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japanese-market

Market Overview

Japan is the second-largest pharmaceutical market in the world (~88 billion USD in 2016), 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 2016-17 fiscal year, the top 20 Japanese pharma companies invested a total of over 12 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 (M USD)

research-expenditure

 

It is noteworthy that the combined R&D budget of the top 10 companies (~11 billion USD) is almost 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 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 look at the R&D spending of Japanese companies in a global context, the following table compares R&D expenditure of the top 10 Japanese pharma to that of the top 10 global pharma / biotech companies (figures from the 2016-17 and 2016 fiscal periods, respectively).

Japanese Pharma (M USD)
1 Takeda 3,015
2 Daiichi 1,868
3 Astellas 1,620
4 Eisai 980
5 Chugai 741
6 Dainippon 704
7 Mitsubishi 607
8 Shionogi 522
9 Ono 501
10 Kyowa 469
  TOTAL: 11,027
Global Pharma (M USD)
1 Roche 11,675
2 Merck 10,124
3 J&J 9,095
4 Novartis 8,402
5 Pfizer 7,872
6 Sanofi 6,112
7 BMS 5,920
8 Eli Lily 5,244
9 Gilead 5,098
10 Bayer 5,050
  TOTAL: 74,592
 

This data shows that the R&D expenditure of the Japanese top 10 pharma is around 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.

 

Sources: All figures derived from 2016 or 2016 /17 financial reports published by the respective companies.