Absorbing the Impact of Drug Price and Dispensing Fee Revisions and Returning to a Growth Trajectory

「For the fiscal year under review, despite higher personnel expenses due to salary increases and other factors and a year-on-year decline in prescription volume at existing stores in the community pharmacy segment, owing to a decline in patients with acute conditions and other factors, revenue increased 8.0% year on year to ¥132,186 million, operating profit increased 5.0% to ¥3,313 million, and ordinary profit increased 1.0% to ¥3,193 million, supported by an increase in new members in the pharmaceutical network segment and improved profitability in the pharmaceutical logistics segment, which began operations in the previous fiscal year.」

「During the consolidated fiscal year, new memberships in the pharmaceutical network division progressed steadily. However, due to the decline in prescription volumes at existing stores in the community pharmacy division, higher pharmaceutical procurement prices and wage increases, among other factors, net sales were ¥122,387 million, up 6.1% year on year; operating profit was ¥3,154 million, down 17.7%; ordinary profit was ¥3,162 million, down 17.3%; and profit attributable to owners of the parent was ¥1,262 million, down 32.2%.」

「During the current interim consolidated period, new memberships in the pharmaceutical network division progressed steadily. However, due to the decline in prescription volumes at existing stores in the community pharmacy division, higher pharmaceutical procurement prices and wage increases, among other factors, net sales were ¥59,761 million, up 5.8% year on year; operating profit was ¥1,027 million, down 40.0%; ordinary profit was ¥1,020 million, down 39.7%; and interim profit attributable to owners of the parent was ¥207 million, down 76.0%.」

「During the second quarter of the current consolidated cumulative period, in the community pharmacy division, prescription prices declined due to the expiry of transitional measures for regional support system add-on fees, among other factors. However, the number of prescriptions filled increased due to reduced concern about seeking medical care following the reclassification of COVID-19 as a Class 5 infectious disease, outbreaks of multiple respiratory infections, and the effects of digital transformation initiatives such as LINE-based prescription transmission and follow-up during medication periods. As a result, net sales were ¥56,461 million, up 5.9% year on year; operating profit was ¥1,712 million, up 55.7%; ordinary profit was ¥1,692 million, up 36.2%; and quarterly profit attributable to owners of the parent was ¥861 million, up 71.5%.」

「During the first quarter of the current consolidated cumulative period, in the community pharmacy division, prescription prices declined due to mid-period revisions to drug prices and the expiry of transitional measures for regional support system add-on fees, among other factors. However, the number of prescriptions filled increased as concerns about seeking medical care eased following the reclassification of COVID-19 as a Class 5 infectious disease. New memberships in the pharmaceutical network division also remained generally steady. As a result, net sales were ¥27,656 million, up 5.2% year on year; operating profit was ¥451 million, up 29.4%; ordinary profit was ¥410 million, up 4.6%; and quarterly profit attributable to owners of the parent was ¥148 million, up 62.8%.」

「During the first 3 quarters of the current consolidated cumulative period, in the community pharmacy division, prescription prices declined due to the impact of the April 2022 revisions to drug prices and dispensing fees. However, stores acquired through new openings and M&A contributed to performance, and new memberships in the pharmaceutical network division remained steady. As a result, net sales were ¥81,878 million, up 2.5% year on year. On the profit side, due to the implementation of the revisions to drug prices and dispensing fees in the community pharmacy division and higher labour costs associated with strengthening face-to-face services, operating profit was ¥2,344 million, down 23.5%; ordinary profit was ¥2,499 million, down 28.3%; and quarterly profit attributable to owners of the parent was ¥1,195 million, down 44.3%.」

「On the profit side, due to the implementation of the revisions to drug prices and dispensing fees in the community pharmacy division and higher labour costs associated with strengthening face-to-face services, operating profit was ¥1,099 million, down 40.9%; ordinary profit was ¥1,242 million, down 44.4%; and quarterly profit attributable to owners of the parent was ¥502 million, down 64.9%.」

