Press Release

Pharmaceutical Supply Chain in Japan - Periodic Drug Price Revisions by National Health Insurance Increase Competition and Squeeze Profit Margins


August 14th, 2012

Global Information Inc. would like to present a new market research report, "Pharmaceutical Supply Chain in Japan - Periodic Drug Price Revisions by National Health Insurance Increase Competition and Squeeze Profit Margins" by GBI Research.

Pressures felt in Japan as a result of the countrys aging population, drug price revisions and patent expiries have compelled pharmaceutical industry leaders to rationalize their sourcing and distribution, and increase operational efficiency

The new report, "Pharmaceutical Supply Chain in Japan - Periodic Drug Price Revisions by National Health Insurance Increase Competition and Squeeze Profit Margins", states that market competition has led to an oligopoly being held by a few wholesalers, who effectively control the countrys pharmaceutical distribution market..

Four wholesalers, namely Medipal Holdings, Alfresa Holdings, Suzuken and Toho Holdings, accounted for 90% of the overall pharmaceutical distribution market last year, generating a total revenue of JPY7.3 trillion ($87.8 billion).

The Pharmaceutical Affairs Law (PAL) regulates the manufacture, marketing and distribution of pharmaceutical drugs and medical devices in Japan. Its rules and regulations make it difficult for foreign manufacturers to establish themselves in the country, leading to significant M&A activity.. The key regulators in Japan are the MHLW and the Pharmaceuticals and Medical Devices Agency (PDMA). However, this national independence proved an issue in March 2011, when the Fukushima disaster highlighted issues in the countrys supply chain. Pharmaceutical production activity became stagnant in certain locations due to a restricted power supply and damage to distribution centers, creating a lag in vital medical products. Industry leaders have since reformulated their supply chain strategies in response to these catastrophes. For example, Suzuken has formulated guidelines to ensure the supply of pharmaceuticals at times of major disaster. The company is looking to construct a cooperative relationship with hospitals and pharmacies so that products can be delivered directly if supervising branches are not functioning.


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