Japan Pharmaceuticals Market Size, Share & Industry Analysis, By Type (Drugs {Prescription & OTC} and Vaccines {Bacterial & Viral}), By Disease Indication (Oncology, Diabetes, Infectious, Cardiovascular, Neurology & Psychiatry, Respiratory, Renal, Obesity, Autoimmune, Ophthalmic, Gastrointestinal, Dermatology, Hematology/Blood, Liver/Hepatology, Genetic, Hormonal/Endocrine, Women’s Health, Reproductive, & Allergies), By Drug Type (Biologics & Biosimilars, and Small Molecules/Conventional Drugs), By Route of Administration, By Age Group, By Distribution Channel, and Country Forecast, 2025-2032

The Japan pharmaceuticals market size was valued at USD 102.17 billion in 2024. The market is projected to grow from USD 110.18 billion in 2025 to USD 206.70 billion by 2032, exhibiting a CAGR of 9.40% during the forecast period.

Japan’s pharmaceutical market is witnessing moderate but stable growth, supported by several factors. Prominent factors include Japan’s aging population driving demand for specific treatments, a growing biosimilars market, increasing healthcare expenditure, and increasing adoption of digital health solutions. Additionally, the strong focus of Japanese pharmaceutical companies on innovation, particularly in oncology and biologics, is further shaping Japan’s pharmaceutical industry.

• For instance, in March 2025, Chugai Pharmaceutical Co., Ltd. introduced LUNSUMIO for intravenous infusion 30 mg and LUNSUMIO for intravenous infusion 1 mg for relapsed or refractory follicular lymphoma in Japan.

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As per the European Federation of Pharmaceutical Industries and Associations, in Japan around USD 11,215 million were spent on pharmaceutical R&D expenditure.

Japan Pharmaceuticals Market Trends

Digital Health & E-Pharmacy Trend is Leading to Significant Market Growth

With rapid technological advances, favorable government policies, and changing consumer preferences, Japan is witnessing a surge in e-pharmacy adoption and digital therapeutics. This is primarily due to the increased online access to medications and telemedicine consultations across multiple healthcare sectors. The shift toward digitalization of healthcare and pharmaceuticals is taking place as Japan faces the challenge of balancing strong government support with technological advancements that will place the country at the forefront of global digital health.

Japan Pharmaceuticals Market Growth Factors

Rapidly Aging Population in Japan to Boost Market Growth

Japan has the oldest population in the world: one-third of its citizens are over 65 years old. This is due to a combination of longer life expectancy and lower birth rates, which results in a greater incidence of age-related illnesses such as dementia and chronic diseases. The higher the prevalence of chronic diseases, more frequent medical attention and specialized geriatric care, is required leading to increased hospitalizations. The confluence of all these factors is anticipated to drive Japan’s pharmaceuticals market growth by increasing demand for medications for various diseases.

• For instance, according to the data provided by the World Economic Forum in September 2023, in Japan more than 1 in 10 individuals are aged 80 or above.

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Japan Pharmaceuticals Market Restraints

Strict Drug Pricing Regulations to Limit Market Growth

Japan has a strict drug pricing system with the government setting reimbursement prices for all drugs listed under the National Health Insurance (NHI). This system ensures universal access to medications at standardized prices across the country. However, this also means that drug manufacturers face downward price revisions, impacting their profitability and potentially affecting R&D investment.

• The average monthly premium for pet insurance was USD 62.44 for dogs and USD 32.21 for cats in 2024 according to NAPHIA.

Japan Pharmaceuticals Market Segmentation Analysis

By Type

Based on type segment, the market is divided into drugs and vaccines.

The vaccines segment captured the notable share of the market in 2024. The dominance is mainly attributed to the high involvement of Japanese manufacturing companies in the collaboration and launches of vaccines to prevent bacterial and viral diseases, increasing the availability and accessibility of such products in the region. Moreover, the constant focus of research institutes on improving research and development facilities in the country anticipates Japan pharmaceuticals market growth.

• For example, in October 2022, The Institute for Vaccine Research and Development (IVReD) was established at the Creative Research Institution at Hokkaido University of Japan. The center is focused on developing vaccines for infectious diseases.

By Disease Indication

On the basis of disease indication, the market is segmented into oncology, diabetes, infectious, cardiovascular, neurology & psychiatry, respiratory, renal, obesity, autoimmune, ophthalmic, gastrointestinal, dermatology, hematology/blood, liver/hepatology, genetic, hormonal/endocrine, women’s health, reproductive, allergies, and others.

The neurology & psychiatry segment accounted for a significant share of the market in 2024 due to high prevalence of neurological disorders such as dementia & Alzheimer’s disease in Japan coupled with rising geriatric population.

• For example, according to the data provided by Alzheimer's Association, the number of individuals living with dementia in Japan is around 4.6 million.

By Drug Type

On the basis of drug type, the market is divided into biologics & biosimilars and small molecules/ conventional drugs.

