New pharma companies are surging in Japan, and the Japanese government is trying to get a handle on the industry.
The country is home to about a quarter of the world’s population but the pharma sector is the biggest single employer.
The government hopes the rise of the new players will help it tackle rising drug prices and keep the nation’s economy growing.
The latest trend is a push to make it easier for young people to start companies.
The Health and Welfare Ministry is developing an initiative to boost entrepreneurship, and last year it introduced a tax incentive of 2% for those looking to set up a new company.
Japan’s new companies are expected to have an annual turnover of up to $400 million.
But what are the big names doing?
A group of pharmaceutical companies is currently in the midst of a global expansion spree.
The group includes companies like Japan Pharmaceuticals, Johnson & Johnson, Eli Lilly and Sanofi.
They are also expanding overseas and have launched their own manufacturing plants in Singapore, Germany and China.
The new companies have a strong business plan, and they are betting on a healthy domestic market, said Nobuyuki Hirano, chief executive of the Japan Pharmaceutical Association, which represents about a dozen of the big pharma firms.
The industry is also investing in research and development to ensure the future of medicines.
“We are looking forward to having a healthy environment in which we can develop our medicines in a safe way,” he said.
Other big pharmas are looking to expand in other parts of the globe.
Japan’s Mitsubishi Chemical and its rival Novartis are both building plants in Australia.
The Japanese government plans to set an investment target of $100 billion by 2020.
And some companies are expanding their global operations.
In India, Japan’s Nisshin Pharma is opening a facility in Hyderabad and plans to double its manufacturing capacity to 5 million units by 2021.
It is also planning to expand its overseas operations.
India is home in part to the world market for Japanese pharmaceuticals.
The pharmaceuticals industry employs about 2 million people.
However, India’s pharma industry has been slow to take off, and its share of the global market fell from 6.3% in 2005 to 2.6% in 2013, according to industry body Pharma Europe.
Last year, the Indian government announced a ban on imports of the drugs.