Measuring Economic Profit Margins in the Japanese Pharmaceutical Industry A Comparison with Other Domestic Industries, the U.S. Pharmaceutical Industry, and Other U.S. Industries
Takuma Sugawara (Full-time Lecturer, Department of Healthcare Administration, International University of Health and Welfare)
(Formerly Assistant Professor, Faculty of Economics, Gakushuin University)
Hirotsugu Fujiami (Former Senior Researcher, The Office of Pharmaceutical Industry Research )
(No.12: Published in June 2003)
Given the asset nature of R&D, it is more appropriate to look at the profit margin of the R&D-dependent pharmaceutical industry in terms of the economic profit margin rather than the accounting profit margin.
The economic profit margin of the Japanese pharmaceutical industry is relatively high compared to other domestic industries, but significantly lower than that of the U.S. pharmaceutical industry. In addition, the variation in profit margins among Japanese pharmaceutical companies is large compared to the U.S. pharmaceutical industry, indicating that the disparity among companies is more pronounced.