) and PharmaLab Japan: formerly BIOtech Japan (Drug Discovery).  It is Japan’s largest exhibition for pharmaceutical and cosmetics manufacturing technologies.

CPhI Japan
Date: April 20 – 22. 2022
Venue: Tokyo Big Sight, Tokyo
Description: CPhI Japan consists of a wide range of exhibitors from ingredients, contract services and biopharma through to technology, packaging and machinery.  It is an international event focusing on the overall development of pharmaceuticals and medical devices.

Date: October 12 – 14, 2022
Venue: Pacifico Yokohama, Yokohama
Description: BioJapan is constituted by three exhibitions - BioJapan,  Regenerative Medicine JAPAN, and health TECH JAPAN.  It is one of the biggest bio business and partnering events in Japan.   


CS Japan Contact

Mr. Hiroyuki Hanawa, Senior Commercial Specialist