Japan Pharmaceutical Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Japan Pharmaceutical Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Japanese pharmaceutical market is expected to grow at a CAGR of 1.06% during the forecast period, 2022-2027.

The rising COVID-19 cases across the globe are having a profound positive impact on Japanese pharmaceuticals. Most pharmaceutical and biotechnological companies are focusing their R&D departments on identifying new molecules or leads for the treatment of this disease, which is in the final phase of clinical trials.​The government in this region is further supporting those clinical trials by granting funds and incentives to the pharmaceutical companies. In January 2021, AstraZeneca PLC applied for approval in Japan for its COVID-19 vaccine, and the Japanese government May 2021 signed a contract to procure 120 million doses of the AstraZeneca vaccine, enough for 60 million people. These developments in the pharmaceuticals market in the country during the Covid-19 pandemic are anticipated to have a significant impact on the market studied.

Factors such as the rising geriatric population and rising incidence of chronic diseases coupled with increasing research and development (R&D) investments in the country are expected to drive the studied market growth in Japan.

According to an article titled “Japan’s Older Population Hits Record High” published in September 2021, the estimated number of people aged 65 years or older in Japan stood at a recording high of 36.4 million, an increase of 220,000 from a year before. Older men totaled 15.83 million, or 26% of the male population. There were 20.57 million elderly women or 32% of the female population. These figures were expected to rise as high as 35.3% in 2040. Such an increase in the geriatric population is expected to drive the growth of the market as the geriatric population is prone to chronic diseases which further increases the demand for the development of drugs and medicines along with other pharmaceutical products. Thereby, the growing geriatric population is expected to drive the growth of the market studied in the country. Additionally, the total pharmaceutical spending in Japan was USD 954 per capita which is 20.7% of health spending as per the data accessed by the Organization for Economic Co-operation and Development (OECD) in July 2022. Thus, the increasing pharmaceutical spending in the country is anticipated to drive the pharmaceutical market growth in the country.

In Japan, two crucial regulatory bodies review and approve drugs and medical devices, namely the Pharmaceuticals and Medical Devices Agency (PMDA), and the Ministry of Health, Labor, and Welfare (MHLW). To ensure the safety and efficacy of the authorized biologics or pharmaceuticals in Japan the regulatory committees engage in monitoring and surveillance. According to the article “The Drug Approval Process In Japan” published in April 2021 the drug approval process in Japan is less complex and easy compared to some other countries, and the PMDA along with regulatory aspects provides consultation to sponsors to help them understand the requirements and the stepwise drug approval process, which makes many manufacturers choose Japan as their drug market. Hence, this is accelerating the pharmaceutical market in Japan.

Moreover, the increasing investments and advances in the field of pharmaceuticals are increasing in the country. This is anticipated to drive market growth. For instance, in May 2022, ExoCoBio Inc. received a Japanese patent that claims that stem cell-derived exosome is proven as an effective ingredient for alleviating dermatitis. The patent is the result of the vigorous R&D efforts made to develop therapeutic medicines with higher efficacy and safety than currently known ones for dermatitis with itching and inflammation. Thus, such developments are anticipated to drive market growth in Japan. Therefore, the aforesaid factors are expected to contribute to the growth of the Japanese pharmaceutical market. However, stringent regulatory systems for several products might hamper the market growth over the analysis period.

Key Market TrendsPrescription Drugs Segment is Expected to Hold a Significant Share in the Market Over Forecast Period

The prescription drugs segment is expected to constitute a significant proportion in the forecast period. Prescription medications account for most of the market share. Major factors affecting the segment growth include a significant rise in the geriatric population, and the rising prevalence of chronic diseases such as cardiovascular disease, cancer, and autoimmune disease. Continuous new product innovations are also accountable for this rising trend.

The country’s population is suffering from various chronic diseases and the numbers are constantly increasing in Japan, they are creating demand for the development of biologics or drugs in the country which are used for treatment purposes. The study titled "Prevalence of Hypertensive Diseases and Treated Hypertensive Patients in Japan: A Nationwide Administrative Claims Database Study" published in July 2022 mentioned that approximately 27 million Japanese people were found to have hypertension, and 89.6% of them received treatment. In men and women, the age-adjusted prevalence of hypertensive patients was 21,414 and 21,084, respectively. This increasing prevalence of chronic diseases is creating demand for prescription drugs as the over-the-counter drugs may hamper the health outcome of the patient. Thus, anticipated to boost the segment growth.

Moreover, the growth of this segment is also attributed to the rising research and development investments, and the introduction of new products in the market. For instance, in March 2022, the Japanese Ministry of Health, Labor, and Welfare (MHLW) granted marketing authorization for Xenpozyme (olipudase alfa) for the treatment of adult and pediatric patients with non-central nervous system (non-CNS) manifestations of acid sphingomyelinase deficiency (ASMD). Xenpozyme is currently the only approved treatment for ASMD and represents Sanofi’s first therapy to be approved under the SAKIGAKE (or “pioneer”) designation. Thus, developments in the country in the prescription drugs segment are expected to drive the segment growth. Therefore, due to the above-mentioned factors, the prescription drugs segment is expected to hold a significant market share in the Japanese pharmaceutical market over the forecast period.

Competitive Landscape

The competitive landscape of the Japan pharmaceutical market covers the business overview, financials, products, and strategies followed by major companies. The pharmaceutical market in Japan is highly competitive and consists of several major players. In terms of market share, a few of the major players are currently dominating the market. And some prominent players are vigorously making acquisitions and joint ventures with other companies to consolidate their market positions in the country. Some of the Key companies which are currently dominating the market are Takeda Pharmaceutical Company Limited, Pfizer Inc., Chugai Pharmaceutical Co., Ltd., Merck & Co., Inc., and Daiichi Sankyo Company, Limited, among others.

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