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2018-04-The-Pharmaceuticals-Industry-In-Japan-Jackson-Eubij.Pdf www.EUbusinessinJapan.eu The pharmaceuticals industry in Japan: current trends and emerging business opportunities for EU-based small- and medium-sized enterprises March 2018 Professor Dr Keith Jackson EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - Head office in Japan EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - OFFICE in the EU Shirokane-Takanawa Station bldg 4F Rue Marie de Bourgogne, 52/2 1-27-6 Shirokane, Minato-ku, Tokyo 108-0072, JAPAN B-1000 Brussels, BELGIUM Tel: +81 3 6408 0281 - Fax: +81 3 6408 0283 - [email protected] Tel : +32 2 282 0040 –Fax : +32 2 282 0045 - [email protected] http://www.eu-japan.eu / http://www.EUbusinessinJapan.eu / http://www.een-japan.eu www.EUbusinessinJapan.eu Contents 1 Introduction ................................................................................................................................................................. 7 1.1 Regulatory environment ................................................................................................................................... 9 1.2 Demographic shift ........................................................................................................................................... 10 1.3 Emerging business opportunities for European SMEs .................................................................................... 10 1.4 The structure of this Report: key questions .................................................................................................... 11 2 The structure and development of the pharmaceuticals industry in Japan .............................................................. 13 2.1 The pharmaceuticals industry: a global perspective ...................................................................................... 13 Figure #1: Pharmaceuticals (drugs) manufacturing depicted as a value chain. ........................................................ 14 2.2 The pharmaceuticals industry in Japan: a brief history .................................................................................. 14 2.3 Enduring and emerging structures of Japan’s pharmaceuticals industry ....................................................... 17 2.4 Roles of SMEs .................................................................................................................................................. 18 Box #1: Patterns of development in the Japanese pharmaceuticals industry: antibiotics ........................................ 20 3 The pharmaceuticals industry in Japan: strategic business environment ................................................................. 22 3.1 Environmental scanning .................................................................................................................................. 22 3.2 Demographic factors ....................................................................................................................................... 23 3.3 Ethical factors .................................................................................................................................................. 23 3.4 Legal factors .................................................................................................................................................... 24 Box #2: The patenting system in Japan...................................................................................................................... 26 3.5 Political factors ................................................................................................................................................ 26 Box #3: National health insurance systems in Japan ................................................................................................. 28 3.6 Ecological factors ............................................................................................................................................ 30 Box #4: Mortality, health and happiness in Japan ..................................................................................................... 30 3.7 Economic factors ............................................................................................................................................. 31 Box #5: The pricing system for pharmaceutical products in Japan ........................................................................... 33 3.8 Technological factors ...................................................................................................................................... 34 Box #6: Consumer behaviour and the ‘Country of Origin’ effect in Japan ................................................................ 36 3.9 Social-cultural factors...................................................................................................................................... 37 3.9.1 Keiretsu-style strategic thinking ............................................................................................................. 38 Box #7: Community and communication in Japanese society ................................................................................... 39 EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - Head office in Japan EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION - OFFICE in the EU Shirokane-Takanawa Station bldg 4F Rue Marie de Bourgogne, 52/2 1-27-6 Shirokane, Minato-ku, Tokyo 108-0072, JAPAN B-1000 Brussels, BELGIUM Tel: +81 3 6408 0281 - Fax: +81 3 6408 0283 - [email protected] Tel : +32 2 282 0040 –Fax : +32 2 282 0045 - [email protected] http://www.eu-japan.eu / http://www.EUbusinessinJapan.eu / http://www.een-japan.eu www.EUbusinessinJapan.eu 3.9.2 Styles of business communication and relationship-building................................................................. 40 Box #8: The development of the Japanese pharmaceuticals industry in four products. .......................................... 41 4 How open are Japanese markets to non-Japanese companies? ............................................................................... 43 Figure #2: Porter’s FIVE FORCES model ..................................................................................................................... 43 4.1 Assessing ease of entry to Japanese markets: a ‘Five Forces’ model ............................................................. 43 4.2 Major barriers to market entry: institutions ................................................................................................... 46 Box #9: Regulatory systems in Japan ......................................................................................................................... 47 4.3 Major barriers to market entry: medical practitioner networks .................................................................... 48 Box #10: Roles of medical doctors in the promotion and distribution of drugs ....................................................... 49 5 Section 5: Interviews .................................................................................................................................................. 50 6 Case studies of successful entry to Japanese markets .............................................................................................. 55 6.1 Early-stage entry as a specialist R&D company .............................................................................................. 55 6.2 Mid-stage entry as partner to another European SME already established in Japan .................................... 55 6.3 Late-stage development: improving an existing market position in Japan .................................................... 55 7 Conclusions and practical recommendations to EU-based SMEs seeking to enter Japanese markets for pharmaceutical products and services ...................................................................................................................... 56 7.1 Trends impacting the global pharmaceuticals industry ………………………………………………………………………………….57 7.2 Trends impacting the Japanese pharmaceuticals industry ……………………………………………………………………………. 58 7.3 Practical recommendations to EU-based SMEs ……………………………………………………………………………………………. 59 8 Appendices................................................................................................................................................................. 61 9 References ................................................................................................................................................................. 65 EU-Japan Centre for Industrial Cooperation 3 www.EUbusinessinJapan.eu List of abbreviations used in this Report: AI: Artificial Intelligence ALT: Automated Laboratory Tests BOJ: Bank of Japan FDA: Food and Drug Administration (United States of America) FDI: Foreign Direct Investment GDP: Gross Domestic Product IPR: Intellectual Property Rights IT: Information Technology JIT: Just-In-Time inventory management system, one of the fundamental techniques for controlling wastage, costs and efficiency associated with the Toyota Production System (TPS – see below) JPMA: Japanese Pharmaceutical Manufacturers Association K.K: kabushiki kaisha (Japanese), variously translated into English as ‘Co., Ltd.’, ‘Corporation’, ‘Incorporated’ (Inc.) or as ‘joint stock corporation’. The K.K. is the most widely utilized form of legal incorporation in Japan. M&A: Merger and Acquisition METI: Ministry of Economy, Trade and Industry (Japan) MD: Medical Doctor MHLW: Ministry of Health, Labour and Welfare
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