Japanese Pharmaceutical Market Value Edging Toward $80 Billion

Japan’s pharmaceutical market value is set to grow at a tepid Compound Annual Growth Rate (CAGR) of 1.3% from $72.8 billion in 2013 to reach $79.8 billion by 2020, driven by new product launches and the healthcare burden of the country’s aging population, according to research and consulting firm GlobalData.

However, the company’s latest report, CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – Japan, states that the Japanese government’s promotion of generic drugs, its biennial pricing review system, and the depreciation of the yen against the dollar will be limiting factors in what is the second largest mature pharmaceutical market in the world by value.

The market was valued at $64.2 billion in 2008 and peaked at $88 billion in 2011, before a slight dip to $87.2 billion in 2012. A substantial drop in 2013 saw its value decrease by over $14 billion, but GlobalData expects a steady period of recovery to follow.

Joshua Owide, GlobalData’s Director of Healthcare Industry Dynamics, says: “Deregulation measures introduced in April 2005 have had an impact on overall market performance, and more efficient drug reviews have facilitated the entry of new products.

“The approval process has now caught up with that outside of Japan, as highlighted by two approvals for Bristol-Myers Squibb, the Daklinza (daclatasvir) and Sunvepra (asunaprevir) dual regimen for hepatitis C, and Opdivo (nivolumab) for melanoma, prior to their approval by the US Food and Drug Administration.”

Aside from wider economic factors, such as currency exchange rates, GlobalData states that increased use of generic drugs will be a key contributor to the forthcoming period of slow growth to 2020.

Owide continues “In 2008, generics accounted for 19% of the pharmaceutical space in terms of volume, rising to 25.2% in 2013. Japan has set a goal for generics to account for 60% of all drug use by 2017. To this end, the Ministry of Health, Labor and Welfare announced new price cuts in 2013 for drugs with generic replacement of less than 60%, a move which is likely to limit future growth in the pharmaceutical arena.”

This report provides information on the healthcare, regulatory, and reimbursement landscape in Japan. It includes annualized data on the pharmaceutical and medical device sectors from 2013 and forecast to 2020, plus an analysis of key market drivers and barriers. It was built using data and information sourced from proprietary databases, primary, and secondary research, and in-house analysis conducted by GlobalData’s team of industry experts.

GlobalData is a leading global research and consulting firm offering advanced analytics to help clients make better, more informed decisions every day. Its research and analysis is based on the expert knowledge of over 700 qualified business analysts and 25,000 interviews conducted with industry insiders every year, enabling us to offer the most relevant, reliable and actionable strategic business intelligence available for a wide range of industries. For more information, please contact our Press Office on +44 (0)1204 543 537 or at pr@globaldata.com. Gain access to GlobalData’s latest press releases and expert analysis on developments in your industry. Subscribe to our RSS feed for the Healthcare sector, or connect with us on: Facebook | LinkedIn | Twitter

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