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Know yourself and Know your Rivals: Here's a look at the Japanese pharmaceutical industry
Source:药事纵横
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Author:pro954f45
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Published time: 2018-03-02
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Pharmaceutical market overview in Japan
Japan is the world's third largest pharmaceutical market, behind China and the US, with total pharmaceutical sales of $78.3 billion (IMS) in 2015. Until 2012, Japan was the world's second largest pharmaceutical market, with a strong pharmaceutical industry base. Like China, Japan has many pharmaceutical companies, some of which have developed rapidly into world famous pharmaceutical companies in the past two decades, while others have died or been acquired in the past two decades.
Japan is the world's third largest pharmaceutical market, behind China and the US, with total pharmaceutical sales of $78.3 billion (IMS) in 2015. Until 2012, Japan was the world's second largest pharmaceutical market, with a strong pharmaceutical industry base. Like China, Japan has many pharmaceutical companies, some of which have developed rapidly into world famous pharmaceutical companies in the past two decades, while others have died or been acquired in the past two decades.
Global Drug Markets in Major Countries (IMS, 2015)
Source: Japan Generic Medicines Association, Huachuang Securities
Despite the reassessment, Japan remains one of the countries with the lowest use of generic drugs, with prescription volumes chronically below 60 per cent of total prescriptions, compared with less than 40 per cent before 2010. Because Of Japan's "non-acceptance" of generic drugs in the first two decades of 2010, innovative drug companies have gained momentum. Most of the local pharmaceutical giants started their business with "ME TOO" new drugs, and some of them grew rapidly into the top 50 pharmaceutical companies in the world with only one or two best-selling drugs. However, after 2000, THE FDA tightened the approval standards for ME TOO, which greatly hindered the development of Japanese pharmaceutical companies.
Proportion of Generic Drug prescriptions in Japan (%)Source: Japan Generic Medicines Association, Huachuang Securities
Japan drug market sales rank
Seizing the opportunity, Japan's pharmaceutical giants have gone global over the past 20 years, with most of their sales coming from overseas. Despite this, Japan is still the world's third largest drug market and the second largest market for innovative drugs. Japanese drug companies still have a high degree of dependence, especially those with less international ability.
Because many Multinational pharmaceutical companies in Europe and the United States use local pharmaceutical companies as agents for marketing in Japan, only Pfizer, Gilead And Merck rank among the top 10 non-local pharmaceutical companies in Japan by sales volume. In fiscal year 2016 (April 2016-March 2017), daiichi Sankyo, Takeda, Astellas, Pfizer and Gilead Were the top domestic companies by sales.
Seizing the opportunity, Japan's pharmaceutical giants have gone global over the past 20 years, with most of their sales coming from overseas. Despite this, Japan is still the world's third largest drug market and the second largest market for innovative drugs. Japanese drug companies still have a high degree of dependence, especially those with less international ability.
Because many Multinational pharmaceutical companies in Europe and the United States use local pharmaceutical companies as agents for marketing in Japan, only Pfizer, Gilead And Merck rank among the top 10 non-local pharmaceutical companies in Japan by sales volume. In fiscal year 2016 (April 2016-March 2017), daiichi Sankyo, Takeda, Astellas, Pfizer and Gilead Were the top domestic companies by sales.
Japanese Market Sales Rank (2016) [1-2]
Total sales of Pharmaceutical companies in Japan
Although Takeda, Japan's most powerful pharmaceutical company, traces its roots back more than 200 years, its true rise began in the late 1980s. Takeda has dominated the ranking of Japanese pharmaceutical companies since 2005. In 2011-2012, takeda's sales were close to the top 10 in the world, at 15,100 yen and 1,557 billion yen respectively, equivalent to 19 billion and 19.5 billion dollars at the average exchange rate of the year. But as the yen fell, Takeda began to slide in the world rankings. Takeda's sales did not grow as fast as before 2012 and declined in 2016, as patents on popular drugs lansoprazole, pantoprazole and Candesartan expired and pioglitazone caused cancer. Takeda was ranked 18th in the world in 2016, with sales of about 16 billion US dollars.
In addition to Takeda, Astellas, Daiichi Sankyo, Otsuka and Eisai are also Japan's first echelon of pharmaceutical companies. Although they are among the world's top 30 drug companies by sales, they are "younger" than Takeda - with a shorter history and less resistant to the risks of a patent cliff. After 1990s, Astellas rose rapidly through a series of star drugs, its star products include Tamloxin, Tacrolimus, Solinazine and Micarfennet. Sankyo relies on levofloxacin, omesartan and Prasugrel, Otsuka on Aripiprazole, eisai on donepezil and rabeprazole... As the patents on these "cash cows" expire, their expansion has reached a plateau.
