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Characteristics of Japanese drug market
and recommended strategy for Korean
mfrs.
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Only 2% growth of Japanese drug market is
expected towards 2010.
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a) Japanese government’s budget deficit amounts to
$8trillion in return for bolstering long economic
slump.
b) Accumulated government debt requires Japanese
Health Care Scheme save $10billion until 2011.
c) Japanese drug prices are under strict government
control.
d) Japanese government resorted to sharp reduction
of drug prices, such as 8% price reduction once
every two years, low price of new drugs, additional
price reduction of patent-expired drugs, additional
price reduction of drugs which surpassed expected
sales.
Pre-requisite for the entry to
Japanese market
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1) Preparing at least 2 new products which have unique medical
advantages.
2) Showing lessons of how Japanese drug makers succeeded in US
entry.
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a) Takeda:
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b) Eizai
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Anti-hypertensive ‘Olmetek’
Anti-clotting ‘prasugrel’
d) Astellas Pharmaceuticals
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Alzheimer drug ‘Aricept’
Anti-ulcer ‘Pariet’
c) Daiichi-Sankyo
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Prostate cancer drug ‘Luprondepo’
Anti-ulcer ‘Prevacid’
Immune suppression drug ‘Prograf’
Over active bladder drug ‘Vesicare’
3) Korean drug makers have to strengthen in-house drug research to
produce two products.
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Critical mass for annual R&D budget: $100mil
Advised critical mass for the
initial product marketing in Japan
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1) Lessons of Santen Pharmaceutical’s
retreat from US market in 2004.
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Annual Sales: $50mil
Annual financial loss: $20mil
Numbers of MRs:150 persons
2) Korean drug makers have to attain
sales of $100mil to maintain 150 MRs in
Japan in the same token.
Procedures for the entry to
Japanese market
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1) First: Starting from simple-licensing
2) Second: Joint sales & promotion
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a) Product for niche market requires 150 MRs
b) Product for mass market requires 1000 MRs
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Korean maker’s MRs: 150 persons
Japanese maker’s MRs: 850 persons(Co-promotion)
e.g.: Eizai’s Aricept promotion in US
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Eizai:500 MRs
Pfyzer: 3000 MRs
Step-by-step entry
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Example of Eizai’s US entry
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1) First step: ‘Aricept’
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2) Second step: ‘Pariet’
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Small promotion by Eisai itself assisted by
Pfyzer’s strong co-promotion
Expanded full promotion by Eizai in
collaboration with Janssen’s co-promotion
3) Third step: ‘E-7389’
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Eizai intends independent promotion & sales by
itself
Partnering with Japanese drug
makers
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Korean makers need Japanese partners for
both development and marketing.
Keys for deciding good partner
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1) Franchise of Japanese makers
2) Synergies in products between Korean and
Japanese
3) Take friendship approaches instead of
confrontation style
4) Cross-licensing
5) Cooperation in international clinical trials
6) Success of Joint Venture depends on case-bycase
Entry to Japanese generic market
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Japanese generic market is starting to
expand, but its market share is still very
small.
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The share of generic in Japan is only 16%
compared with that of 50% in US.
Japanese consumer still put priority on
quality and show strong brand royalty.
Big market share of Japanese generic
products would take years probably until
2010~2015.
Recommendation for Korean generic
maker’s entry to Japanese market
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1) Critical mass for a generic maker in Japan
will become annual sales of $1billion in the
medium term future.
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Heated price competition will inevitably lead to
heavy M&As.
2) Advice to Korean generic makers
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a) Try to achieve critical mass of $1bil by making
M&As.
b) Collaborate with Sandoz or Indian drug makers
as well as with major Japanese generic mfrs.
Recommendation for the entry to
Japanese market
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1) Establish good relations with doctors by furnishing
useful information on drugs.
2) Specialized MR system is being in fashion in Japan.
3) Establish good relations with one of the 3 biggest
wholesalers(Suzuken, Alfressa, Kuraya-Sanseido)
4) Keep in mind that drug prices decrease by 8%
once every two years.
5) Sales decrease less sharper than in the US after
patent expiration.
6)Orphan drugs make big fortunes in US, but not in
Japan.