Successful Product Launches in Japan
Japan presents huge opportunities for new product launches, but Western companies often squander them, failing to understand the unique aspects and requirements of the market. They often mis-estimate the size of commercial opportunities in Japan because of the differences in epidemiology and medical practice or run into pricing problems because they've chosen the wrong local comparator product or ignored the Japanese tendency to prescribe lower doses of products. But Westerners can do better--taking advantage, for example, of the liberalization of development rules and even the possibility of DTC advertising.
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It's now official: the Japanese drug industry is succumbing to consolidation. The only question is whether the consolidators will be Western companies or the Japanese themselves. The latest and least unexpected transaction: Merck & Co. Inc.'s takeover of the remaining 49% of Banyu Pharmaceutical Co. Ltd. it didn't already own, in a $1.52 billion tender offer.
Roche and Chugai have entered new dealmaking territory. This is the first time a Western company has taken over a Japanese counterpart in one go, and on a friendly basis. The deal grants Chugai enough independence for it to save face, while allowing Roche to leapfrog into the top ten in Japan. As such, the deal should in theory provide a template for others. But in Japan few CEOs are as open-minded as Chugai's leader. Equally, few Western companies can boast Roche's aptitude for arm's-length management.
Most western drug firms have shunned the Japanese market, regarded as highly problematic. But short on new products and with diminishing returns on investment at home, many are now taking a fresh look at the world's second largest health care market.