Although Takeda, Japan's most powerful pharmaceutical company, traces its roots back more than 200 years, its true rise began in the late 1980s. Takeda has dominated the ranking of Japanese pharmaceutical companies since 2005. In 2011-2012, takeda's sales were close to the top 10 in the world, at 15,100 yen and 1,557 billion yen respectively, equivalent to 19 billion and 19.5 billion dollars at the average exchange rate of the year. But as the yen fell, Takeda began to slide in the world rankings. Takeda's sales did not grow as fast as before 2012 and declined in 2016, as patents on popular drugs lansoprazole, pantoprazole and Candesartan expired and pioglitazone caused cancer. Takeda was ranked 18th in the world in 2016, with sales of about 16 billion US dollars.
In addition to Takeda, Astellas, Daiichi Sankyo, Otsuka and Eisai are also Japan's first echelon of pharmaceutical companies. Although they are among the world's top 30 drug companies by sales, they are "younger" than Takeda - with a shorter history and less resistant to the risks of a patent cliff. After 1990s, Astellas rose rapidly through a series of star drugs, its star products include Tamloxin, Tacrolimus, Solinazine and Micarfennet. Sankyo relies on levofloxacin, omesartan and Prasugrel, Otsuka on Aripiprazole, eisai on donepezil and rabeprazole... As the patents on these "cash cows" expire, their expansion has reached a plateau.
Japan's second tier of pharmaceutical companies includes Kirin, Chinadiogo, Tanabe Mitsubishi and Sumitomo, which were once among the world's top 50 companies. China Pharma is controlled by Roche, and the pipeline of biological products research and development is very strong, especially in the field of monoclonal antibodies. Kirin is also good at biological products. A number of monoclonal antibodies in the r&d pipeline have entered the harvest stage, while Tanabe Mitsubishi has the star product Kagerazine, sumitomo has Meropenem... The third tier of Japanese pharmaceutical companies had sales of between $1bn and $3bn in 2016. Many pharmaceutical companies in this echelon also have strong research and development capabilities. Yanoyi's antiviral, Onokazu's PD-1 monoclonal antibody, Shentian's ophthalmic medication, and Changguang's transdermal patch are all well known around the world.
Many Japanese pharmaceutical enterprises, especially the second and third echelons, share a similar characteristic. Most of them started their business through the development of ME TOO products after 1990s, and quickly became rich through one or several new drugs. Within a short decade, they became one of the top 50 pharmaceutical companies in the world. But as FDA approvals for ME TOO products tightened and "cash cow" patents expired, their sales and profits began to decline. Therefore, compared with traditional pharmaceutical giants such as Pfizer and Novartis, Japanese pharmaceutical companies are mostly "rising stars" with poor ability to resist the risks of patent cliff.
Although the sales volume of the second and third echelon pharmaceutical enterprises in Japan cannot match that of the first echelon, many of them also have star products. Due to limited globalization capacity, most of the global rights of their products are licensed to pharmaceutical giants in Europe and America, so their sales volume is not high, but their profits are high. They can make a lot of money during the "cash cow" years and then expand rapidly through mergers and acquisitions around the world.
Although how to break through the "bottleneck" is the top concern of Japan's pharmaceutical giants, some small and medium-sized pharmaceutical companies are following their path. The Japanese drugmakers set to explode in the next few years are Shiono and Ono, and the cash cows that have put them in the top 50 are cold medicine Xofluza and PD-1 monoab Opdivo.
Many Japanese pharmaceutical enterprises, especially the second and third echelons, share a similar characteristic. Most of them started their business through the development of ME TOO products after 1990s, and quickly became rich through one or several new drugs. Within a short decade, they became one of the top 50 pharmaceutical companies in the world. But as FDA approvals for ME TOO products tightened and "cash cow" patents expired, their sales and profits began to decline. Therefore, compared with traditional pharmaceutical giants such as Pfizer and Novartis, Japanese pharmaceutical companies are mostly "rising stars" with poor ability to resist the risks of patent cliff.
Although the sales volume of the second and third echelon pharmaceutical enterprises in Japan cannot match that of the first echelon, many of them also have star products. Due to limited globalization capacity, most of the global rights of their products are licensed to pharmaceutical giants in Europe and America, so their sales volume is not high, but their profits are high. They can make a lot of money during the "cash cow" years and then expand rapidly through mergers and acquisitions around the world.
