Japan pharmaceuticals market: $90 billion industry in 2011

Press release   •   May 01, 2013 12:33 BST

The Japan pharmaceuticals market is suggested to have reached to a value of around $89 billion in 2011, growing from a total of $62.8 billion in 2005. This suggests a CAGR of 5.1% between 2005 and 2011.

Growth of the domestic pharmaceutical industry has recently been hampered by biennial drug price reductions, which are expected to continue as the government attempts to cut healthcare expenditure. Price reviews are also constrained by a national health budget, which limits the increase of drug prices. In addition, the gradual increase in market share and competition from generics has depressed market value and will continue to do so as government policy promotes their use.

Japan had a population of 127,817,277 in 2011, making it the 10th most populated country in the world (The World Bank, 2012). However, since 2005, as the number of deaths exceeded that of births, the population has declined. Without significant government intervention, the depopulation process is expected to continue.

The proportion of people aged 65 or over is 23.3% and projected to reach 29.1% by 2020 and almost 40% by 2050 (Statistical Research and Training Institute, 2012). These demographic changes will present further challenges to a stagnating economy, which, as the data in this report confirms, is already struggling with reduced economic growth. A diminishing workforce and falling productivity levels will likely add to the economic difficulties Japan is experiencing.

The associated increase in disease burden has also had implications for the healthcare system. Healthcare expenditure has risen, and is set to rise further as the population continues to age. In 2010, Japan's healthcare spending per capita was $4,065.4, a significant increase from 2005.

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