Japanese Pharmaceutical Market Research Articles

Japanese Pharmaceutical Industry: Recent Perspectives and Areas for Further Research

The Japanese pharmaceutical market is one of the largest in the world. The Japanese government has increasingly been trying to control rising health care costs, and as a result, pharmaceutical companies are expecting that fewer opportunities will be available to command a higher price based on higher levels of innovation; this will likely lead to decreased interest in research and development (R&D) activities. With this background, the purpose of this article is to review current perspectives for R&D by the Japanese pharmaceutical industry, and to discuss the limitations and challenges for further research from the regulatory science and management perspectives. Given the substantial amount of evidence of regulatory science and management perspectives from the pharmaceutical industry outside of Japan and the limited amount of evidence from inside of Japan, it is important to review perspectives focusing on the Japanese pharmaceutical industry in comparison with those from other countries to understand the complexities of the Japanese pharmaceutical market, as well as the limitations and challenges associated with increasing productivity.
 https://doi.org/10.21423/jrs-v08shoyo

Analysis of new molecular entity trends from 2006 to 2015 in Japan

Japan is one of the largest pharmaceutical markets in the world, and as such, pharmaceutical companies are intensively conducting research and development of new drugs in Japan. However, information on Japanese pharmaceutical market profiles is limited. In this context, we elucidated the market characteristics and trends of new molecular entities approved between 2006 and 2015 in Japan. Among antineoplastic and immunomodulating agents, the highest number was first approved in the United States, and for nervous system drugs, the highest number was first approved in Europe. The alimentary tract and metabolism and the musculoskeletal system were the therapeutic areas for which the most drugs were approved for the first time in Japan. Most of the musculoskeletal system drugs were developed by Japanese companies, and most of the antineoplastic and immunomodulating agents were developed outside of Japan. Using various performance indexes, such as market forecasts and significance of clinical benefits, we determined that the number of new molecular entities and market size increased and the number of drugs with significant clinical benefits decreased. These results suggest that new molecular entity innovation by Japanese companies has been decreasing and the government’s comparative method for pricing does not work well in Japan.

A Comparative Study of the Market Configuration of the Japanese Pharmaceutical Market Using the Gini Coefficient and Herfindahl–Hirschman Index

As of 2015, the Japanese pharmaceutical market was the world's third largest pharmaceutical market. Although previous studies have examined market differences in terms of market size and pricing policy, little is known about comparative market configurations. The present study provides a comparative analysis of pharmaceutical market configurations in Japan and five other markets. Based on data for the 100 top-selling drugs in 2014 in Japan, the United States, the United Kingdom, France, Germany, and the global market, we explored differences in market configurations using the Herfindahl-Hirschman Index, Lorenz curves, and Gini coefficients. We also investigated market trends by analyzing changes in sales, sales volume, and price. The 100 top-selling drugs accounted for a lower share of the total market in Japan, France, and Germany as compared to the United States and the United Kingdom. The market deviation of the 100 top-selling drugs indicated by the Herfindahl-Hirschman Index and Gini coefficient was smallest in Japan. Sales of most of the top-100 drugs increased in all the countries studied; however, directional price changes differed by country and sales volume trend. Our findings showed that market deviations in Japan were relatively low compared with those in other developed countries, suggesting that some of the more beneficial drugs in other developed countries obtain relatively fewer benefits from the Japanese pharmaceutical market, and some less beneficial drugs obtained more benefits.

Telegraph communication networks used by the Japanese pharmaceutical industry in 1901

Abstract This article examines how the communication network of the Japanese pharmaceutical industry operated around the turn of the century to create spatial interactions across the national medicine market during a period of intense industrialization. In 1901, pharmaceutical wholesalers in Osaka compiled The Telegraph Codebook of Pharmacies in Japan to facilitate national trade in medicine, although its use was restricted to only the 177 pharmacies that joined the Pharmaceutical Telegraph Communication Alliance. This alliance had close ties with wholesalers in Osaka and comprised national-level qualified chemists. The use of this communication network by telegraph enabled the integration and progression of the Japanese pharmaceutical market in the early 20th century; however, pharmacies also began to build different and layered communication networks that corresponded to their respective business styles. Findings indicate that pharmacies used different communication networks of different spatial scales, thereby operating regional specialization and national integration networks simultaneously.

