Updated as of October 2005

Healthy Activity Sparked by Merger Fever.

Japan's pharmaceutical industry shipped 7,044 billion yen or $66.5 billion worth of pharmaceutical products in 2003, slightly up by about 3.4 percent from 6,814 billion yen in 2002.

The value of pharmaceutical shipments in Japan grew steadily during the 1990s and 2000s, increasing 20.5 percent from 5,847 billion yen in 1998 to 7,044 billion yen in 2003.

Japan exported 383 billion yen worth of pharmaceutical products in 2004, up 3.7 percent from 369 billion yen in 2003. Overall, Japanese export of pharmaceutical products has seen a remarkable growth, rising by 30.3 percent from 2000 to 2004.

The growth of pharmaceutical product imports in Japan is more remarkable, increasing by almost 50 percent to 769 billion yen in 2004 from 515 billion yen in 2000.

In 2003, there were 1,010 establishments employing some 93,108 people in Japan engaged in manufacturing pharmaceutical products. These numbers have declined while shipment and production values have increased almost 50 percent, indicating healthy growth in productivity.

In spite of the sluggish general domestic economy since the early 1990s, Japan's pharmaceutical industry has shown strong growth in terms of shipments, imports and exports, and consumption, due primarily to the rapid pace of aging and enhanced health consciousness among the general population.

These factors are expected to remain in force in the coming years, and therefore, the pharmaceutical industry in Japan should experience healthy growth while aggressive foreign suppliers continue to make greater inroads into the Japanese market. Hence, acquisition of Japanese pharmaceutical companies will accelerate while consolidation of domestic companies will be further realized as well.

In October 2002, Roche Pharmholding B.V., based in the Netherlands, acquired Chugai Pharmaceutical Co., Ltd., the 11th largest Japanese pharmaceutical company.

In March 2004, Banyu Pharmaceutical Co., Ltd., the 14th largest pharmaceutical company in Japan, was acquired and became a wholly-owned subsidiary of Merck, Inc. a giant American pharmaceutical company.

In January 2005, Yamanouchi Pharmaceutical Co., Ltd., the third largest pharmaceutical company in Japan, merged with the fifth-largest, Fujisawa Pharmaceutical Co., Ltd., to become Astellas Pharma Inc., the second largest pharmaceutical company in Japan. The merger fever is still high and more of the consolidation of pharmaceutical companies, either domestic or international, will be seen in the coming years.