Japan - Country Commercial Guide
Pharmaceuticals

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

Last published date: 2020-10-30

Overview

Unit: USD thousands [NOTE: Figures may be revised later depending on availability of the latest MHLW figures.  END NOTE]

 

2016

2017

2018

2019

Total Local Production

60,960

59,958

62,570

84,600

Total Exports

  1,617

  1,489

  1,714

  1,350

Total Imports

36,310

30,671

28,516

24,971

Imports from the U.S.

  6,313
 

  6,484

  6,688

  4,944
(estimated)

Total Market Size

95,856

89,141

89,372

105,545

Exchange Rates

108.66

112.10

110.40

110.40

Total market size = total local production + imports – exports

Data Sources:

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

               Total Exports:  MHLW

               Total Imports:  MHLW

               Local production and export figures for 2019 are based on MHLW’s monthly report.

               Import figures from U.S. for 2019 are unofficial CS Japan estimates.

               (Figures for 2020 are unofficial CS Japan estimates.)

Japan continues to be one of the largest pharmaceutical markets in the world despite the more challenging business landscape due to demographics. According to the latest official figures from the Ministry of Health, Labour and Welfare (MHLW)’s Annual Pharmaceutical Production Statistics, the Japanese market for prescription and nonprescription pharmaceuticals in 2019 totaled $105 billion (up 18 percent from 2018 in yen terms). More than 90 percent of the total market consists of prescription pharmaceuticals. Imports of foreign pharmaceuticals accounted for approximately 30 percent of the total Japanese market in 2019. The total 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. According to IQVIA, the world’s largest contract research organizations, foreign companies, including U.S. companies, increased their market share for prescription pharmaceuticals to approximately 70 percent based on sales among the top 20 makers in Japan in 2019. The Japanese pharmaceutical market saw the first growth in three years in yen terms; however, it is projected to see negative growth in coming years due to a continuing challenging pricing environment as the Japanese government attempts to contain healthcare expenditure. In addition, the new coronavirus infection (COVID-19) is likely to have a major impact on the domestic pharmaceutical market. IQVIA projected the COVID-19 will have a negative impact of up to 303 billion yen ($2.74 billion) on the domestic prescription drug market in FY2020.IQVIA projected that Japan’s overall growth will be the slowest among the developed markets with a negative compound annual growth rate (CAGR) between -3% and 0% in 2020-2024, while the worldwide growth is projected with a positive CAGR between 3% and 6% during the same period. However, despite the challenging pricing environment, 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, which is relatively low compared to other industrialized nations. 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) scheduled from JFY 2021 is expected to have significant impact on the prices  depending on the scope of products covered under the off-year revision.  U.S. pharmaceutical companies need to keep in mind these constant price changes as they pursue their market entry strategy.

Leading Sub-Sectors

Biopharmaceuticals

Among therapeutic category, anti-tumor agents posted the largest sales in 2019. Anti-tumor agents have been the top selling pharmaceuticals by therapeutic category in the last several years and are still on the increase. Other top selling pharmaceuticals, by therapeutic category, included diabetes agents, antithrombotic agents, immunosuppressants, 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 top-selling pharmaceuticals are biopharmaceuticals; however, the products account for approximately 15% of the overall sales in Japan, which is significantly lower than the global biopharmaceutical sales ratio of approximately 30%. Similarly, biosimilars are expected to grow. Fuji Keizai, a research company, projected the biosimilar market will expand to approximately 60 billion yen ($543 million) in 2022, more than four times from 2017.  

Opportunities

INTERPHEX Week JAPAN (https://www.interphex.jp/en-gb.html)

November 25 – 27, 2020

Tokyo Big Sight, Tokyo

Bio Japan 2019 (http://www.ics-expo.jp/biojapan/en/index.html)

October 14 – 16, 2020

Pacifico Yokohama, Yokohama

Medical Japan 2020 (https://www.medical-jpn.jp/en-gb.html)

–October 14 - 16, 2020

Makuhari Messe, Chiba

CPhI Japan (https://www.cphi.com/japan/en/home.html)

–September 30 – October 2, 2020

Intex Osaka, Osaka

Web Resources

Overview

Unit: USD thousands [NOTE: Figures may be revised later depending on availability of the latest MHLW figures.  END NOTE]

 

2016

2017

2018

2019

Total Local Production

60,960

59,958

62,570

84,600

Total Exports

  1,617

  1,489

  1,714

  1,350

Total Imports

36,310

30,671

28,516

24,971

Imports from the U.S.

  6,313

  6,484

  6,688

  4,944
(estimated)

Total Market Size

95,856

89,141

89,372

105,545

Exchange Rates

108.66

112.10

110.40

110.40

Total market size = total local production + imports – exports

Data Sources:

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

               Total Exports:  MHLW

               Total Imports:  MHLW

               Local production and export figures for 2019 are based on MHLW’s monthly report.

               Import figures from U.S. for 2019 are unofficial CS Japan estimates.

