Japan sales of global pharmaceutical companies fall in 2016

Pharma Japan surveyed earnings data for 12 major foreign drug makers, using the Japanese government's official gazette for all of the companies except Pfizer (US), for which the source used the company's financial earnings report.

According to the source, the combined Japan sales of the 12 surveyed companies came to JPY2,647.8 billion (USD23.5 billion), down 6.7% y/y. However, it is worth noting that the survey did not include Gilead Sciences (US), nor Janssen Pharmaceutical (a unit of J&J, US), which does not disclose its Japanese earnings. Using data from QuintilesIMS, Pharma Japan estimates that the combined sales of 14 pharmaceutical multinationals including Gilead Sciences and Janssen would still amount to a fall in total sales of 0.6% y/y.

In comparison, Pharma Japan estimated that the combined total domestic sales growth of 24 surveyed Japanese pharmaceutical companies was flat in 2016, thereby outperforming foreign drug makers' sales performance.

Seven of the 12 surveyed foreign drug makers saw their Japanese sales fall in 2016, with Sanofi (France) and Bristol-Myers Squibb (BMS; US) experiencing double-digit decreases year on year (y/y). Sanofi's fall in Japanese sales was due in part to the patent expiry of its antiplatelet treatment Plavix (clopidogrel), while BMS's 33.2% fall in Japanese sales y/y came after sales peaked for its hepatitis C combination treatment Daklinza (daclatasvir)/Sunvepra (asunaprevir).

Out of the surveyed foreign drug makers, Pfizer experienced the biggest fall in sales y/y in 2016, with the source adding that the company's Japan sales dipped below JPY500 billion for the first time since 2010. This was due to increased generic competition against Pfizer's off-patent originators. The National Health Insurance (NHI) price of Pfizer's pain treatment Lyrica (pregabalin) also fell by 11.9% in April 2016 as part of a market expansion re-pricing, following a similar re-pricing in April 2012.

In addition, Merck Sharp & Dohme (US)'s total Japan sales fell by 5.6% y/y in 2016, due in part to a 6.1% fall in sales of its type 2 diabetes treatment Januvia (sitagliptin).

Outlook and implications

Although pricing pressure is expected to continue in Japan for off-patent originators, and Japanese drug-pricing policy talks are expected to increase this pressure across the board in the medium term, some bright spots remain for individual treatments and companies.

For Bayer, sales growth in Japan is expected to be maintained by healthy sales of its anticoagulant Xarelto (rivaroxaban) as well as ophthalmic treatment Eylea (aflibercept).

In addition, despite marking the largest fall in Japanese sales among the surveyed companies, Bristol Myers-Squibb is expected to see continued rapid sales of its anticoagulant Eliquis (apixaban). Merck is also expected to see continued sales growth from its PD-1 inhibitor Keytruda (pembrolizumab), which recently received MHLW approval for priority review for the additional indication of bladder cancer, as well as from its HCV combination treatment Erelsa (elbasvir)/Grazyna (grazoprevir; see Japan: 28 June 2017: Japan's MHLW grants priority review to Merck Sharp amp; Dohme's Keytruda for urothelial cancer)).

However, challenges also remain. Pfizer, for example, is expected to face a challenging year, with Pharma Japan citing the president of the company's Japanese unit, Ichiro Umeda, as saying Pfizer Japan hopes to "come out even". In addition, Boehringer Ingelheim is expected to see a significant increase in competition for its hypertension drug Micardis (telmisartan).