Biotechnology & Pharmaceuticals Japan

An Expert's View about Medical, Health and Cosmetics Products in Japan

Posted on: 4 Oct 2010

The UK is recognised as one of the world leaders in these sectors and Japanese companies are seeking UK companies with unique, excellent technologies and products.

Market Summary Biotechnology & Pharmaceuticals Japan Produced by Naoko Takei, Senior Commercial Dept, British Embassy Tokyo Last revised December 2009 Whereas every effort has been made to ensure that the information given herein is accurate, UK Trade & Investment or its sponsoring Departments, the Departments of Trade & Industry and Foreign & Commonwealth Office, accept no responsibility for any errors, omissions or misleading statements in that www.uktradeinvest.gov.uk Country ? Sector information and no warranty is given or responsibility is accepted as to the standing of any firm, company or individual mentioned. Table of Contents OVERVIEW.................................................................................................................................. 3 CHARACTERISTICS OF MARKET................................................................................................. 3 (1) THE JAPANESE PHARMACEUTICAL MARKET SIZE................................................................. 3 (2) MARKET STRUCTURE AND PARTICIPANTS OF THE JAPANESE PHARMACEUTICALS MARKET ................ 4 (3) JAPANESE BIO-MARKET.............................................................................................. 5 (4) REVISED PHARMACEUTICALS AFFAIRS LAW (PAL)............................................................. 6 (5) REGULATORY REVIEW OF PHARMACEUTICAL PRODCUTS ....................................................... 6 OPPORTUNITIES ........................................................................................................................ 6 KEY METHODS OF DOING BUSINESS ......................................................................................... 7 PUBLICATIONS (USEFUL WEBSITES)......................................................................................... 7 MORE DETAILED SECTOR REPORTS........................................................................................... 8 EVENTS....................................................................................................................................... 8 CONTACT LISTS.......................................................................................................................... 9 www.uktradeinvest.gov.uk Page 2 of 10 Country ? Sector OVERVIEW The Japanese pharmaceutical market is the second largest in the world (15.1%) with sales of over US$ 66.4 billion (£35.0 billion) during Nov 2007 - Oct 2008. UK is the largest exporter of pharmaceuticals to Japan in 2007 (20.5% of the total Japanese pharmaceuticals imports) followed by Switzerland and US. The market share of foreign pharma companies is estimated to be 30-40% in recent years. The estimated market size of the Japanese bio industry in 2008 was about £14.6 billion. Of which, 82% was for products utilising genetic engineering (market size of genetically modified crops are dominant), cell fusion and cell culture, 18 % for bio-related products and services. According to a survey by the Japan Bioindustry Association (JBA), the number of Japanese biotech companies stood at 577 in 2007. Demand for joint development, outsourcing of R&D, clinical trials, regulatory affairs in Europe and manufacturing of active ingredients and biologics etc. continues to increase. Most opportunities will be in drug development such as antibody drugs and bio/pharmaceuticals related devices/equipment/services. CHARACTERISTICS OF MARKET (1) THE JAPANESE PHARMACEUTICAL MARKET SIZE It is estimated that pharmaceutical costs in Japan accounted for approximately 20% of healthcare expenditure in recent years. Japanese pharmaceutical market is