Market Overview

Japan is the second-largest pharmaceutical market in the world (~96 billion USD in 2020), and numerous Japanese pharma and biotech companies are engaged in original drug discovery research. Depending on your offerings, other target customers may include diagnostics, cosmetics, nutraceutical and medical device companies, in addition to public research institutes and universities carrying out biomedical research.

R&D Expenditure

During the April 2020 – March 2021 fiscal year, the top 20 Japanese pharma companies invested a total of over 16 billion USD into R&D efforts, averaging around 16% of sales revenue. The graph below presents this data on an individual company basis. Expenditure figures include spending on clinical trials and in-house R&D as well as outsourcing to third parties.

Top 20 R&D Spenders 2020-21

It is noteworthy that the combined R&D budget of the top 10 companies (~14.9 billion USD) is over an order of magnitude greater than the rest (~1.2 billion USD). The top companies also tend to spend a greater percentage of their sales revenue on R&D. Nevertheless, smaller companies still spend significant amounts on research, and experience shows they can be excellent customers.

Global Comparison

To view the R&D spending of Japanese companies in a global context, the following table compares R&D expenditure of the top 10 Japanese pharma (April 2020 – March 2021 fiscal year) to that of the top 10 global pharma / biotech companies (2020 fiscal year).

Japanese Pharma (M USD)
1	Takeda	4,801
2	Astellas	2,226
3	Daiichi	2,091
4	Eisai	1,382
5	Dainippon	1,220
6	Chugai	1,044
7	Mitsubishi	668
8	Ono	574
9	Kyowa	481
10	Shionogi	404
	TOTAL:	14,891

Global Pharma (M USD)
1	Merck & Co.	14,442
2	J&J	11,355
3	Roche	12,153
4	Pfizer	9,405
5	Novartis	8,980
6	Abbivie	6,557
7	Eli Lilly	6,936
8	AstraZenica	5,991
9	Sanofi	5,529
10	Bayer	5,301
	TOTAL:	86,649

These figures show that R&D spending by the Japanese top 10 pharma is about 17% that of the global top 10. Although the scale of Japanese drug discovery research is relatively small in global terms, it still represents significant expenditure and commitment. There is no doubt that Japanese pharma companies regard R&D as a strategically important investment.

Source: Figures derived from 2020-21 or 2020 financial reports published by the respective companies.