「During the first quarter of the current consolidated cumulative period, in the community pharmacy division, prescription prices declined due to the impact of the April 2022 revisions to drug prices and dispensing fees. However, stores acquired through new openings and M&A contributed to performance, and new memberships in the pharmaceutical network division remained steady. As a result, net sales were ¥26,299 million, up 1.5% year on year. On the profit side, due to the implementation of the revisions to drug prices and dispensing fees in the community pharmacy division and higher labour costs associated with strengthening face-to-face services, operating profit was ¥348 million, down 47.7%; ordinary profit was ¥392 million, down 58.1%; and quarterly profit attributable to owners of the parent was ¥91 million, down 84.4%.」

「Net sales were ¥106,685 million, up 2.3% year on year; operating profit was ¥3,852 million, up 12.3%; and ordinary profit was ¥4,313 million, up 24.0%. All profit measures reached new record highs.」

「During the first 3 quarters of the current consolidated cumulative period, new memberships in the pharmaceutical network division remained steady. In the dispensing pharmacy division, although prescription prices declined, the number of prescriptions filled recovered to a certain extent. As a result, net sales were ¥79,868 million, up 2.2% year on year; operating profit was ¥3,063 million, up 10.5%; and ordinary profit was ¥3,485 million, up 25.8%.」

「During the second quarter of the current consolidated cumulative period, new memberships in the pharmaceutical network division remained steady. In the dispensing pharmacy division, although prescription prices declined, the number of prescriptions filled recovered to a certain extent. As a result, net sales were ¥52,169 million, up 2.2% year on year; operating profit was ¥1,862 million, up 37.4%; and ordinary profit was ¥2,235 million, up 60.0%.」

「During the first quarter of the current consolidated cumulative period, new memberships in the pharmaceutical network division remained generally steady. In the dispensing pharmacy division, although prescription prices declined, the number of prescriptions filled recovered to a certain extent. As a result, net sales were ¥25,914 million, up 3.0% year on year; operating profit was ¥667 million, compared with an operating loss of ¥61 million in the year-earlier period; ordinary profit was ¥935 million, compared with an ordinary loss of ¥62 million; and quarterly profit attributable to owners of the parent was ¥583 million, compared with a quarterly loss attributable to owners of the parent of ¥201 million.」

「During the consolidated fiscal year, new memberships in the pharmaceutical network division remained generally steady, while the number of prescriptions filled in the dispensing pharmacy division declined due to patients refraining from seeking medical care because of the COVID-19 pandemic, among other factors. On the profit side, although the dispensing pharmacy division was affected by the decline in prescriptions filled, efforts to promote the switch to generic drugs, for which stable supply was secured and which offered economic benefits, as well as to improve operating efficiency and productivity and reduce expenses, resulted in operating profit of ¥3,429 million, up 112.3%, and ordinary profit of ¥3,479 million, up 123.0%.」

「On the profit side, although the dispensing pharmacy division was affected by the decline in prescriptions filled, efforts to promote the switch to generic drugs, for which stable supply was secured and which offered economic benefits, as well as to improve operating efficiency and productivity and reduce expenses, resulted in operating profit of ¥2,773 million, up 125.7%, and ordinary profit of ¥2,770 million, up 129.2%.」

「On the profit side, although the dispensing pharmacy division was affected by the decline in prescriptions filled, efforts to promote the switch to generic drugs, for which stable supply was secured and which offered economic benefits, as well as to improve operating efficiency and productivity and reduce expenses, resulted in operating profit of ¥1,355 million, up 70.1%; ordinary profit of ¥1,397 million, up 78.1%; and quarterly profit attributable to owners of the parent of ¥578 million, up 165.1%.」

「However, in the dispensing pharmacy division, although the increase in long-term prescriptions raised the average prescription price, the number of prescriptions filled fell sharply due to patients refraining from seeking medical care because of the COVID-19 pandemic, among other factors. As a result, net sales were ¥25,162 million, down 1.7% year on year; operating loss was ¥61 million, compared with operating profit of ¥334 million in the year-earlier period; and ordinary loss was ¥62 million, compared with ordinary profit of ¥323 million in the year-earlier period.」

「During the first 3 quarters of the current consolidated cumulative period, new memberships in the pharmaceutical network division progressed steadily, while stores acquired through M&A in the dispensing pharmacy division contributed to performance and existing-store sales performed well. As a result, net sales were ¥78,943 million, up 8.5% year on year; operating profit was ¥1,228 million, up 18.1%; and ordinary profit was ¥1,208 million, up 19.6%.」