the second largest in the world (15.1%) with sales of over £35.0 billion during Nov 2007- Oct 2008 (Source: IMS Health). The market is almost as large as the markets of Germany and France combined. Biopharmaceuticals including antibody drugs showed the largest increase in 2008, 8.9% compared to the previous year. Total domestic production of Japanese pharmaceuticals in 2007 was 6,452 billion yen. Imports and exports of drugs in 2007 were 1,708 billion yen and 144 billion yen respectively. Therefore, the calculated market size (production plus imports minus exports) is 8,016 billion yen (£34.0 billion) in 2007. Of the domestic production, 90% was for ethical drugs and 10% for OTC and others. Among the ethical drug market, consumption of generic drugs in Japan is still lower than in Western countries. According to a survey by the Japan Generic Medicines Association, the market for generic drugs was 6.2 % (value) and 17.2 %(volume) of the total ethical market in FY2007. Ministry of Health, Labour and Welfare (MHLW) set up Action Programme to promote prescription of generic drugs and aims to increase the share of generics drugs to 30% (volume basis) by 2012. Major overseas generics manufacturers including Teva (Israel), Zydus, Lupin (India) have entered into the Japanese market in recent years. Teva and Kowa, a middle sized Japanese pharma company, established a joint venture called Teva-Kowa Pharma in 2008, aiming to take 10% share of the generic market in Japan by 2015. Looking at domestic drug production by disease in 2007, cardiovascular drugs had the largest production value, followed by other metabolic drugs, CNS drugs and gastrointestinal drugs. Drug production by disease category in 2007 as percentage is shown below; www.uktradeinvest.gov.uk Page 3 of 10 Country ? Sector Drug Production by Disease Category in 2007 (value) % Cardiovascular Preparation 21.5 Other Metabolic Disorders 9.6 Central Nervous System 9.1 Digestive System 8.9 Haematological Drugs 5.8 Dermatologic Preparation 5.5 Antibiotics 4.6 Biological Products 4.2 Allergic Diseases 3.6 Vitamins 3.3 Others 23.9 (2) MARKET STRUCTURE AND PARTICIPANTS OF THE JAPANESE PHARMACEUTICALS MARKET The pharmaceutical sector is one of the few high technology sectors in which Japan runs a trade deficit. Imports have outstripped exports by more than ten times in 2007. UK was the largest exporter of pharmaceuticals to Japan in 2007 (20.5% of the total pharmaceuticals imports) followed by Switzerland (15.3%) and US (14.2%). The presence of foreign pharmaceutical companies has been growing in Japan. The market share of foreign pharmaceutical companies is estimated to be 30-40% in recent years. The table below shows the top 5 pharmaceutical companies of ethical drugs in the Japanese market. Other major Japanese pharma companies are Eisai, Dainippon Sumitomo, Shionogi, Otsuka, etc. Novartis, Pfizer, Banyu under Merck, Sanofi-Aventis, GlaxoSmithKline (GSK) and AstraZeneca (AZ) are estimated to be ranked between 6th and 20th (N.B. GSK and AZ were ranked at 9th and 12th in 2007 respectively). Market share of Japanese Top 5 pharmaceutical companies (based on shipment of ethical drugs only) in FY 2008 Rank Company Market share (%) URL 1 Takeda 7.9 www.takeda.co.jp 2 Astellas 7.1 www.astellas.com 3 Daiichi-Sankyo 6.0 www.daiichisankyho.co.jp 4 Mitsubishi Tanabe 4.8 www.mt-pharma.co.jp 5 Chugai under Roche group 4.4 www.chugai-pharm.co.jp Source: IMS Japan, Nikkei Sangyo Newspaper www.uktradeinvest.gov.uk Page 4 of 10 Country ? Sector Major changes among domestic and/or foreign companies have started as below. Further restructuring in the Japanese pharma market is expected. 2001: Chugai Pharmaceuticals became a group company of Roche 2002: Taisho Pharma (top ranked OTC company) and Toyama Chemical (medium sized pharma company) established a joint sales company 2005: (a) Yamanouchi and Fujisawa merged into Astellas Pharma. (b) Sumitomo Pharma and Dainippon Pharma merged into Dainippon Sumitomo Pharma. (c) Grelan and Teikoku Zoki merged into Aska Pharma. 