With a higher penetration of biologics & biosimilars drugs, this segment accounts for a larger proportion of the Japanese market. Strong emphasis on research & development of new therapies coupled and activities to launch advanced pharmaceuticals have fostered segmental growth.

• For example, in December 2024, Takeda Pharmaceutical Company Limited announced the approval for HYQVIA 10% S.C. (Subcutaneous) Injection Set in Japan.

By Route of Administration

Based on route of administration, the market is divided into oral, parenteral, topical, inhalation, and others.

The parenteral segment is anticipated to hold a significant Japan pharmaceuticals market share in 2024. Prominent factors augmenting the segment’s growth include well-equipped hospital infrastructure, perception among the Japanese population that injections are more effective and trustworthy, supportive reimbursement policies, and others. Additionally, launch of new parenteral drugs in the market also support the segment growth.

• For instance, in February 2025, Sanofi announced Japan’s approval for Sarclisa to treat patients with newly diagnosed multiple myeloma.

By Age Group

In terms of age group, the market is segmented into pediatric and adults.

In 2024, the adults segment dominated the Japanese market with a significant share. Japan has the world’s oldest population, with a notable share of the population aged 65 and above. This results in higher prevalence of chronic diseases as this elderly population is more susceptible to various infections and indications. All these factors cumulatively increase the demand for effective medications as older adults often require long-term medication for chronic conditions.

Additionally, to fulfill the growing market demand, pharmaceutical companies are also focusing on introduction of newer, innovative therapeutics especially for adult patients.

• For instance, in November 2024, GSK plc's RSV vaccine - Arexvy was approved by Japan’s regulatory body for the use in adults aged between 50 and 59 with high risk of severe RSV disease.

By Distribution Channel

Based on distribution channel, the market is divided into hospital pharmacies, drug stores & retail pharmacies, and online pharmacies.

The online pharmacies segment is anticipated to witness a significant growth in the coming years. Convenience, safety, and continuity of care through home-delivery offered by online pharmacies have shifted the consumer preference to these settings. Additionally, increasing support for digital transformation in healthcare by the Japanese government along with introduction of new service platforms by operating players also drives the segment growth.

• For instance, in July 2024, Amazon.com Inc. introduced online pharmacy, drug delivery services in Japan. The company has collaborated with around 2,500 drug stores across the country.

List of Key Companies in Japan Pharmaceuticals Market

Astellas Pharma Inc., Takeda Pharmaceutical Company Limited, Otsuka Holdings Co., Ltd., Eisai Co., Ltd., and DAIICHI SANKYO COMPANY, LIMITED are the leading players in the Japan pharmaceuticals market. These companies are focusing on various strategic initiatives such as global expansion, mergers & acquisitions, investments in R&D and new product launches in order to strengthen their market position.

• For instance, in April 2025, Astellas Pharma Inc. signed a strategic collaboration agreement with the Japanese Foundation for Cancer Research to accelerate translational and clinical research in oncology.

Other Japanese companies such as ONO PHARMACEUTICAL CO., LTD., Chugai Pharmaceutical Co., Ltd., and Kyowa Kirin Co., Ltd. have a considerable presence along with other small & medium-sized market players. These companies are actively involved in various strategic moves, which are projected to maintain their market share.

LIST OF KEY COMPANIES PROFILED

• Takeda Pharmaceutical Company Limited (Japan)
• Otsuka Holdings Co., Ltd. (Japan)
• Astellas Pharma Inc. (Japan)
• Eisai Co., Ltd. (Japan)
• DAIICHI SANKYO COMPANY, LIMITED (Japan)
• ONO PHARMACEUTICAL CO., LTD. (Japan)
• Chugai Pharmaceutical Co., Ltd. (Japan)
• Kyowa Kirin Co., Ltd. (Japan)

KEY INDUSTRY DEVELOPMENTS

• June 2025: Eisai Co., Ltd. launched Pariet S – the first proton pump inhibitor from prescription to OTC in Japan. The drug is highly effective in treating stomach pain and severe heartburn caused by gastric acid reflux.
• May 2025: Chugai Pharmaceutical Co., Ltd. received the approval for its Vabysmo Intravitreal Injection 120 mg/mL by the Ministry of Health, Labour and Welfare (MHLW), Japan. It is an anti-VEGF/anti-Ang-2 bispecific antibody indicated to treat choroidal neovascularization associated with angioid streaks.

REPORT COVERAGE

The Japan pharmaceuticals market report provides a detailed and comprehensive analysis of the market. Some of the key insights that the report provides include, the prevalence of key chronic diseases in the country, regulatory overview of pharmaceutical products in Japan, recent industry developments, and new product launches in the market. The research report also includes the key market dynamics that have contributed to the growth of the market across the forecast period. The Japan pharmaceuticals market analysis also encompasses the profiles of the major companies operating in the Japanese market.

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Report Scope & Segmentation