               (Figures for 2020 are unofficial CS Japan estimates.)

Japan continues to be one of the largest pharmaceutical markets in the world despite the more challenging business landscape due to demographics. According to the latest official figures from the Ministry of Health, Labour and Welfare (MHLW)’s Annual Pharmaceutical Production Statistics, the Japanese market for prescription and nonprescription pharmaceuticals in 2019 totaled $105 billion (up 18 percent from 2018 in yen terms). More than 90 percent of the total market consists of prescription pharmaceuticals. Imports of foreign pharmaceuticals accounted for approximately 30 percent of the total Japanese market in 2019. The total 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. According to IQVIA, the world’s largest contract research organizations, foreign companies, including U.S. companies, increased their market share for prescription pharmaceuticals to approximately 70 percent based on sales among the top 20 makers in Japan in 2019. The Japanese pharmaceutical market saw the first growth in three years in yen terms; however, it is projected to see negative growth in coming years due to a continuing challenging pricing environment as the Japanese government attempts to contain healthcare expenditure. In addition, the new coronavirus infection (COVID-19) is likely to have a major impact on the domestic pharmaceutical market. IQVIA projected the COVID-19 will have a negative impact of up to 303 billion yen ($2.74 billion) on the domestic prescription drug market in FY2020.IQVIA projected that Japan’s overall growth will be the slowest among the developed markets with a negative compound annual growth rate (CAGR) between -3% and 0% in 2020-2024, while the worldwide growth is projected with a positive CAGR between 3% and 6% during the same period. However, despite the challenging pricing environment, 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, which is relatively low compared to other industrialized nations. 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) scheduled from JFY 2021 is expected to have significant impact on the prices  depending on the scope of products covered under the off-year revision.  U.S. pharmaceutical companies need to keep in mind these constant price changes as they pursue their market entry strategy.

Leading Sub-Sectors

Biopharmaceuticals

Among therapeutic category, anti-tumor agents posted the largest sales in 2019. Anti-tumor agents have been the top selling pharmaceuticals by therapeutic category in the last several years and are still on the increase. Other top selling pharmaceuticals, by therapeutic category, included diabetes agents, antithrombotic agents, immunosuppressants, 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 top-selling pharmaceuticals are biopharmaceuticals; however, the products account for approximately 15% of the overall sales in Japan, which is significantly lower than the global biopharmaceutical sales ratio of approximately 30%. Similarly, biosimilars are expected to grow. Fuji Keizai, a research company, projected the biosimilar market will expand to approximately 60 billion yen ($543 million) in 2022, more than four times from 2017.  

Opportunities

INTERPHEX Week JAPAN (https://www.interphex.jp/en-gb.html)

November 25 – 27, 2020

Tokyo Big Sight, Tokyo

Bio Japan 2019 (http://www.ics-expo.jp/biojapan/en/index.html)

October 14 – 16, 2020

Pacifico Yokohama, Yokohama

Medical Japan 2020 (https://www.medical-jpn.jp/en-gb.html)

–October 14 - 16, 2020

Makuhari Messe, Chiba

CPhI Japan (https://www.cphi.com/japan/en/home.html)

–September 30 – October 2, 2020

Intex Osaka, Osaka

Web Resources

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

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

Pharmaceutical Research and Manufacturers of America (http://www.phrma-jp.org/)

The Japan Pharmaceutical Manufacturers Association (http://www.jpma.or.jp/)

The Federation of Japan Pharmaceutical Wholesalers Association (JPWA) (http://www.jpwa.or.jp/)

Pharmaceutical and Medical Device Regulatory Science Society of Japan (PMRJ) (http://www.pmrj.jp/)

The Pharmaceutical Society of Japan (PSJ) (https://www.pharm.or.jp/)

Japan Generic Medicines Association (JGA) (http://www.jga.gr.jp/)

Japan Bioindustry Association (JBA) (https://www.jba.or.jp/en/)

CS Japan Contact:

Pharmaceutical and Medical Device

Mr. Hiroyuki Hanawa, Senior Commercial Specialist

Hiroyuki.Hanawa@trade.gov

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

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

Pharmaceutical Research and Manufacturers of America (http://www.phrma-jp.org/)

The Japan Pharmaceutical Manufacturers Association (http://www.jpma.or.jp/)

The Federation of Japan Pharmaceutical Wholesalers Association (JPWA) (http://www.jpwa.or.jp/)

Pharmaceutical and Medical Device Regulatory Science Society of Japan (PMRJ) (http://www.pmrj.jp/)

The Pharmaceutical Society of Japan (PSJ) (https://www.pharm.or.jp/)

Japan Generic Medicines Association (JGA) (http://www.jga.gr.jp/)

Japan Bioindustry Association (JBA) (https://www.jba.or.jp/en/)

CS Japan Contact:

Pharmaceutical and Medical Device

Mr. Hiroyuki Hanawa, Senior Commercial Specialist

Hiroyuki.Hanawa@trade.gov