The pharmaceutical market and drug development prognosis in Japan: Current and future perspectives according to pharmacological classes

Japan is now the second largest pharmaceutical market in the world. As a unique population, it provides many opportunities for pharmaceutical companies to develop their businesses. However, the market is strictly regulated by the government, and drug prices are determined according to the rules in Japan. Nevertheless, no detailed empirical analyses have been conducted to clarify what opportunities may exist for pharmaceutical companies in the future. In the present article, we reviewed the pros and cons of the Japanese pharmaceutical market including related regulations, discussed our analyses of economic and regulatory science, and provided future perspectives on drug development and the pharmaceutical market in Japan. Specifically, we first clarified the Japanese pharmaceutical market profile using the publically available market database. Second, we reviewed the Japanese pharmaceutical pricing system, and found inconsistencies between the “pricing premium for the promotion of new drug development and the elimination/resolution of off-label use” and “repricing for market expansion” based on our literature review. Finally, we provided future perspectives on the pharmaceutical markets in Japan, as well as the direction of the research and development of new drugs.

Impact of generic entry to off-patent branded medicines in Japanese pharmaceutical market

The Japanese pharmaceutical market is known for having a relatively low market penetration of generic medicines. However, the velocity of generic penetration varies among medicines. Looking at current sales and share of off-patent branded medicines and generic medicines in Japanese pharmaceutical market, our main aim is to identify the factors associated with sales reductions of off-patent medicines and price competition caused by generic entry in the Japanese pharmaceutical market. We showed as one result that an increase in the number of generic maker entries significantly increases both price competition and sales reductions of off-patent branded medicines. As a second factor of note, we found that being subject to “NHI Drug Price Premium for Promoting the Creation of New Drugs and the Elimination of Off-label Use” before generic entry is related to maintaining sales of off-patent branded medicines after generic entry. The importance of generic medicines is increasing in association with the hypertrophy of health care expenditures in Japan. Efficient polices and corporate strategies reflecting market principles are strongly needed. Detailed results of this study on what determines whether sales and prices of off-patent medicines significantly decrease after generic entry in the Japanese pharmaceutical market should be useful for this purpose.

Evaluating the Effectiveness of Repricing for Market Expansion in the Japanese Drug Pricing System.

In 1994, the "Repricing for Market Expansion" system (the repricing system) was introduced to the pharmaceutical market in Japan to improve the financial performance of the national health insurance system. In 2010, the "Reward Premiums for the Promotion of Innovative Drug Discovery and the Resolution of Off-Label Use Issue, Etc." system (the reward system) was introduced to promote the development of new drugs. This study evaluates the effectiveness of these systems from an empirical perspective. The data set used in this study was created using publicly available information from the Ministry of Health, Labour and Welfare (MHLW) website and a market database maintained by IMS Japan Pharmaceutical Market Sales. Anticancer or immunomodulating drugs were the most frequently affected by the repricing system. The sales of similar drugs did not exceed double the sales forecast, and to begin with, the repricing system was not applied to these drugs, unintentionally reducing the profitability of pharmaceutical companies. In addition, we found that pharmaceutical expenditures have been steadily and significantly increasing, although this aspect is just one of the circumstances surrounding the Japanese pharmaceutical market. On the basis of these results, we propose that the current repricing system be replaced with one using a market mechanism that can evaluate the value of drugs from an economic perspective and help improving the financial performance of the national health insurance system. We also suggest that the number of generic medications on the market in Japan be increased to a ratio equivalent to those of the US and EU. We hope that the perspectives on Japan's unique drug pricing system obtained from this article are utilized by pharmaceutical companies in developing their businesses in Japan.

Emerging Growth of Orphan Drugs for Neurological Diseases in Japan: Potential Benefits for Both Patients and Pharmaceutical Companies

Despite the existence of numerous rare neurological diseases, no studies have been conducted on orphan drugs for neurological diseases available on the Japanese pharmaceutical market and their potential benefits. In this context, from a statistical perspective, we investigated 1) the market position of orphan drugs in Japan, and 2) the market penetration of generic medicines. To the best of our knowledge, this is the first empirical study to examine the current status and development strategy of orphan drugs approved for neurological diseases in the Japanese pharmaceutical market. The perspectives provided by this research are expected to promote the clinical development of orphan drugs in Japan for patients suffering from intractable neurological diseases that currently have no known effective therapies. The dataset used in this research was generated from publicly and commercially available data sources in Japan. Marketing approvals for orphan neurological products have increased dramatically in recent years. As much as 10% of all drugs approved for neurological diseases in Japan were orphan drugs that met urgent medical needs. Six of these orphan drugs were ranked in top 500 best-selling drugs in Japan, which indicated the presence of a potentially large market. Compared with more conventional drugs, the prices of orphan drugs are not expected to be reduced. In addition, due to an apparent lack of competition from generics, the quantity of available orphan drugs has remained steady, suggesting stable long-term sales. Most orphan drugs in Japan have adopted innovative marketing strategies that divide major neurological diseases into a more specific variety of rare disease categories. We found that orphan drugs approved for neurological diseases in Japan have been launched steadily. It is unlikely that these drugs will be affected by regular price revisions and the launch of their generic counterparts. Based on these findings, the further development of orphan drugs in Japan should be encouraged in order to meet urgent medical needs and deliver innovative drugs to patients suffering from rare neurological diseases.https://doi.org/10.21423/jrs-v04n03p007 (DOI assigned 5/31/2019)

Commentary: Patient Cost Sharing and Medical Expenditures for the Elderly.