2007: (a) Sankyo and Daiichi Pharma merged into Daiichi-Sankyo. (b) Mitsubishi Welpharma and Tanabe merged into Mitsubishi Tanabe Pharma. 2008: (a) FujiFilm acquired Toyama Chemical. (b) Pharma Divisions of Kirin and Kyowa Hakko merged into Kyowa Hakko-Kirin Recently major Japanese pharma companies have actively acquired bio companies in US and Europe to enhance R&D capabilities especially in oncology/antibody drug areas. Some examples are: - Takeda acquired Paradigm Therapeutics (UK) in 2007, Millennium (US) and Amgen Japan in 2008 - Eisai acquired Morphotek(US) and MGI Pharma (US) in 2007 - Astellas acquired Agensys (US) in 2007 - Daiichi-Sankyo acquired U3 Pharma (Germany) in 2008 In October 2009, Shionogi entered into an agreement with the UK on the formation of an international network for industry-academic collaboration in R&D. Recently there were several acquisitions of overseas pharma companies by Japanese major players. Daiichi-Sankyo purchased Ranbaxy Laboratories, India?s largest pharma company, in June 2008, aiming to develop sales in emerging countries and the generics market. Shionogi acquired Sciele Pharma (US) in 2008 to establish their own sales network in US, and Dainippon Sumitomo purchased Sepracore in US in 2009 to enter the US market. (3) JAPANESE BIO-MARKET The estimated market size of the Japanese bio industry in 2008 was about £14.6 billion. Of which, 82% was for products utilising genetic engineering (market size of genetically modified crops are dominant), cell fusion and cell culture. As for drugs, genetic engineered Erythropoietin (EPO), insulin and antibody drugs were major products. Especially antibody drugs showed almost 60% growth from 2007. The remaining 18% was for bio-related products and services (instruments, reagents, bioinformatics, etc. (Source: Nikkei Bio-Yearbook 2009) According to a JBA (Japan Bioindustry Association) survey, there were 577 biotechnology SMEs in 2007, a number which has been steadily increasing over the past 10 years. Of which, 208 firms are in drug discovery/diagnostics business. Its percentage in the total bio venture companies is lower than those in US/European countries, and very limited companies conduct phase III, which means that Japanese bio companies are still in the early stage. By the end of 2007, 17 bio venture companies are listed on TSE Mothers, etc. www.uktradeinvest.gov.uk Page 5 of 10 Country ? Sector (4) REVISED PHARMACEUTICALS AFFAIRS LAW (PAL) The revised PAL has been effected since April 2005. The new rules have created a shift from a system focused on manufacturing to one similar to those operating in Europe and the US, centred on marketing with an emphasis on post-marketing safety measures. Under the old PAL, two licences and one manufacturing approval were required for a drug to be approved and its manufacture to proceed. The revision has split the old manufacturing business license into a ?manufacturing/marketing business license? and a ?manufacturing business license?. Under the revised PAL, companies are no longer required to establish their own satisfactory quality control system to undertake their own manufacturing; the revision makes it possible to commission external manufactures to undertake all production. However, the manufacturing/marketing company remains responsible for its products and must establish a system to manage and guarantee GMP in the contractor?s factories. The revision is expected to make pharmaceutical companies more active in seeking outsourcing, as well as making their manufacturing divisions independent. It also makes it easier for venture companies to enter the market, since they are no longer obliged to own manufacturing facilities. (5) REGULATORY REVIEW OF PHARMACEUTICAL PRODCUTS PMDA (Pharmaceuticals and Medical Devices Agency) under MHLW