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BioJapan.de
a Historical Overview of the Japanese Pharmaceutical Industry
Context
- 1600-1868 Tokugawa Sogunate / Edo Period
- The Tokugawa shoguns kept Japan free of foreign influence in order to keep out Christian missionaries who were seen as the scouts of the colonial powers. Foreigners were denied entry and Japanese were denied overseas travel at penalty of death. Only a small Dutch trading post near Nagasaki was authorized and allowed a tinly trickle of Western knowledge into Japan.
The resulting technological backwardness of the Japanese military was the reason why in 1853, Commodore Perry, with just a few modern ships, could force the country to open to trade with the United States. This shameful desacrated the Shogunate and triggered its fall a few years later.
A slow shift of wealth and power from the top of the social hierarchy, the aristocracy, to the bottom of the hierarchy, the merchant class, was already obvious in the late Edo time. Trading houses and producing industries brought wealth to the cities.
The first of today's pharmeceutial leaders were established as small family business in this period, mostly trading herbal medicine.
- 1868-1912 Meiji Period
- Emperoro Meiji and the politicians behind him who took power implemented nothing short of a cultural revolution: A rapid and comprehensive Westernization of politics, social life and the sciences (medical, in particular). Rapid industrialization and thurst for raw materials lead to the domination of the military and a series of expansionary wars (1904-05 Russian war, 1910 annexation of Korea, 1914 entry into world war 1, 1937 war with China (Mandshuria), 1941 Pearl Harbor). World war 2 left Japan devastated by American bombs, 1945.
The medicine traders turned to importing new drugs and, step by step, build production plants to manufacture generic drugs.
- 1946-today Post War
- The American occupation aims to build a democratic and prosperous country in order to gain an ally against communist Russia. Under the LDP (liberal democratic party), Japan managed to industrialize, first immitating the West in the 1970s, then taking over the lead in the electronics and other industries in the 1980s. The 1990s were characterized by a stubborn stuckness of the political and financial system. There are voices which say that the LDP is too bogged down between old interests and obligation to be able to turn around and give the country the overhaul it needs to become innovative again. Parts of the LDP now seem to be genuinely willing to implement painful reforms. As the LDP is unlikely to lose elections very soon, we are now witnessing the attempt of a political turnaround by the party in power.
In the somewhat malnurished post-war Japan, vitamins became a cornerstone of the pharmaceutical production. While the emphasis remained on generic drugs, Japanese companies soon started to install their own research centers and, step by step, to develop original and innovative drugs. Fermentation technology and microbiology became a particular strongpoint of the Japanese food and drug industry and remained so until today. Proprietary R&D gained momentum over generica production particularly in the 1980s and gave rise to voices calling for appropriate protection of intellectual property. Accordingly, the patent laws were brought up to international standards in 1993.
While globally competitive industries became open to the global market, pharma remained closed and protected. A generous national health insurance bestowed large profits on the pharmaceutical firms which were stacked away in the banks and make a precious warchest which is waiting to be used today to invest into new technologies and globalization. With a huge but shrinking pharmaceutical market (due to budget reductions in the national health insurance) and intensifying competition, Japanese companies have realized that they must quickly learn to play the global game: They have departed from their generalist approach and are strengthening their core competence and their global reach. M&A activity is high in Japan and across borders.
Examples
Some companies have English information on their corporate history. A few are well done and, with the above dates in mind, should give you a feeling of the general history of the industry. Other companies provide bare tables of numbers.
(in order of company size)
Oct. 21, 2001 by Armin Rump