Commentary: Patient Cost Sharing and Medical Expenditures for the Elderly.

Comparative Analysis Between the Top-Selling Drugs in the Japanese Pharmaceutical Market and Those in the United States, the United Kingdom, France, and Germany.

Japan is currently the second largest pharmaceutical market in the world, and Japanese pharmaceutical companies are actively seeking to identify assets in other countries. An affluent population provides ample opportunity for pharmaceutical companies to develop within Japan; however, given its weak macroeconomic foundation, Japan is currently seeking to cut costs through the use of more generic drugs and lower prices. Nevertheless, no detailed empirical analyses regarding how Japanese companies can expand their global presence while ensuring domestic sales, or what opportunities lie ahead for global companies planning to enter the Japanese market, have been conducted. To our knowledge, this is the first study to provide statistical evidence regarding characteristics of the Japanese market. The data set for this study was the most recent list of the 100 top-selling drugs globally and in Japan, the United States, the United Kingdom, France, and Germany. The data were obtained from the IMS Japan Pharmaceutical Market database. More cardiovascular and less central nervous system (CNS) and oncology drugs were ranked among the top 100 best-selling drugs in the Japanese market; however, the promotion of CNS and oncology drug development was evident, and competition from generic drugs was shown to have eroded, especially in therapeutic areas with no assured benefits in the global market, such as with cardiovascular drugs. These results suggest that the Japanese market will rival overseas markets in the near future. Pharmaceutical companies should seriously consider operating within Japan, whose market is currently transitioning to a global market.

Impact of Premium Rewards for the Promotion of Innovative Drug Discovery on the Japanese Pharmaceutical Market: An Analysis by Therapeutic Area.

A new incentive program, "Premium Rewards for the Promotion of Innovative Drug Discovery and Resolution of Off-Label Use, etc," was introduced in Japan in 2010 and subsequently applied in 2010, 2012, and 2014. In our previous study, we reported statistical evidence regarding the attributes of drugs for which these premium rewards were used. We found that orphan drugs and drugs in certain therapeutic areas, including neuroscience, oncology, and immunology, were likely to receive rewards. However, that investigation was not conducted to clarify how the rewards system affects pharmaceutical sales or whether drugs that received rewards led to more profits for pharmaceutical companies. The data set for this study was a list of the 500 top-selling pharmaceuticals in Japan from 2010 to 2014, which was obtained from the IMS Japan Pharmaceutical Market database. To clarify the effect of the rewards system on different therapeutic areas, total sales and quantity sold were compared between drugs that received rewards and those that did not. The rewards system positively affected drug sales in specific therapeutic areas, including those with Anatomical Therapeutic Chemical (ATC) classifications neuroscience (N) and oncology (L), as well as the quantity sold of neuroscience-related drugs. Our study suggests that this system has been working according to its original aim of promoting the development of innovative drugs in Japan.

A perspective on the benefit-risk assessment for new and emerging pharmaceuticals in Japan.

The universal health care system in Japan is facing a historical turning point as a result of the increasing fiscal burden, rapidly aging society, and a decreasing population. To understand the challenges and opportunities in the Japanese pharmaceutical market, which occupies one tenth of the global share, this review highlights several issues related to the benefit-risk assessment that is unique to the modern Japanese society: 1) regulatory system for new drug development; 2) health hazards related to pharmaceuticals (“Yakugai” in Japanese); 3) drug lag; 4) problems and controversies in the vaccination policy; and 5) clinical study misconduct. The regulatory process places a significant importance on Japanese data collection regardless of data accumulation from other countries. Because Yakugai has repeatedly caused tragedies and social disputes historically, the regulatory judgments generally tend to be more prudential when safety concerns are raised for new and emerging pharmaceuticals. Such a regulatory system has caused more than several years of approval delays compared to delays in other countries. The problem of drug lag still lingers on despite several regulatory system revisions, while the solution is incompatible with the elimination of Yakugai because the lag potentially reduces the risk of unpredictable adverse events. The Japanese vaccination policy has also received a lot of criticism, and needs improvements so that the decision-making process can be more transparent and scientifically based. Additionally, repeated clinical study misconduct damaged the reputation of Japanese clinical studies with unnecessary defrayment in health insurance; therefore, the medical community must change its inappropriate relationship with the industry. The problems surrounding pharmaceuticals are related to centralized, strict drug pricing control under the universal health coverage. Although the current government attempts to facilitate innovative research and development of novel therapeutics in Japan, further reforms should be explored for patients who need new and emerging pharmaceuticals.