「During the second quarter of the current consolidated cumulative period, new memberships in the pharmaceutical network division progressed steadily, while stores acquired through M&A in the dispensing pharmacy division contributed to performance and existing-store sales performed well. As a result, net sales were ¥52,216 million, up 9.8% year on year; operating profit was ¥796 million, up 67.1%; ordinary profit was ¥784 million, up 78.9%; and profit attributable to owners of the parent was ¥218 million, up 82.2%.」

「During the first quarter of the current consolidated cumulative period, new memberships in the pharmaceutical network division progressed steadily, while stores acquired through M&A in the dispensing pharmacy division contributed to performance and existing-store sales performed well. As a result, net sales were ¥25,599 million, up 7.3% year on year; operating profit was ¥334 million, up 57.6%; and ordinary profit was ¥323 million, up 67.7%.」

「On the profit side, due to the impact of the April 2018 revisions to drug prices and dispensing fees, among other factors, operating profit was ¥1,428 million, down 54.8%; ordinary profit was ¥1,501 million, down 53.8%; and profit attributable to owners of the parent was ¥462 million, down 54.7%.」

「During the first 3 quarters of the current consolidated cumulative period, the pharmaceutical and related network business, the Group’s core business, performed well, and stores acquired through new openings and M&A in the dispensing pharmacy business contributed to performance. As a result, net sales were ¥72,754 million, up 3.2% year on year. On the profit side, due to the impact of the April 2018 revisions to drug prices and dispensing fees, among other factors, operating profit was ¥1,040 million, down 54.5%; ordinary profit was ¥1,010 million, down 56.7%; and profit attributable to owners of the parent was ¥372 million, down 60.6%.」

「During the second quarter of the current consolidated cumulative period, the pharmaceutical and related network business, the Group’s core business, performed well, and stores acquired through new openings and M&A in the dispensing pharmacy business contributed to performance. As a result, net sales were ¥47,560 million, up 2.2% year on year. On the profit side, due to the impact of the April 2018 revisions to drug prices and dispensing fees, among other factors, operating profit was ¥476 million, down 62.5%; ordinary profit was ¥438 million, down 65.5%; and profit attributable to owners of the parent was ¥119 million, down 67.0%.」

「During the first quarter of the current consolidated cumulative period, the pharmaceutical and related network business, the Group’s core business, performed well, and stores acquired through new openings and M&A in the dispensing pharmacy business contributed to performance. As a result, net sales were ¥23,856 million, up 2.2% year on year. On the profit side, due to the impact of the April 2018 revisions to drug prices and dispensing fees, among other factors, operating profit was ¥212 million, down 64.2%; ordinary profit was ¥192 million, down 67.3%; and profit attributable to owners of the parent was ¥101 million, down 65.1%. Although this represented higher revenue and lower profit year on year, performance was progressing steadily and ahead of the initial plan.」

「During the consolidated fiscal year, the pharmaceutical and related network business, the Group’s core business, performed well. Existing stores in the dispensing pharmacy business also performed well, and newly opened stores and stores acquired through M&A contributed to performance. As a result, net sales were ¥93,977 million, up 5.8% year on year; operating profit was ¥3,163 million, up 49.7%; ordinary profit was ¥3,250 million, up 54.1%; and profit attributable to owners of the parent was ¥1,022 million, up 78.8%.」

「During the first 3 quarters of the current consolidated cumulative period, the pharmaceutical and related network business, the Group’s core business, performed well. Existing stores in the dispensing pharmacy business also performed well, and newly opened stores and stores acquired through M&A contributed to performance. As a result, net sales were ¥70,530 million, up 6.5% year on year; operating profit was ¥2,288 million, up 80.7%; ordinary profit was ¥2,334 million, up 84.4%; and profit attributable to owners of the parent was ¥944 million, up 184.6%.」

「During the second quarter of the current consolidated cumulative period, the pharmaceutical and related network business, the Group’s core business, performed well. In the dispensing pharmacy business, prescription volumes and prices at existing stores performed well, and newly opened stores and stores acquired through M&A contributed to performance. As a result, net sales were ¥46,552 million, up 7.3% year on year; operating profit was ¥1,271 million, up 131.5%; ordinary profit was ