Funny that some U.S. pharma companies are eyeing Japan as a growth market, considering that Japanese drugmakers are looking to grow everywhere but home. As the Financial Times points out today, the Japanese health ministry has been pushing drug prices downward for some 20 years now. Every other year, drugmakers are required not just to minimize price increases--or even to keep prices constant--but to cut them. Plus, the government has grown notorious for its zealous promotion of generic meds. The result? Japan's share of the global pharma market is now 10 percent, down from 22 percent in the 1990s.
Japanese pharma has been snapping up companies outside its home base, including Millennium Pharmaceuticals (bought by Takeda) and Ranbaxy Laboratories (bought by Daiichi Sankyo). And Japanese drugmakers have been inking development deals outside Japan as well; just think of this week's obesity-drug pact with Amylin Pharmaceuticals.
But meanwhile, Western drugmakers have been working their way into Japan's drug market. The most recent example: Eli Lilly plans to staff up in Japan even as it lays off thousands in the U.S.
Maybe there's a win-win situation for both sides. The FT contends that Japanese companies have "an exceptional history" of discovering new meds, but aren't so good at maximizing sales overseas. U.S. drugmakers are marketing whiz kids. Sounds like a match made in pharma heaven, no?
And indeed, some Japanese-American marketing partnerships are already working. The Bristol-Myers blockbuster antipsychotic Abilify, for example, was discovered by Japan's Otsuka Pharmaceutical; the two companies recently extended their promotional partnership on that drug through 2015. In buying U.S.-based Sepracor, Dainippon Sumitomo got access to the former's 1,200-strong sales force and now plans to leverage those reps into big sales of a prospective schizophrenia treatment.
- see the FT piece
ALSO: Astellas Pharma, Japan's No.2 drugmaker, cut its outlook further below market expectations as tough competition from generic drugmakers, the yen's strength and R&D costs took their toll. Report