Japan's Excessive Imports of Pharmaceuticals and Challenges in Infrastructure for Drug Discovery
Masaru Nagasawa (Senior Research Fellow, Pharmaceutical and Industrial Policy Research Institute)
(No.58: Published in April 2013)
Recently, the issue of Japan's excessive imports of pharmaceuticals has been widely discussed. While the majority of the media has argued that Japan's excessive imports of pharmaceuticals have made the domestic pharmaceutical industry a loss-making industry and pointed to its lack of international competitiveness, in reality, the phenomenon of Japan's excessive imports of pharmaceuticals is caused by the expansion of overseas manufacturing. This expansion of overseas manufacturing is the result of the location choices of pharmaceutical companies, and is caused by structural factors in Japan.
Pharmaceutical manufacturing is an integral part of the value chain for drug discovery and plays an important role in enabling innovation in the healthcare sector and the contribution of the domestic pharmaceutical industry to Japan's healthcare, economy, and science and technology. Unfortunately, Japan does not have policies in place to address the importance of pharmaceutical manufacturing. If structural factors related to location selection are left unaddressed, there is a fear that in the future the manufacturing base in Japan itself will be relocated overseas, hollowing out domestic manufacturing.
Based on this understanding, this paper clarifies the actual situation of excess imports of pharmaceuticals and shows that there is concern about the hollowing out of domestic pharmaceutical manufacturing in Japan behind this situation. It then discusses the challenges of developing a drug discovery infrastructure to stem the tide toward hollowing out and allowing a competitive pharmaceutical industry to take root in Japan.