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Given your expertise, how would you asses the present state of the Japanese market?
At present, the pharma industry in Japan is facing a challenging situation. Japan has a rapidly aging population and a National Health Insurance Scheme in place, which means healthcare costs for the Government are high and as such, there is significant pressure on product pricing and revenues.A key focus is on reducing costs while continuing to provide quality healthcare to anyone insured under the NHI scheme. This is a challenge when we see that both Quality Assurance and Quality Control costs are increasing significantly which squeezes margins and affects profitability for Pharma Industry
What are the opportunities for both domestic and international players?
Japan is a unique market where there are now more opportunities than ever for international players. As there is an emphasis on quality products, the market is highly regulated, and this has been a challenge for international suppliers to adapt to in the past. However, the system for quicker and more efficient drug approvals mean that international companies are willing to invest more funds and resources if it means they can bring their products to the market sooner. Additionally, the recent incentives for generic products means that manufacturers now have a large, untapped market that they can capitalise on.
What are the obstacles in the region that market entrants should be aware of?
The biggest barrier for any market entrant from outside Japan is the language. For any product to be registered, the licensing documents need to be in Japanese. For this, the company needs to appoint a ICC (In-Country Caretaker) to take care of the documentation, or otherwise they will need a Japanese subsidiary company – and this is too expensive to be feasible in many cases.
What are the opportunities for growth over the next 10 years?
The biggest opportunity for growth is exports. For most Japanese companies, globalization has been the key challenge but there is scope to increase exports to other Asian countries – China, Thailand, Vietnam and others. Another factor is that there has always been long standing emphasis on developing patents and new drugs – , but due to incentives, there is now a significant amount of generic and biosimilar products on the market, and I would expect manufacturing in this sector to increase.