has taken important steps to increase its capacity, and also proposed a number of measurements to solve the drug-lag between Japan and other markets by 2011. According to a survey, currently there is a 4 year delay for registration compared with the US so that MHLW aims to shorten the period from current 4 years to 1.5 years. The number of consultations with PMDA is expected to increase further and the development of bio-related drugs, cell therapies, vaccines and international clinical trials are on the rise. OPPORTUNITIES The UK is recognised as one of the world leaders in these sectors and Japanese companies are seeking UK companies with unique, excellent technologies and products. Demand for joint development, outsourcing of R&D, clinical trials, consultation of regulatory affairs in Europe and manufacturing of active ingredients and biologics etc. continue to increase. Most opportunities will be in drug development such as anticancer drugs, antibody medicines and bio/pharmaceuticals related devices/equipment/services. www.uktradeinvest.gov.uk Page 6 of 10 Country ? Sector KEY METHODS OF DOING BUSINESS Despite what some books say about the uniqueness of Japan, there is nothing mystical about doing business in this country. Business is business here as elsewhere, and increasingly cosmopolitan. So you need not worry unduly about the niceties of Japanese etiquette. But a few general points are worth remembering: Above all, be patient. Do not expect quick returns. They may come. But for many Japanese companies, the emphasis is more on developing the sort of trust and mutual confidence that will lead to a strong, enduring relationship than on getting down to business instantly. This is why Japan is a market requiring a strategic approach rather than an opportunistic one. It is also why the potential for long-term achievement is so great. Compared to other Japanese industries, people in this sector speak English relatively well. However, take things slowly. Many Japanese are too polite to let you know when they do not fully understand. Keep what you say simple and straightforward. The same is true if an interpreter is used. PUBLICATIONS (USEFUL WEBSITES) (1) Useful URLs related to biotechnology and pharmaceuticals Ministry of Health, Labour and Welfare (MHLW: www.mhlw.go.jp) Some statistics are obtained. Several links to relevant organisations. Japanese Pharmaceuticals and Medical Devices Agency (PMDA: http://www.pmda.go.jp/english/index.html) Japanese regulatory agency, working together with MHLW. Japan Pharmaceutical Manufacturers Association (JPMA: www. jpma.or.jp/) JPMA?s activities are obtained. Links to member companies and relevant information. Japan Bioindustry Association (JBA: www.jba.or.jp/) JBA?s activities are obtained. Links to member companies and relevant information. (2) General information JETRO (www.jetro.go.jp/top/index.html) Japan External Trade Organisation - Japanese Govt site Information on investing Japan, business opportunities, market information, statistics & surveys are obtained. Useful market reports on the bio/pharma sector can be downloaded (see MORE DETAILED SECTOR REPORTS) . UKNOW (www.uknow.or.jp/uk_now/index_e.html) British Embassy (and others) site in Japan Keidanren (www.keidanren.or.jp/index.html) Japan Federation of Economic Organisations www.uktradeinvest.gov.uk Page 7 of 10 Country ? Sector Toyo Keizai Inc (www.toyokeizai.co.jp/english/e_link/index.html) Japan Company Handbook EU-Japan Centre (www.eujapan.com/europe/home.html) EU-Japan industrial co-operation Nikkei (www.nni.nikkei.co.jp/) Leading Japanese economic data Japan Tariff Association (www.kanzei.or.jp/english/index.html) Some free services, but membership fee for details Ministry of Economy, Trade and Industry (www.meti.go.jp) Some statistics are available. Several links to relevant organisations. Industrial Bank of Japan (www.ibjs.co.jp/e/res_links/index.html) Several