Cross-cultural communication （65）　

65) Japan as a global pharmaceutical market
In the 24th installment of this series, I discussed the topic of “The Globalization of Japan's Pharmaceutical Industry Cross-cultural communication (24)　”. More than three years have passed since I wrote that article, but it seems that this trend is continuing to intensify. According to the September 4, 2017 issue of Nikkei Business, AstraZeneca (UK), which is ranked 10th in global sales, has made a takeover bid for Daiichi Sankyo, which is ranked 25th. According to the article, Daiichi Sankyo is confident in its “missile therapy” technology, which delivers a pinpoint dose of medicine to cancer cells, and AstraZeneca is aiming to acquire a company that is “small but spicy” like a Japanese pepper, sansho.

However, as I read the article, it seems that the reason why overseas mega-pharmaceutical companies are targeting Japan is not just to acquire the technology of Japanese pharmaceutical companies through acquisitions. The main reason for this is the size and stability of the Japanese market. In my previous article in this series, the Japanese market was ranked second after the US, but China has now overtaken it to take second place, and Japan is now in third place. However, when it comes to the market for new drugs, China still does not have the economic strength of individuals to match, so Japan is still the world's second largest market. In addition to this huge market, there is a stable infrastructure for purchasing new drugs in the form of universal health insurance. On top of this, the proportion of the total population that is elderly, who are the biggest consumers of prescription drugs, is the highest in the world. There is no reason why the rest of the world wouldn't be interested in this market.

What about the situation in the United States, which is the world's largest market? With more than 40 million people without health insurance, the United States is an unusual country even among developed countries, and its pharmaceutical market is clearly unstable. The “Obamacare” model of universal health insurance, which was launched during the Obama administration, is also likely to be abolished under the Trump administration. For this reason, Japan's market is becoming even more attractive.

So, are the Japanese just sitting back and watching this further globalization trend? The company I'm currently paying attention to is Shionogi & Co. This company is ranked 10th in terms of sales in Japan, and is considered a semi-major company in Japan, but its operating profit of 100 billion yen is on a par with the top companies. The secret to this is that Shionogi's profits from royalties on the anti-HIV drug, dolutegravir, which it developed almost entirely on its own over a period of 30 years, have increased surprisingly. In other words, they have a sales channel in Europe and the US, where this drug is needed, and they receive a percentage of the profits as royalties.

In many ways, Japan has many disadvantages when it comes to surviving in the global economy, but it seems that it is becoming increasingly important to do business by closely communicating with people from different cultures and quickly understanding what people around the world want and where they want it.

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