(As of August 2016)
Business conditions in Japan are changing significantly. As part of its policy of curbing medical costs, the government is undertaking biannual National Health Insurance (NHI) drug price revisions, reform of the drug pricing system, repricing for market expansion, and accelerated adoption of generic drugs. Meanwhile, the government is promoting the development of brand-name drugs through a priority review system and the additional allocation of funds to new drug discovery.
As a “Specialty and Generic Pharmaceuticals Company,” the Pharmaceuticals segment will heighten the presence of its brand-name drugs and generic drugs in strategic fields. Further, we will use production bases in Japan and overseas to realize low-cost operations. We will cater to diverse medical needs and sustain growth.
The promotion of appropriate antibiotics use to control antibiotic resistance is curbing improper use of these drugs. Because R&D of antibacterial drugs has become much more difficult, generic drugs have begun to replace long-term listed drugs, and drug prices are being reduced constantly. Accordingly, Japan’s market for systemic antibacterial drugs is shrinking.
Japan's Systemic Antibacterial Drug Market Size*
We increased our presence, and our share of Japan's market for systemic antibacterial drugs rose from fiscal 2014's No. 3 position to the No. 2 position in fiscal 2015.
Sales of MEIACT declined year on year due to generic erosion. Meanwhile, ORAPENEM sales significantly outperformed those of the previous fiscal year.
In fiscal 2016, we will maintain sales of MEIACT and increase those of ORAPENEM and antibacterial generic products.
In a related area, we assumed the sales rights of chronic obstructive pulmonary disease (COPD) drug ULTIBRO in July 2016. We will raise awareness of COPD and offer a variety of medication to meet the needs of patients with respiratory disease.
The Meiji Group's Sales of Drugs for Infectious Diseases
Revenues from some antidepressant drugs and schizophrenia drugs that were once market drivers have decreased due to their replacement by generic drugs and NHI drug price revisions. However, drugs with new pharmacological properties are being marketed, and the number of patients with CNS disorders is rising due to changes in social conditions and working environments. The market is expected to continue growing.
Japan's Antidepressant Drug Market Size*
In fiscal 2015, our share of Japan's antidepressant drug market remained at No. 2 and our presence continued to increase. Sales of antidepressant drug REFLEX grew substantially year on year due to the promotional activities undertaken by medical representatives (MRs).
Regarding combined market share for antidepres-sant drugs and schizophrenia drugs, we aim to achieve the No. 3 position in fiscal 2016 and the No. 1 position thereafter.
In response to growing demand for antidepressant drugs, we will increase sales of REFLEX, which has a unique mechanism of action. In May 2016, we launched schizophrenia drug SYCREST. With rapid absorption and a good safety profile, this drug has the potential to become a new option for the treatment of acute-phase schizophrenia. We will strengthen promotional activities to foster SYCREST as a mainstay among our drugs for CNS disorders. In the CNS disor-ders field, patients have diverse symptoms, making it important to manage disorders by medication with different drug profiles. To increase therapeutic options, we will advance the development of schizophrenia drug Ziprasidone, currently in phase III clinical trials. Also, we will expand and improve the lineup of generic drugs.
The Meiji Group's Sales of Drugs for CNS Disorders
The government's medical costs containment policy accelerates the promotion of generic drugs. To fulfill the target volume, demand for generic drugs is increasing rapidly. On the other hand, the govern-ment has revised the rules for calculating generic drug pricing. Consequently, NHI drug price revisions will have a greater effect on generic drug prices. We must reduce costs and strengthen price competitive-ness while maintaining quality and supply reliability.
Japan's Generic Drug Market Size*
Generic drug sales rose sharply year on year, and we posted the highest sales of generic drugs among brand-name drug companies in Japan.
Mainstay calcium channel blocker AMLODIPINE Tablets Meiji and antibacterial drug SULBACILLIN for Injection Meiji performed favorably. Antibacterial drug TAZOPIPE Combination for I.V. Infusion Meiji, launched in December 2015, and antidepressant drug SERTRALINE Tablets Meiji both contributed to sales growth.
In fiscal 2016, we will maintain our No. 1 position in sales of generic drugs among brand-name drug companies in Japan. We will grow sales of existing products with a focus on AMLODIPINE Tablets Meiji, Alzheimer's therapy drug DONEPEZIL Meiji, and other generic blockbuster products. Also, we will enhance our development pipeline and increase sales. We will procure inexpensive bulk drugs and enhance productivity to heighten cost competitiveness and minimize the effect of NHI drug price revisions.
Our advantages in the generic drugs field are quality assurance, stable product supply, and infor-mation provision on a par with those of brand-name drugs. We will use these advantages to reinforce our leading position. Core hospitals are likely to increase in importance as a part of the regional healthcare system.
Therefore, we will step up promotion activities targeting them to grow sales.
The Meiji Group's Sales of Generic Drugs
In the ASEAN region's pharmaceuticals market, demand is expected to increase as populations rise and the availability of health-care improves. The Meiji Group has production bases in Indonesia, Thailand, and India, which provide favorable access to the ASEAN region. Also, we have the generic drugs sales network of Medreich Limited. Through product lineups optimized for the needs of each country's market, we will increase sales in respective countries and their surrounding countries.
Aiming to reduce manufacturing costs, pharmaceuticals companies are making greater use of contract manufacturing worldwide. The global market for contract manufacturing organization (CMO) is projected to reach US$79.0 billion by 2019*.
It is estimated that this market will expand until 2025. Catering to major global pharmaceuticals companies, Medreich has a strong track record in the CMO business, the contract development and manufacturing organization (CDMO) business, and the manufacture and sale of generic drugs.
* Market size based on Meiji Holdings' research
The export business grew sales of antibacterial drug MEIACT significantly year on year. As for overseas subsidiaries, businesses in Indonesia and Thailand performed favorably. Also, the inclusion of Medreich, of India, as a consolidated subsidiary contributed to business results.
We have bases in China, Indonesia, Thailand, and Spain, which are engaged in the manufacture and sale of pharmaceuticals. We also have businesses in Russia and Vietnam. In the ASEAN region, we will grow sales of our strategic in-house products MEIACT, an antibacterial drug, and ADANT, a hyal-uronic acid injection for arthritis, as well as generic drugs. In emerging countries, there is strong demand for antibacterial drugs, one of our particular strengths. We will provide products with outstanding quality and safety and grow sales in emerging countries.
The strengths of Indian subsidiary Medreich are its CMO and CDMO businesses. The company will con-tinue to grow these businesses as well as operations for the manufacture and sale of generic drugs. Medreich will begin supplying generic drugs to Japan in fiscal 2017. In this initiative, we will invest \2.3 billion, secure the capacity to supply more than 3 billion tablets, and establish a system for stable product supply and quality assurance.