Japan’s Rise and Remain

Words by Cheyenne Eugene

For decades, Japan has asserted itself among the top three nations within the global pharmaceutical industry, following closely behind the USA and China. The country evokes historical imagery of geishas and Emperors, alongside the dazzling modernisation of its capital, the bustling Tokyo, where you will find Japan’s pharma-powers: Takeda, Daiichi Sankyo, and Astellas.

“Japan is the second largest branded pharmaceutical market,” states Alan Thomas, Director, Thought Leadership, IQVIA Japan Group. “Positive Japanese government policy and initiatives encourage and reward investment.” Government-led initiatives focus strikingly on research and development, with Thomas outlining: “The Sakigake system expanded inclusion of Japan in global clinical trials and consultation services to support clinical trial design and data requirements.”

A culture of collaboration has also been key to Japan’s global success. “A free and open attitude allows our scientists to share skills, build knowledge, and work together,” says Sunao Manabe, Representative Director, President and CEO, Daiichi Sankyo. “This has been pivotal to further advancing our cutting-edge science and technology.”

While their strategies have triumphed, an increasing geriatric population and decreasing birth-rates have created complications that must be addressed. “A future roadblock to innovation is the potential strain on healthcare funding, including for pharmaceuticals, which is an easy target for funding reform in Japan and other markets globally,” says Thomas. Manabe speculates further: “Given the anticipated tightening of the healthcare budget, the market as a whole is expected to remain flat or slightly negative in growth as the reduction of National Health Insurance drug prices intensify.”

Cuts to pharma’s funding may be intuitive from a perspective of financial conservatism, however there is evidence that if healthcare and pharma work harmoniously together like a well-oiled bullet train, their symbiosis could save on long-term costs. “Immediate pharmaceutical intervention may reduce the need for longer-term non drug-related healthcare intervention, hospitalisation, surgical intervention, long-term care, and the nursing care burden, which will ultimately save on costs. This is particularly true in a number of specialty areas, including oncology, where patient populations and disease prevalence are increasing,” says Thomas.

So, will funding strains impede Japan’s reputation for innovation? Shifting drug prices could endanger partnerships, the unions becoming less appealing to outside investors. “We may see a shift in investment decisions in R&D in some disease areas,” says Thomas. “Because of this, innovation may be slowed and could result in under-served medical needs across some therapy areas,” he warns. Manabe seconds this: “If research is only sourced within Japan, it will become increasingly difficult to continuously develop innovative medicines.”

If research is only sourced within Japan, it will become increasingly difficult to continuously develop innovative medicines

While these risks must be monitored, Manabe predicts: “Innovative medicines, particularly those that treat cancer, are expected to keep growing in the future.” With Thomas corroborating: “True innovation will continue to be rewarded.” It is crucial that despite some funding hurdles, Japan is intent on reassuring concerned investors and enticing new ones.

Japan is a country steeped in culture that is a valuable contributor to global pharma and world health. A financially restrictive climate poses a considerable challenge to maintaining investor appeal in certain therapeutic areas, however Japan’s focus remains firmly on innovation. Right now, the seas may appear choppy, but Japan already has the wind in its sails and a history of successes on its side.