Pharmaceutical Supply Chain in Japan - Periodic Drug Price Revisions by National Health Insurance Increase Competition and Squeeze Profit Margins

Summary

Leading business intelligence provider GBI Research has released its latest research report, entitled Pharmaceutical Supply Chain in Japan - Periodic Drug Price Revisions by National Health Insurance Increase Competition and Squeeze Profit Margins. The report focuses on the current scenario of supply chain management. Key participants in the pharmaceutical supply chain in Japan are covered in the report as well as issues such as pricing, labeling, packaging, warehousing, logistics, and distribution.

The Japanese pharmaceutical market is the worlds second largest market next to the US. However, the industry has characteristics which make it unique and attractive for multinational companies. Pressures such as the aging population, drug price revisions, patent expiries and drug lag have compelled industry leaders to change their business strategies to cut costs and become more agile, and companies are making efforts to rationalize their sourcing and distribution, and increase operational efficiency to this end.

GBI analysis shows that supply chain participants in Japan still follow the traditional route of drugs manufactured by the pharmaceutical companies being distributed entirely through wholesalers to patients via retailers. The top four wholesalers in the Japan namely Medipal Holdings, Alfresa Holdings, Suzuken and Toho Holdings, held a 90% share of overall Japanese pharmaceutical distribution market in 2011.

Pharmaceutical Affairs Law (PAL) regulates the manufacturing, marketing and distribution of pharmaceutical drugs and medical devices in Japan. The rules and regulations set under this law make it difficult for foreign manufactures to set up base in Japan, leading to various Mergers and Acquisitions (M&A) in the industry. The Ministry of Health, Labor and Welfare (MHLW) and the Pharmaceuticals and Medical Devices Agency (PDMA) are the key regulators in Japan.

Healthcare in Japan is primarily paid by the National Health Service, which is administered by MHLW. Drug prices are fixed and controlled by the Japanese government. However, the price at which the manufacturer sells the drug to the wholesaler depends on the negotiations between both the parties and varies from one wholesaler to another. Similarly, pharmacy margins depend on negotiations between the wholesaler and pharmacy. Because of revisions in National Health Insurance (NHI) drug prices in 2010, all the key players in the supply chain suffered losses as they had to compromise on profit margins.

Globalization, free Trade agreements between countries, growing demand for secure packaging, and M&As are some of the key drivers for the Japanese pharmaceutical supply chain.

Scope

- Segmentation of pharmaceutical supply industry by its major components such as manufacturers, wholesalers and medical institutions
- Key issues and unmet needs of the pharmaceutical supply chain in Japan
- Analysis of technologies adopted by pharmaceutical manufacturers and wholesalers to stay competitive in the current scenario
- Insights into the legal and regulatory landscape, focusing on laws and regulations followed to obtain marketing, manufacturing and distribution licenses for drugs in Japan.
- Understanding of key risks that are encountered by pharmaceutical supply chain participants.
- Profile of key companies involved in the pharmaceutical supply chain.

Reasons to buy

- Evaluate on the existing market scenario in pharmaceutical supply chain management.
- Analyze the requirements for regulatory compliance for pharmaceutical supply chain management.
- Gain knowledge of the key challenges and unmet needs of the pharmaceutical supply chain in Japan
- Develop strategies for quality c