Japanese Pharmaceutical Firms: Players in the European Market?

Abstract

The pharmaceuticals sector ranks among the very few segments of Japanese industry that has yet to make a major mark on the international scene. Competitive advantages which other industries in Japan, such as cars and consumer electronics, have successfully exploited — namely incremental advances in development and production technology, productivity, low-cost manufacturing — are rather less relevant to the development of the pharmaceutical industry. The very structure of the industry mitigates against such competitive advantages: producer firms supply customers but are paid by a third party (the government), creating an insensitivity to price in the demand for drugs which, in turn, all but eliminates corporate considerations of cost and productivity.