Although how to break through the "bottleneck" is the top concern of Japan's pharmaceutical giants, some small and medium-sized pharmaceutical companies are following their path. The Japanese drugmakers set to explode in the next few years are Shiono and Ono, and the cash cows that have put them in the top 50 are cold medicine Xofluza and PD-1 monoab Opdivo.
【1-2】Sales Ranking of Listed Pharmaceutical companies in Japan (2016) [1-2]
Don't be obsessed with Hanfang, it's just a legend
Besides Western medicine, There is Also Chinese medicine in Japan. In fact, Hanfang in Japan is not as popular as people think. The largest Hanfang company in Japan is Tsumura Pharmaceutical Co., LTD., whose output accounts for 70% of the Total of Hanfang medicines in Japan [3]. Its annual sales volume is about $1 billion, ranking 25th among the listed pharmaceutical companies in Japan. This is the only listed company focusing on Hanfang in Japan. According to the 2016 financial report of Jincun, Hanfang's products account for almost 80% of the total sales of Hanfang products in Japan [4].
Besides Western medicine, There is Also Chinese medicine in Japan. In fact, Hanfang in Japan is not as popular as people think. The largest Hanfang company in Japan is Tsumura Pharmaceutical Co., LTD., whose output accounts for 70% of the Total of Hanfang medicines in Japan [3]. Its annual sales volume is about $1 billion, ranking 25th among the listed pharmaceutical companies in Japan. This is the only listed company focusing on Hanfang in Japan. According to the 2016 financial report of Jincun, Hanfang's products account for almost 80% of the total sales of Hanfang products in Japan [4].
After Mr Tsukimura, Japan's Largest hanfang company by market share is Kracia, followed by Kobayashi and Rohto pharmaceuticals. Kracia is a non-listed company and its business scope includes cosmetics, food and Hanfang OTC. Kracia accounted for about 30 per cent of OTC's market share in 2010, with total group sales of Y91.45bn ($845m) in 2016, of which Hanfang's share is unknown. Kobayashi and Ledun respectively account for about 10% of the hanfang OTC market share, among which the sales volume of Hanfang products of Kobayashi Pharmaceutical in 2016 was 11 billion yen (about 102 million US dollars) [5], while the sales volume of Internal medicine of Ledun Pharmaceutical in 2016 was only 17.2 billion yen (about 160 million US dollars), and the proportion of Hanfang is unknown.
Market share of OTC Chinese medicines in 2010
Data sources: Nomura Research Institute, Huachuang Securities
Chinese prescription according to the above data, Japan market is about 15 - $2 billion, only about the size of the Chinese medicine market in China 1/30 to 1/20, and not only so, according to the description of the results in 2016, jin village jin village, the use of raw materials from China, 80% 15% from Japan, 5% came from Laos and other countries [4], so "Chinese prescription, Japan accounted for 90% of the international medicine market" is just a "legend", accounted for 90% of the real may be China's.
Japanese pharmaceutical companies invest in r&d
Many pharmaceutical companies in Japan started their business with innovative drugs and are facing the crisis of "cash cow" patent cliff. Therefore, Japan generally has the highest r&d investment in the world, with takeda, Daiichi Sankyo and Astela all investing about 20% in R&D. Takeda spent $4.1 billion on research and development in 2012, though it has shrunk somewhat in recent years, and remained at $2.9 billion in 2016. While $4.1 billion may not be the highest spending on r&d by a pharmaceutical giant, it compares to Apple's $3.4 billion in 2012.
Japanese pharmaceutical companies invest in r&d
Many pharmaceutical companies in Japan started their business with innovative drugs and are facing the crisis of "cash cow" patent cliff. Therefore, Japan generally has the highest r&d investment in the world, with takeda, Daiichi Sankyo and Astela all investing about 20% in R&D. Takeda spent $4.1 billion on research and development in 2012, though it has shrunk somewhat in recent years, and remained at $2.9 billion in 2016. While $4.1 billion may not be the highest spending on r&d by a pharmaceutical giant, it compares to Apple's $3.4 billion in 2012.
n 2016, Takeda, Daiichi Sankyo, Astellas, Otsuka and Eisai invested the most in R&D, respectively 2.85 billion US dollars, 1.96 billion US dollars, 1.90 billion US dollars, 1.54 billion US dollars and 1.03 billion US dollars. Their R&D investment ranking is basically consistent with their sales ranking. Companies ranked high in r&d input relative to sales included Dairen and Ono, while companies ranked low in R&D input relative to sales included Dazheng and Ledun Pharmaceuticals.
