New Healthcare market report from Business Monitor International: "Japan Pharmaceuticals & Healthcare Report Q1 2014"
Boston, MA -- (SBWIRE) -- 12/26/2013 -- High overall and per-capita pharmaceutical expenditures, an ageing population, strong patent respect and a generally stable economic and political environment make Japan highly attractive to pharmaceutical investors. However, a downside risk to this trend is its shrinking population, limiting growth potential not just in the pharmaceutical sector, but the economy overall. Headline Expenditure Projections
- Pharmaceuticals: JPY10,338.7bn (US$129.5bn) in 2012 to JPY10,992.8bn (US$112.2bn) in 2013; +6.3% in local currency terms and -13.4% in US dollar terms. Forecast slightly upgraded from Q413 due to a small increase in GDP growth projected by BMI's Country Risk team, growth in US terms down due to currency fluctuations.
- Healthcare: JPY43,863.2bn (US$549.3bn) in 2012 to JPY44,824.2bn (US$457.4bn) in 2013; +2.2% in local currency terms and -16.7% in US dollar terms. Forecast is broadly in line with Q413, US growth is down due to currency fluctuations.
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Japan's Pharmaceutical Risk/Reward Rating (RRR) score for Q114 is 74.5 out of the maximum 100 in our newly improved RRR system. This high score makes Japan the most attractive country in comparison with the other 18 key Asia Pacific markets. While we highlight low growth potential over the long term, Japan's ageing and affluent population will continue to boost pharmaceutical spending. Meanwhile, the country offers few risks to investors, given its low corruption rate and lack of bureaucracy.
Key Trends And Developments
In October 2013, Swiss drugmaker Novartis overhauled the management structure of its Japanese unit. The move coincided with sanctioning numerous members of staff following a scandal that saw data for the Diovan clinical property manipulated to improve the drug's regulatory prospects. The sanctions include a 30% pay cut for two executives, in addition to the departure of the head of the firm's Japanese unit In September 2013, Japan's Ministry of Health, Labour and Welfare released preliminary estimates for healthcare spending in fiscal 2012. In FY2012 (April 1 2011 to March 31 2012), the ministry stated that hospitals and clinics across Japan earned JPY38.2trn (US$386bn), an average of JPY300,000 (US$3,034) per person. This was -1.7% more than the previous year, making it the 10th straight year of the industry's expansion. Approximately 95% of health expenditure was reimbursed by National Health Insurance.
In August 2013, Japan-based Mitsubishi Tanabe Pharma announced that its subsidiary in China, Tianjin Tanabe Seiyaku, will construct a new JPY1.9bn (US$19.5mn) production facility in the country. The new facility is expected to start operating in 2016. Aside from this planned facility, the firm has other operations in China, including a production site and two sales offices in Guangzhou and a research and development (R&D) facility in Beijing.
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