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Japan presents a unique landscape for pharmaceutical companies, both domestic and international. The recent study published in Therapeutic Innovation & Regulatory Science sheds light on the disparities in drug development strategies between Japan-based and foreign-based companies, revealing substantial implications for strategic business development.

URL: https://pubmed.ncbi.nlm.nih.gov/38575785/ 

Strategic Divergence and Opportunities

The study highlights that 51.1% of Japan-based companies traditionally adhere to an “only-Japan” strategy, focusing solely on the domestic market. While this approach is beneficial in ensuring tailored therapeutic solutions for the Japanese population, it contributes to a significant “drug lag” when compared to international standards, particularly in markets like the US and EU. The lag is primarily due to delayed initiation of clinical development for licensed-in products, where 79.7% of these products had already been approved in the US or EU.

This presents an opportunity for Japanese pharmaceutical firms to reconsider their development strategies. Japanese companies could expedite product approvals and reduce drug lag by shifting from a predominantly domestic focus to incorporating multi-regional clinical trials (MRCTs) early in the development phase. Engaging in MRCTs not only accelerates the regulatory approval process but also enhances the global competitiveness of Japanese pharmaceuticals.

Licensing Strategies and Global Collaboration

The findings also underscore the strategic missteps in licensing practices among Japanese firms. With a significant number of licensed-in products experiencing extended drug lags, there’s a clear opportunity for improving the timing of licensing decisions. Japanese companies could benefit from more proactive licensing strategies, seeking early-stage partnerships and collaborations with foreign innovators, especially those from emerging pharmaceutical markets not traditionally aligned with the Japan Pharmaceutical Manufacture Association.

Global collaboration could catalyze Japanese firms aiming to diversify their portfolios and reduce dependency on domestic developments. Partnering with foreign entities allows for the sharing of expertise, resources, and market access, which are crucial for innovative drug development and timely market entry.

Implications for International Business Development Professionals

For international business development professionals in the pharmaceutical industry, these insights provide a strategic framework for engaging with Japanese companies. Understanding the nuances of Japan’s pharmaceutical market, including the propensity for domestic-focused strategies and the current challenges with drug lag, is essential. Professionals should foster relationships that advocate for early and strategic licensing, joint ventures, or partnerships that emphasise synchronised global development.

Moreover, encouraging MRCT strategies among Japanese firms could open new avenues for international companies looking to penetrate Japan’s lucrative market while also aiding local companies in expanding their global footprint.


The business landscape in Japan offers both challenges and opportunities for pharmaceutical companies when it comes to Reducing Drug Lag in Japan’s Pharmaceutical Sector. By adopting more globally integrated development strategies and enhancing licensing practices, Japan-based companies can significantly reduce drug lag, benefiting domestic healthcare systems and their international market presence. For international business development professionals, the key lies in promoting collaborative engagements and strategic alliances that leverage both local and global strengths in drug development. This strategic approach not only bridges the gap in drug approval timelines but also positions Japan as a formidable player in the global pharmaceutical industry.

  • We always welcome dialogues regarding your business opportunities within Japan’s pharmaceutical industry.


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