Ranking of R&d Investment of Japanese pharmaceutical Companies (2016)
With high investment and high yield, The research and development efficiency of Japanese pharmaceutical companies is also very high. The number of new drugs developed and marketed in Japan is second only to that of the United States, especially the momentum of new drug research and development in Japan in the past two decades is very strong. Many star products were developed by Japanese, such as the hypotensive drugs omeprazole, candesartan, Azisartan, lipid-lowering drugs lovastatin, anti-gastric acid drugs lansoprazole, rabeprazole, pantoprazole, nervous system drugs donepezil, aripiprazole, urinary system drugs Tanloxin, Solinazine and so on. In recent years, Japanese pharmaceutical companies have changed their thinking from Mee Too to First in class. Many well-known targets have been developed in the forefront of the world, such as PD-1, SGLT2, DPP-4, insulin receptor monoclonal antibody, Factor VIII substitute (approved product Hemlibra), etc.
Lessons from Japanese pharmaceutical companies
In recent years, the development path of Chinese pharmaceutical companies is very similar to that of Japan, and the current situation of our industry is very similar to that of Japan 20-25 years ago. Therefore, studying the current situation of Japan's pharmaceutical industry can predict the changes of China's pharmaceutical industry in the next 10-20 years. In the past 20 years, a large number of Japanese pharmaceutical companies have been merged or died, which is what Chinese pharmaceutical companies will experience in the next few years. The surviving Japanese pharmaceutical companies are basically companies with strong R&D strength, and Chinese pharmaceutical companies must also bet on R&D if they want to become bigger and stronger. For some medium-sized companies (10) in Japan, maybe their new drug research and development strength is not strong, but their technology platform can be independent, so they survived and made famous, such as the giant pharmaceutical eye drops, long light transdermal drug and so on, these drug companies also is worth to follow, and learning.
Looking at the pharmaceutical companies in Japan, few of them have reached the top 50 in the world by relying on generic drugs, and almost no large pharmaceutical companies have completely abandoned generic drugs or sold them under authorization. Even medium-sized firms that specialise in a particular therapeutic area, such as Ginseng, are selling Cosopt and Eylea instead. This diversified development strategy of Japanese pharmaceutical companies is very worthy of our reference, especially the rapid development of small and medium-sized enterprises. If we give up generics and consignment altogether, our distribution pipeline will be like a car running on a highway. Even with a great product, the cost of selling and operating is a big problem for the company.
In a word, the successful path of Japanese enterprises is very worthy of our study, but also worthy of our serious study, know yourself and know the enemy, win a hundred battles!
Friendship prompt: the article only represents the author's viewpoint, the content may not be completely correct, does not arrive the place please place, hoped everybody takes its essence to go to its dross. The data in the part of this article that does not indicate its source are all collated by pharmaceutical affairs and are strictly prohibited to be used for commercial purposes without authorization.
In recent years, the development path of Chinese pharmaceutical companies is very similar to that of Japan, and the current situation of our industry is very similar to that of Japan 20-25 years ago. Therefore, studying the current situation of Japan's pharmaceutical industry can predict the changes of China's pharmaceutical industry in the next 10-20 years. In the past 20 years, a large number of Japanese pharmaceutical companies have been merged or died, which is what Chinese pharmaceutical companies will experience in the next few years. The surviving Japanese pharmaceutical companies are basically companies with strong R&D strength, and Chinese pharmaceutical companies must also bet on R&D if they want to become bigger and stronger. For some medium-sized companies (10) in Japan, maybe their new drug research and development strength is not strong, but their technology platform can be independent, so they survived and made famous, such as the giant pharmaceutical eye drops, long light transdermal drug and so on, these drug companies also is worth to follow, and learning.
Looking at the pharmaceutical companies in Japan, few of them have reached the top 50 in the world by relying on generic drugs, and almost no large pharmaceutical companies have completely abandoned generic drugs or sold them under authorization. Even medium-sized firms that specialise in a particular therapeutic area, such as Ginseng, are selling Cosopt and Eylea instead. This diversified development strategy of Japanese pharmaceutical companies is very worthy of our reference, especially the rapid development of small and medium-sized enterprises. If we give up generics and consignment altogether, our distribution pipeline will be like a car running on a highway. Even with a great product, the cost of selling and operating is a big problem for the company.
In a word, the successful path of Japanese enterprises is very worthy of our study, but also worthy of our serious study, know yourself and know the enemy, win a hundred battles!
Friendship prompt: the article only represents the author's viewpoint, the content may not be completely correct, does not arrive the place please place, hoped everybody takes its essence to go to its dross. The data in the part of this article that does not indicate its source are all collated by pharmaceutical affairs and are strictly prohibited to be used for commercial purposes without authorization.
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