International Competitiveness and Growth Strategies of R&D-Based Pharmaceutical Companies
Takashi Yagi (Senior Fellow, Pharmaceuticals and Industrial Policy Research Institute)
Takashi Iwai (Former Senior Research Fellow, Pharmaceuticals and Industrial Policy Research Institute)
(No.49: Published in March 2010)
In order for Japan's pharmaceutical industry to further contribute to the health of the Japanese people and the development of the Japanese economy, it is essential for Japan to be a place for drug discovery activities and for companies to have a high level of international competitiveness to compete with foreign companies.
In this study, we compared the international competitiveness of major Japanese, U.S., and European pharmaceutical companies in terms of sales, market share, and other indicators in the global market. We also examined the growth strategies of European companies that are increasing their presence in terms of the concentration and dispersion of top sales by therapeutic area and region, and discussed what Japanese pharmaceutical companies need to do to strengthen their international competitiveness.
While the global pharmaceutical market is undergoing major structural changes, looking at the sales of major pharmaceutical companies in Japan, the U.S., and Europe, while U.S. companies remain dominant in terms of scale, European pharmaceutical companies have recently increased their presence in the global market, characterized by a relative increase in sales diversification at the product/therapeutic level and at the regional level. One of the characteristics of this trend is the relative diversification of sales at the product and therapeutic level as well as at the regional level. On the other hand, Japanese pharmaceutical companies are not necessarily in a superior position compared to their European and US counterparts in terms of responding to structural changes in the global pharmaceutical market. In other words, (1) they are relatively dependent on the U.S. market for revenue, and the U.S. patents for major blockbusters will expire in the next five years; (2) they are relatively behind in entering emerging markets; and (3) although they are introducing biopharmaceuticals of growing importance through acquisitions of venture companies and other means, the number and sales of these drugs are relatively low compared to European and U.S. companies. (3) Although they are introducing increasingly important biopharmaceuticals through acquisitions of venture companies and other means, the number of such products and their share of sales are relatively low compared to those of U.S. and European companies.
In recent years, in addition to the new drug business analyzed in this report, major U.S. and European pharmaceutical companies have been aggressively expanding through acquisitions and alliances to enter the growing generic drug market and the biosimilar drug market, which is expected to grow in the future. This is a strategy to strengthen competitiveness through multi-layering of the pharmaceutical business. In order for Japanese pharmaceutical companies to continue to develop and supply a wide range of medicines needed by patients and contribute to the enhancement of the nation's health capital and growth, it is essential for them to make strategic investments to strengthen their international competitiveness and to maintain and strengthen their earnings base that can withstand the risks of new drug development.