The Japanese Drug Industry In 1997

While other industries in Japan are suffering the after-effects of the"bubble" economy, the pharmaceutical industry is steadily increasing production, says Osamu Kido, director general of the Japan Pharmaceutical Manufacturers Association.

Writing in the current issue of the JPMA journal Japan Update, Mr Kido says this growth is mainly due to the home market, which accounts for over 20% of world drug sales. The operating profit of listed drug companies in Japan was 15.9% of sales in fiscal 1995, up 5.4%, which is comparable to that in other industries.

However, he warns, in 1997 the drug industry will operate in a severe cost management environment. In April 1996, National Health Insurance drug prices fell 8.5% on average, due partly to repricing, and it is likely that they will fall again when consumption tax goes up from 3% to 5% in April. Also, since April 1996 the NHI price calculation method for non-innovative new drugs (me-toos) has differed from that for innovative new drugs.