Analyzing the generic penetration trend in the Japanese dispensing market by therapeutic category

Japanese government has started to implement several actions to promote the use of generics; however, the generic penetration rate in value advanced rather slowly from 15.4% in March 2006 to 18.7% in December 2009. Japanese pharmaceutical market has at least two unique facts which differentiate from other markets: timing of generics launch and pricing. These unique features may require a new entrant to consider the different marketing strategy. In this article, we observed that the penetration rate varies among therapeutic categories and the penetration curve for vasodilators, miscellaneous antineoplastics, and synthetic antibacterials is similar. Particularly, these categories had a launch of major original drugs within the examined period and the logistic regression for each category indicated that the reflection point of the curve was 21, 33, and 39 days after the generics launch, accordingly. As previous research suggests that the estimated sales revenue of the original drug is considered as a key determinant for generic drug penetration even in Japan. Japanese generics market will likely grow with a support of government generic promotion policy and the upcoming patent expiry of blockbusters. It is important to consider the entry strategy by therapeutic category and plan the early market penetration strategy.

GENERIC ENTRY IN A REGULATED PHARMACEUTICAL MARKET

This paper examines generic entry into the Japanese pharmaceutical market. Relatively little is known about generic entry in regulated markets. Using micro data between 2003 and 2005, I find that generic entry is sensitive to the prescription pattern driven by the price regulation and healthcare system. Fewer generics enter if the drug is more frequently prescribed at large hospitals and at medical institutions where prescribing and dispensing are separated. Economies of scope in entering multiple markets also affect entry decisions. Brand revenues, which are an important determinant in unregulated markets, also explain generic entry in the regulated market.

The Market Exclusivity Period for New Drugs in Japan: Overview of Intellectual Property Protection and Related Regulations

This paper reviews the institutional factors in Japan that affect the market exclusivity period for new drugs. The factors which directly affect the period are (1) statutory subject matter of patent protection, (2) patent term extension, and (3) restriction of the entry of generic drugs (market exclusivity right or data protection system). Other factors include (4) the experimental use exception (the so-called Bolar provision) and (5) compulsory license. In addition, the impacts of these factors on both brand-named manufacturers and generic drug manufacturers under the specific circumstances of the Japanese pharmaceutical market, such as the influence of the healthcare insurance system or the drug price control system, are discussed.

Sleep-medication for symptomatic insomnia in the general population of Japan

The commercial availability of psychotropic drugs has an important effect on the consumption of medications for the symptomatic treatment of insomnia. Traditional benzodiazepines have been the most frequently prescribed psychotropic medications for promoting sleep in clinical practice in Japan. In recent years, non-diazepine drugs, antidepressant selective serotonin-reuptake inhibitors and over-the-counter sleep aids have been introduced into the Japanese pharmaceutical market. This study aimed therefore to make a poplulation-based assessment of sleep-medication use using the baseline data of a nationally representative sample of 2800 Japanese adults collected in 1997 before such changes. The Pittsburgh Sleep Quality Index was used to measue the symptoms of insomnia and the use of sleep medicine. A total of 1871 subjects participated in our analyses. The overall age-adjusted prevalence of sleep-medication use was 7.4%: 1.3%, 2.0% and 4.1% for <1 time, 1–2 times, and 3+ times per week during the past month, 6.5% and 0.9% for medically prescribed medicine and self-medicated sleeping pills, respectively. Of those with frequent insomniac symptoms, 75% remaied untreated. However, 3% of the users suggests the possibiliy of hypnotic-dependency. Over one-half of the users had multiple illnesses and consulted two or more different medical specialists. Physicians accounted for a disproportionately high percentage of all prescriptions of sleep medicine. Neuropsychiatrists replaced physicians after sociodemographic adjustments. Diabetes mellitus, heart disease, hypertension, and gastroduodenal ulcer represented the most common medical illnesses relating to sleep medication. This study drives the need to further investigate how to manage and treat individuals with insomnia.

