Pharmaceutical Supply Chain in Japan - Periodic Drug Price Revisions by National Health Insurance Increase Competition and Squeeze Profit Margins
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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 world's 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 control of pharmaceutical supply materials
- Develop risk mitigation strategies to enhance risk management
Table of Contents
1 Table of Contents
1 Table of Contents 5
1.1 List of Tables 7
1.2 List of Figures 7
2 Introduction 8
3 Pharmaceutical Supply Chain in Japan – Overview 9
3.1 Introduction 9
3.2 Structure of Supply Chain – Distribution Channels 9
3.3 Participants in Supply Chain 10
3.3.1 Manufacturers – Pharmaceutical Companies 10
3.3.2 Wholesaler 13
3.3.3 Medical Institutions 17
3.3.4 Patients 18
3.4 Evolution of Pharmaceutical Supply Chain in Japan 20
3.4.1 Traditional Method 20
3.4.2 New Technologies Implemented in Japanese Pharmaceutical Supply Chain 21
3.5 How Japanese Pharmaceutical Distribution Differs from that of the US and the UK 23
3.5.1 Supply Chain Overview 23
3.5.2 Downstream Supply Chain from Manufacturer 23
3.5.3 Payment Terms for a Pharmaceutical Manufacturer 24
3.5.4 Role of Wholesalers 24
3.5.5 Wholesaler and Pharmacy Margins 25
3.5.6 Upstream Supply Chain for Pharmacies 25
3.5.7 Reimbursement Scenario 25
3.6 Business Strategies Involving Japan and India 26
3.6.1 Case Study of Daiichi Sankyo and Ranbaxy 26
3.6.2 Case Study of Lupin 28
4 Pharmaceutical Supply Chain in Japan – Laws and Regulations 30
4.1 Manufacturing License 30
4.1.1 Foreign Manufacturers 30
4.2 License for Marketing Authorization 32
4.3 Pharmaceuticals Labeling and Advertising Regulations 33
4.4 Drug Retail Seller Licensing 33
4.4.1 Good Post-marketing Surveillance Practice 33
4.4.2 Adverse Drug Reaction and Infection Reporting 34
5 Pharmaceutical Supply Chain in Japan – Risk Management 35
5.1 Supply Risk 35
5.1.1 Imports 35
5.1.2 Inferior Quality of Supply 35
5.1.3 Non-availability of Resources 35
5.1.4 Natural Disasters 36
5.1.5 Selection of Supplier 36
5.1.6 Cost Risk 36
5.2 Demand Risks 37
5.2.1 Forecasting Errors 37
5.3 Miscellaneous Risks 37
5.3.1 Transportation Risk 37
5.3.2 Quality Risks 37
5.3.3 Storage Risk 37
5.3.4 Information Sharing Risks 37
5.3.5 Safety Regulations 38
6 Pharmaceutical Supply Chain in Japan – Securing the Supply Chain 39
6.1 Pharmaceutical Supply Chain Industry – Key Issues 39
6.1.1 Drug Price Revision 39
6.1.2 Inflexible Business Culture 39
6.1.3 Packaging Issues 39
6.1.4 Lack of Advanced Planning 40
6.2 Impact of Government Regulations Regarding Technology Adoption in Pharmaceutical Supply Chain 40
6.2.1 Case Study: Toho Pharmaceutical Co., Ltd. 41
7 Pharmaceutical Supply Chain in Japan – Drivers and Restraints 43
7.1 Drivers 43
7.1.1 Universal Health Coverage 43
7.1.2 Growing Demand for Secure Packaging 43
7.1.3 Japanese Pharmaceutical Industry: M&A trends 43
7.1.4 Globalization and Emerging Markets 44
7.1.5 Free Trade Agreements with Various Countries 44
7.2 Restraints 45
7.2.1 Drug Price Regulation 45
7.2.2 Counterfeit Drugs and Drug Traceability 45
7.2.3 High Cost of Securing Supply Chain 45
7.2.4 Natural Disasters 45
8 Pharmaceutical Supply Chain in Japan – Leading Distribution Players 46
8.1 Medipal Holdings Corporation in Japan 46
8.1.1 Company Overview 46
8.1.2 Financial Performance 47
8.1.3 Initiatives under the 2014 Medipal Medium-term Vision 48
8.2 Alfresa Holdings Corporation in Japan 48
8.2.1 Company Overview 48
8.2.2 Financial Performance 49
8.3 Suzuken Group in Japan 50
8.3.1 Company Overview 50
8.3.2 Financial Performance 51
8.3.3 Disaster Countermeasures Systems 52
