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japanese-market

Market Overview

Japan is the second-largest pharmaceutical market in the world (~87 billion USD in 2018), 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 2018 – March 2019 fiscal year, the top 20 Japanese pharma companies invested a total of over 14 billion USD in R&D efforts, averaging around 16% of sales revenue. The graph below presents this data on an individual company basis. Expenditure figures include investment in clinical trials and in-house R&D as well as outsourcing to third parties.

 

Top 20 R&D Spending 2018-19

RD-expenditure-2018-19

 

It is noteworthy that the combined R&D budget of the top 10 companies (~13 billion USD) is 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 2018 – March 2019 fiscal year) to that of the top 10 global pharma / biotech companies (2019 fiscal year).

Japanese Pharma (M USD)
1 Takeda 3,370
2 Astellas 1,909
3 Daiichi 1,864
4 Eisai 1,325
5 Dainippon 937
6 Chugai 934
7 Mitsubishi 791
8 Ono 641
9 Shionogi 625
10 Kyowa 490
  TOTAL: 12,886
Global Pharma (M USD)
1 Roche 11,880
2 J&J 11,355
3 Merck & Co. 9,872
4 Novartis 9,402
5 Gilead 9,106
6 Pfizer 8,650
7 Sanofi 6,785
8 Abbvie 6,407
9 BMS 6,148
10 AstraZenica 6,059
  TOTAL: 85,664
 

This shows that the R&D expenditure of the Japanese top 10 pharma is about 15% 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 2018-19 or 2019 financial reports published by the respective companies.