PharmaVitae Analytics
Japan Pharma Outlook 2027
Strategizing Growth in an Evolving Industry Landscape
June 2018
| 2PharmaVitae Analytics
Edward Thomason
Company Analyst
Pharma Intelligence
Informa
Zara Fulton
Company Analyst
Pharma Intelligence Informa
Ian Haydock
Editor-in-Chief (Asia Pacific)
Pharma Insights
Informa
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PharmaVitae’s Japan Pharma Peerset
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Japan Pharma will add $6.5bn out to 2027 [JPN], generating $69.5bn in 2027 [JPN]
Low CAGR of 1.0% is indicative of the domestic pressures facing Japan Pharma
Healthy launch portfolio will offset heavy core and expiry portfolio
Launch portfolio will add $11.4bn over 2017-27 [JPN]
Core and expiry portfolio will lose $4.8bn over 2017-27 [JPN]
Japan Pharma: Global Revenue Growth Outlook, 2017-27 [JPN]
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Japan Pharma Challenges: Aging and Declining Japanese Population
Source: United Nations, 2017; World Health Organization, 2017
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Japan Pharma Opportunities: Government Incentives – The Stick Approach
Government Policies to Control Healthcare Spending
Regular Government Pricing Revisions
May occur annually from 2020 [JPN]
Set to increase the dichotomy between established and more innovative companies
Government Facilitated Generics Growth
Generic volume domestic market share: • Rose from 26% to 66% over 2012-16 [JPN]• Goal of 80% by 2020 [JPN]
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Japan Pharma Opportunities: Government Incentives – The Carrot Approach
Government Policies to
Pricing Premiums* Reform
Cost Effectiveness Assessment
Company Rankings
Government Policies to Encourage Japan-Based Innovation
*Based on Health Technology Assessment (HTA) criteria
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Challenges and Opportunities: Impact of Government Mechanisms
Will these mechanisms designed to encourage innovation while saving healthcare costs lead to higher R&D productivity and revenue growth?
More Regular Pricing Revisions
Stricter HTA Requirements
Higher Innovation Standards
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Strategies for Global Growth: Navigating Domestic Headwinds and Measures
Cost-saving measures, including job cuts
Divestitures of non-core or longer-listed products
Rationalization
Collaborations
Sharpened focus on:
• Oncology and central nervous system
• US and emerging markets
• R&D position in regenerative medicine
Greater economies of scale
Sustain profitability
Boost R&D productivity
Consolidation Reinvention
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Strategies for Global Growth: More Big M&A for Japan Pharma?
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Strategies for Global Growth: Takeda/Shire, 2017
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Strategies for Global Growth: Takeda/Shire
Regional Overview, 2027
US
5EU
Japan
RoW
$14,836m
$8,180m
$4,728m
$5,537m
Regional Overview, 2027
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Strategies for Global Growth: Astellas/Daiichi Sankyo, 2017
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Strategies for Global Growth: Astellas/Daiichi Sankyo
Regional Overview, 2027
US
5EU
Japan
RoW
$4,919m
$3,131m
$7,298m
$2,657m
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Strategies for Global Growth: Otsuka/Eisai, 2017
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Strategies for Global Growth: Otsuka/Eisai
Regional Overview, 2027
US
5EU
Japan
RoW
$4,989m
$1,206m
$6,809m
$3,398m
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Japan Pharma: Global Revenue Growth Outlook, 2017-22 [JPN] ($m)
Source: Datamonitor Healthcare; PharmaVitae Analytics
Japan Pharma will add $5.5bn out to 2022 [JPN]
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Japan Pharma: Global Revenue Growth Outlook, 2022-27 [JPN] ($m)
Japan Pharma will add $1bn out to 2027 [JPN]
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Japan Pharma: Therapy Area Dynamics
↑ Central Nervous System
↑ Oncology
↓ Cardiovascular
Global Growth
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Growth will be fueled by oncology and central nervous system (CNS) indications
Oncology market will grow by $5.4bn to reach $17.0bn in 2027 [JPN] at a 3.9% CAGR
CNS market will grow by $3.6bn to reach $14.1bn in 2027 [JPN] at a 3.0% CAGR
Cardiovascular will show the most decline, losing $1.9bn at a CAGR of -2.7%
Japan Pharma: Therapy Area Dynamics, 2017-27 [JPN] ($m)
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Japan Pharma: Regional Dynamics, 2017-27 [JPN]
Regional contributions to Japan Pharma revenue are set to converge
Shrinking Japanese market
China and South Korea markets hold significant potential through tripartite cooperation agreement
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Japan Pharma: Lifecycle Analysis
Core – Patented products that neither launch nor expire between 2017-27 [JPN]
Expiry – Patented products expiring between 2017-27 [JPN]
Launch – Patented products launching between 2017-27 [JPN]
Launch products set to add $11.4bn over the forecast period
Core products set to lose $2bn in value
Expiry products revenues will erode by $2.8bn between 2017-27 [JPN]
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Japan Pharma: Opportunities in China
China’s FDA ReformsNew SMAR and MISA
Rare Disease List & Allowance of Foreign Data
Stronger IP Protection More
trilateral cooperation (Japan/Korea/China)
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Japan Pharma: Any Aces Up Japan Pharma’s Sleeve?
Regenerative medicine
Early stage clinical development not fully reflected in current forecasts
Nobel prize for Physiology or Medicine awarded to Professor
Shinya Yamanaka who discovered iPS cells
Streamlined regulatory pathway facilitated by the MHLW offers potential first to market global
advantage
| 25PharmaVitae Analytics
Edward Thomason
Company Analyst
Pharma Intelligence
Zara Fulton
Company Analyst
Pharma Intelligence
Ian Haydock
Editor-in-Chief (Asia Pacific)
Pharma Insights
Questions?