Nature Medicine | Spoonful of Medicine

Gloomy pharma forecast in Japan downgraded after quake

By Branwen Morgan

japan250.jpgJapan is the world’s second largest pharmaceutical market after the US on the basis of total revenue. But according to Business Monitor International (BMI), a London-based analyst firm, Japan’s overall pharmaceutical market is stagnating, and the devastating 9.0-magnitude earthquake that struck in March has introduced new uncertainties. In its initial review, published in early March, BMI stated that factors such as the government’s cuts to subsidies for prescription medicines and its pro-generics stance will conspire to lower annual growth rates going forward. Presently, pharmaceutical expenditure is 1.8% of the country’s gross domestic product and BMI predicted that through to 2015 the five-year compound annual growth rate will be 0.7%. However, soon after BMI published these gloomy estimates, they revised them down further. The 11 March earthquake and tsunami that devastated a large part of northeastern Japan led the firm to downgrade its pharmaceutical market forecast to take into account the impending economic slowdown.

“The majority of the report’s content is still applicable, but we have lowered our 2020 sales predictions by 1.5% (from $91.7 billion to $90.3 billion), which reflects a change in the country’s overall macroeconomics now that the full extent of the recent disaster is known,” says Jamie Davies, BMI analyst and report author. “To improve their overall outlook for growth, the country’s pharmaceutical companies need to look more to emerging markets, such as China.”

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