links to other directories of Japanese companies All the above URLs open English language pages; some sites have Japanese pages as well. MORE DETAILED SECTOR REPORTS The following reports can be downloaded on JETRO?s URL below; Attractive Sectors: Medical Care (Oct 2009) http://www.jetro.go.jp/en/invest/attract/medical/medical.pdf Attractive Sectors for Investing in Japan: Biotechnology (Oct 2007) http://www.jetro.go.jp/en/market/attract/biotechnology/bio.pdf EVENTS Bio/Pharma Mission to Japan Organisers: UK Trade & Investment, British Embassy Tokyo and British Consulate General- Osaka Dates: October 2010 UK Trade & Investment recruits UK companies coming to Japan on the mission. Seminars followed by networking receptions both in Tokyo and Osaka will take place. Contact: Mina Joshi, Sector Manager, Asia & USA, ISG-Biotech & Pharmaceuticals, UK Trade & Investment Tel: 01223-484670, mina.joshi@uktibiotech.org.uk CPhI Japan 2010 (http://www.cphijapan.com/eng/index.html) Dates: 21-23 April 2010 Organisers: UBM Japan Co Ltd, The Chemical Daily Co Ltd Venue: Tokyo Big Sight (Tokyo) CPhI is a tradeshow for outsourced manufacturing of pharmaceutical/agrochemicals ingredients, specialty chemicals and allied industries. UK companies have exhibited at the UK Pavilion in recent years, which was organised by CIA (Chemical Industry Association) Contact: Neil Harvey of CIA (tel: 020-7963-6767, HarveyN@cia.org.uk) www.uktradeinvest.gov.uk Page 8 of 10 Country ? Sector BioExpo 2010 (www.bio-expo.jp/) Dates: 30 June- 2 July 2010 Organier: Reed Exhibitions Venue: Tokyo Big Sight (Tokyo) Interphex Japan (exhibition for pharmaceutical, cosmetic and detergent R&D and manufacturing technology) and API (exhibition for manufacturing of pharmaceutical intermediates), will take place coincidently with BioExpo. BioJapan 2010 (http://expo.nikkeibp.co.jp/biojapan/eng/index.html) Organiser: Nikkei BP supported by Japan Bioindustry Association (JBA) Dates: 29 September ? 1 October 2010 Venue: Pacifico Yokohama (Yokohama) CONTACT LISTS Japanese Pharmaceuticals and Medical Devices Agency (PMDA) (http://www.pmda.go.jp/english/index.html) Address: Shin-Kasumigaseki Building, 3-3-2 Kasumigaseki, Chiyoda-ku, Tokyo, Japan 100- 0013 Tel: +81 (0)3 3506 9456, Fax: +81 (0)3 3506 9461 E-mail: info.pmda.f10@pmda.go.jp Japan Pharmaceutical Manufacturers Association (JPMA) (www. jpma.or.jp/) Address: Torii Nihonbashi Bldg., 3-4-1 Nihonbashi-Honcho, Chuo-ku, Tokyo, Japan 103-0023 Tel: +81 (0)3 3241 0326, Fax: +81 (0)3 3242 1767 Japan Bioindustry Association (JBA) (www.jba.or.jp/) Address: Grande Bldg. 8F, 2-26-9 Hatchobori, Chuo-ku, Tokyo, Japan 104-0032, Tel: +81 (0)3 5541 2731, Fax: +81-3-5541-2737 Email: secretary@jba.or.jp The British Embassy, Tokyo 1 Ichibancho, Chiyoda-ku, Tokyo, Japan 102-8381 Tel: +81 (0)3 5211 1100, Fax:+81 (0)3 3265 5580 Contact: Naoko Takei, Senior Commercial Officer E-mail: naoko.takei@fco.gov.uk www.uktradeinvest.gov.uk Page 9 of 10 Country ? Sector The British Consulate General, Osaka Address: Epson Osaka Bldg 19F, 3-5-1, Bakuro-machi, Chuo-ku, Osaka, Japan 541 0059 Tel: +81 (0)6 6120 1616, Fax:+81 (0)6 6281 1731 Contact: Hitomi Nakai, Senior Commercial Officer E-mail: hitomi.nakai@fco.gov.uk Biotechnology and Pharmaceuticals Team/International Sector Group, UK Trade & Investment Address: The Business Centre, Station Road, Histon, Cambridgeshire CB4 9LQ Tel: 01223 484 670, Fax:01223 200 853 Contact: Mina Joshi, Sector Manager Anil Vaidya, Healthcare & Biotechnology Specialist E-mail: mina.joshi@uktibiotech.org.uk avaidya@dial.pipex.com Canada and Japan Unit, UK Trade & Investment Address: Kingsgate House, 66-74 Victoria Street, London SW1V6SW Tel: 020 7215 4750, Fax:020 7828 8313 Japan Contact: Wendy Hurst (for general trade missions) E-mail: wendy.hurst@uktradeinvest.gov.uk www.uktradeinvest.gov.uk Page 10 of 10
Posted: 04 October 2010

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