Current Situation for Generic Drugs in Japan

Although the Japanese pharmaceutical market is the second largest market in the world, the share of generics is extremely low when compared with those in the USA, the UK and Germany. The reason for this is that there are several obstacles to quick access to, and market penetration of, generics that would be incomprehensible to foreign companies. In Japan, systems such as substitution of generics for brands, reference pricing, etc have not yet been implemented. Similarly, the complete separation of prescribing and dispensing medicines has not occurred in Japan, where 48 per cent of medical institutions both prescribe and dispense pharmaceutical products. This is in stark contrast to both the USA and the EU, where complete separation exists. Medical institutions that gain profits from the gap between the purchasing and reimbursement price still tend to use brands with higher profit margins than generics; however, the push to promote the use of generics has just started. Therefore, generics companies and their associations must implement appropriate strategies in response to the changing circumstances.

Japanese Competitive Intelligence for R&amp;D

Japan's large corporations have a well-deserved reputation for aggressiveness in gathering competitive technology information worldwide. Until recently, however, this information-gathering was seen as a mere technology-seed search to beat Japanese rivals to licensing-in opportunities, or to catch up to technology overseas. For example, there is a major Japanese pharmaceutical company with big sales in drugs for senile dementia and osteoporosis--the largest areas of profit and growth in the Japanese pharmaceutical market. Matching its search with forecasts of disease patterns in these areas, this company looked for technology seeds, and found new and appropriate chemical entities in Hungary. Politics had kept Japan's rivals away from this promising source in the then Communist bloc. However, in many industries, the Japanese are steadily changing from imitation to innovation. Real inventions are in the offing. In keeping with this switch, the intense global R&D competition that is emerging will require companies to adopt a more integrated style of information gathering. The search for technology information must be more closely joined to competitive intelligence (CI) activities for R&D. Bird-dogging the Competition The Japanese are already out in front in this respect. Their leadership rests on a tradition of well-trained, self-disciplined, and aggressive employees who bird-dog the competition. Leading high-tech companies in the United States and the European community are well-warned that they may find themselves left at the gate if they delay response to well-focused R&D challenges from Japan. The only effective response is to devise a comparable CI system. Competitive intelligence is fully developed as part of the R&D decision process in leading Japanese firms. In their corporate pep talks, top executives emphasize that CI activities--fully exploited beyond R&D consideration--will be a key to seizing the initiative in a complete range of business activities. These executives preach this gospel wisely, because they have learned that high-tech businesses decline when CI activities get lazy. A prime example involved a manufacturer in the semiconductor D-RAM business. In 1985, Tokyo's leading daily newspaper reported that the company had decided to drop out of the 64k D-RAM market. Few competitors bothered to note this event at the time, because of this manufacturer's small and shrinking market share. But the motive behind the withdrawal was revealed in published reports (which not many competitors bothered to review). This company was switching its R&D efforts very aggressively to the next-generation 256k-bit D-RAM, a decision that assured the company of a much lower yield because of the greatly advanced technologies that were necessary. But the goal was the next generation after that--1M-bit D-RAM. This far-sighted company ploughed Y200 billion and 1200 additional researchers/engineers into this project and came out way ahead of the competition, with half the 1M D-RAM market. This company is now known as the champion of 1M D-RAM because its yield ratio, a critical factor in profit, is estimated at double the level of its competitors. CI is becoming crucial for R&D decision-making. As demonstrated by the D-RAM story, a lack of attention to trend-setting competitors can ruin a promising business. A company's alertness must apply not only to internal industry rivalries, but also to new entrants, substitutes, and bargaining power among suppliers and buyers--as pointed out by Michael Porter(1). Spurred by the famous Japanese success in achieving VCR manufacturing dominance, Japanese companies have applied major CI efforts to the anticipation of customer expectations. Because Japanese manufacturers dominated the world VCR market, Japanese videotape makers tapped key information sources on requirements for videotape quality overseas, matched these with VCR specification trends, and surpassed Western companies that had been--until then--the videotape technology leaders. …

The other Drug War: U.S.-Japan Trade in Pharmaceuticals

The Japanese pharmaceutical market is the second largest in the world, worth about $26 billion in 1985. The industry is one of the few high-technology areas in which the United States still maintains a favorable balance of trade with Japan. Today, the Japanese pharmaceutical market is experiencing a major structural reorganization as a result of both scientific breakthroughs in the development of biotechnology and government measures to liberalize trade under pressure from abroad. This reorganization process will provide many new opportunities for American and other foreign firms, but it will also bring them new challenges from increasingly competitive and internationally oriented Japanese drug companies.