8.4 Toho Holdings Co., Ltd. in Japan 53
8.4.1 Company Overview 53
8.4.2 Financial Performance 54
9 Pharmaceutical Supply Chain in Japan – Appendix 55
9.1 Market Definitions 55
9.2 Abbreviations 55
9.3 Bibliography 56
9.4 Research Methodology 57
9.4.1 Coverage 57
9.4.2 Secondary Research 57
9.4.3 Primary Research 58
9.4.4 Expert Panel Validation 58
9.5 Contact Us 58
9.6 Disclaimer 58
List of Tables
1.1 List of Tables
Table 1: Pharmaceutical Supply Chain in Japan, Leading Pharmaceutical Companies, 2011 12
Table 2: Pharmaceutical Supply Chain in Japan, Members of Japanese Pharmaceutical Wholesalers Association, 2011 15
Table 3: Pharmaceutical Supply Chain in Japan, Role of Pharmacist in Japan, the UK and Sweden, Differences and Similarities 17
Table 4: Pharmaceutical Supply Chain in Japan, Pharmaceutical Reimbursement Scene 20
Table 5: Pharmaceutical Supply Chain in Japan, Working Capital Metrics for Pharmaceutical Manufacturers, 2010 24
Table 6: Pharmaceutical Supply Chain in Japan, Comparison of Pharmaceutical Reimbursements and Margins in Japan, the UK and the US 25
Table 7: Pharmaceutical Supply Chain in Japan, Number of Counterfeit Incidents Globally, 2012 45
Table 8: Pharmaceutical Supply Chain in Japan, Alfresa Holdings Corporation, Subsidiaries, 2011 49
Table 9: Pharmaceutical Supply Chain in Japan, Suzuken, Consolidated Subsidiaries, 2011 51
List of Figures
1.2 List of Figures
Figure 1: Pharmaceutical Supply Chain in Japan, Supply Chain Structure, 2011 9
Figure 2: Pharmaceutical Supply Chain in Japan, Manufacturer's Role in a Pharmaceutical Supply Chain, 2011 11
Figure 3: Pharmaceutical Supply Chain in Japan, Market Size of Pharmaceutical Wholesalers and Distributors, $bn, 2009 and 2010 13
Figure 4: Pharmaceutical Supply Chain in Japan, Pharmaceutical Sales by Facility (%), 2010 14
Figure 5: Pharmaceutical Supply Chain in Japan, Head Offices and Employees of Members of Japanese Pharmaceutical Wholesalers Association, 2008 15
Figure 6: Pharmaceutical Supply Chain in Japan, Market Share of Leading Wholesaler Companies, (%), 2010 16
Figure 7: Pharmaceutical Supply Chain in Japan, Internet Pharmacy, eKenkoshop 18
Figure 8: Pharmaceutical Supply Chain in Japan, Reimbursement Scenario 19
Figure 9: Pharmaceutical Supply Chain in Japan, Comparison of Japan, the US and the UK 23
Figure 10: Pharmaceutical Supply Chain in Japan, Hybrid Business Model between Daiichi Sankyo and Ranbaxy, 2008 27
Figure 11: Pharmaceutical Supply Chain in Japan, Process for Accreditation of Foreign Manufacturers in Japan, 2011 31
Figure 12: Pharmaceutical Supply Chain in Japan, Suzuken Group, Supply System at Times of Disaster, 2011 36
Figure 13: Pharmaceutical Supply Chain in Japan, Key Issues 39
Figure 14: Pharmaceutical Supply Chain in Japan, Toho Pharmaceuticals, Technology Adoption, 2012 41
Figure 15: Pharmaceutical Supply Chain in Japan, Drivers and Barriers, 2011 43
Figure 16: Pharmaceutical Supply Chain in Japan, Free Trade Agreements and Economic Partnership Agreements, 2012 44
Figure 17: Pharmaceutical Supply Chain in Japan, Medipal Holdings Corporation, Company Profile, 2011 46
Figure 18: Pharmaceutical Supply Chain in Japan, Medipal Holdings, Subsidiaries, 2011 47
Figure 19: Pharmaceutical Supply Chain in Japan, Alfresa Holdings Corporation, Company Profile, 2011 48
Figure 20: Pharmaceutical Supply Chain in Japan, Suzuken Group, Company Profile, 2011 50
Figure 21: Pharmaceutical Supply Chain in Japan, Suzuken Group, Disaster Countermeasure Systems, 2011 52
Figure 22: Pharmaceutical Supply Chain in Japan, Toho Holdings Corporation, Company Profile, 2011 53
Companies Mentioned
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