Fujisawa Net Down Though Operating Income Soars

Japan's Fujisawa Pharmaceutical, the ninth largest company on the domestic market, reports a 2.8% rise in turnover for the year ended March 31 to 241.48 billion yen ($2.70 billion), leading to soaring operating income, which was 46% higher at 25.04 billion yen ($280 million). Net income, however, was sharply lower, down 25.7% to 7.47 billion yen ($84 million).

The company points out that while there has been a significant improvement in its US operations through Fujisawa USA Inc, and a subsequent reduction in the extraordinary loss reserved in the allowance for stock evaluation of the subsidiary, there was not such special revenue during the term as seen in the previous term in relation to the termination of the agreement on Fujisawa Astra's products, and this is a major reason for the decline in net income.

On the domestic market, says Fujisawa, the drug industry was faced with a difficult situation due to the implementation of stringent rules governing fair trade practices in the distribution and handling of pharmaceuticals, as well as the revision of the Medical Service Law. At the same time, it adds, there was the government cutback of National Health Insurance reimbursement prices by an industry average of 6.6% commencing April 1994, which "has made the business climate even more formidable."