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japanese-market

Market Overview

Japan is the second-largest pharmaceutical market in the world (~70 billion USD in 2017), and over 40 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

In the April 2017 – March 2018 fiscal year, the top 20 Japanese pharma companies invested a total of over 13 billion USD in R&D efforts, averaging around 16% of sales income. The graph below presents this data, with the blue bars representing R&D expenditure and the gray line indicating R&D expenditure as a percentage of sales revenue.

 

Top 20 R&D Spending 2017-18 (M USD)

research-expenditure-2017

 

It is noteworthy that the combined R&D budget of the top 10 companies (~12 billion USD) is almost an order of magnitude greater than the rest (~1.3 billion USD). The top companies also tend to spend a greater percentage of their sales income on R&D. Nevertheless, smaller companies still spend significant amounts on research, and experience shows that 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 2017 – March 2018 fiscal year) to that of the top 10 global pharma / biotech companies (2017 fiscal year).

Japanese Pharma (M USD)
1 Takeda 2,902
2 Daiichi 2,105
3 Astellas 1,856
4 Eisai 1,245
5 Chugai 793
6 Dainippon 775
7 Mitsubishi 704
8 Ono 614
9 Shionogi 534
10 Kyowa 439
  TOTAL: 11,967
Global Pharma (M USD)
1 Roche 10,564
2 J&J 10,554
3 Merck 10,208
4 Novartis 8,972
5 Pfizer 7,657
6 Sanofi 6,169
7 Eli Lilly 5,282
8 BMS 4,800
9 Gilead 3,300
10 Bayer 3,256
  TOTAL: 70,762
 

This data shows that the R&D expenditure of the Japanese top 10 pharma is almost 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 2017-18 or 2017 financial reports published by the respective companies.