Here's an article on Japan's pharm. market and Yamanouchi is one of the major players. Researching the others on your list.
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Shakeout Looms For Japan's Drug Sector
Dow Jones News Service ~ December 9, 1996 ~ 11:30 pm EST
By Masayoshi Kanabayashi
Staff Reporter of The Wall Street Journal
TOKYO -- Japan's big drug makers, facing slow growth and tough competition in their home markets, are preparing an unprecedented expansion overseas to lock onto new sources of revenue.
Leading the advance are big Japanese pharmaceutical makers such as Takeda Chemical Industries Ltd., Sankyo Co., Eisai Co. and Yamanouchi Pharmaceutical Co. These companies have set their sights on Asia, North America and Europe. Their executives are still forming strategies, but the campaign is likely to include more joint ventures, new research facilities for tapping foreign talent, and a steady effort to turn weak sales networks into powerful tentacles that stretch across the globe.
Japan's drug companies have had it easy until now. The Japanese government allowed them to charge premiums for new drugs as an incentive to develop. Meanwhile, government ceilings on drug prices were set so high that drug makers routinely were able to set aside part of their profit margins for rebates to doctors who prescribed their drugs, a practice that is widely accepted in Japan.
Now, costs are running out of control. Japan spent roughly 27.2 trillion yen ($241 billion) on medical services last year, up 1.4 trillion yen from the previous year. Like the U.S., Japan believes it must cut back. Faced with swelling losses in the medical insurance systems, the government is lowering price ceilings, reviewing payouts for the national health-insurance system and moving toward shortening incentive periods for newly developed drugs.
This will lead to a shakeout in Japan's drug industry, and only those makers that prove able to compete with foreign drug makers will survive. "You can't only rely on the Japanese market for growth any more," says Yasuo Ishii, director of corporate planning at Yamanouchi Pharmaceutical. "Unless you look overseas, it will be hard to stay in business."
Many have already built their beachheads. Sankyo, for example, is selling a new drug to treat high cholesterol called Mevalotin in the U.S. through Bristol-Myers Squibb Co. Last year, Takeda posted sales of more than $600 million in the U.S. thanks to two hit drugs -- one for prostate cancer, the other to treat ulcers -- and the company says it has two more new drugs in clinical testing for the U.S. Last month, Eisai received approval from the U.S. Food and Drug Administration to
market a new drug for Alzheimer's disease, and it is preparing to sell it through a new global sales network.
Most companies say major acquisitions won't play much of a role in this push abroad, mostly because key markets like the U.S. offer few bargains after years of consolidation. Japan's drug makers say big U.S. and European rivals have already snapped up most of the companies worth buying. Instead, the Japanese are likely to be shopping for partners that can help market newly developed drugs.
Meanwhile, the Japanese are set to play catch-up in investing in new drug development. Shuji Katayama, an analyst at Goldman, Sachs (Japan) Corp., says Japan's drug makers spend only about a third of the annual $1 billion or so that the average U.S. pharmaceutical company spends to invent new drugs. Now, the Japanese are hiring more researchers abroad, tapping the traditional strength of research in the U.S. and Europe.
Eisai, for example, coordinates its global research operations through a team set up in Boston, not Japan. The company's president has been quoted in the Japanese media as saying it takes five Japanese researchers to come up with what one American can develop.
(END) DOW JONES NEWS 12-09-96
11 31 PM
Shakeout Looms -2-: Firms Look Abroad For Survival
Japan's drug makers have fallen behind other Japanese companies in moving
abroad. The 35% of revenues that Takeda earns overseas compares with 70% for
Sony Corp., for example, or about 50% for Toyota Motor Corp. According to the
U.S. consulting firm Bain & Co., only about a fifth of all Japanese companies are
worldclass competitors. The rest have grown dull after years of concentrating on the
less-competitive domestic market.
For Japan's drug industry, though, foreign competition is now coming to the
domestic market with a vengeance, thanks in part to the government's deregulation
program. Already, foreign drug makers are jumping into the Japanese market. Last
March, for example, a unit of BASF AG acquired control of Hokuriku Seiyaku
Co., a medium-size pharmaceutical firm, by obtaining a majority stake.
Another German firm, Boehringer Ingelheim Corp. also became a leading
shareholder of SS Pharmaceutical Co., a drug company listed in the first section of
the Tokyo Stock Exchange. SmithKline Beecham PLC recently terminated an
affiliation with Fujisawa Pharmaceutical Co. to begin marketing drugs here on its
own. And early this fall, Merck & Co. set up a marketing joint venture with Chugai
Pharmaceutical Co.
(END) DOW JONES NEWS 12-09-96
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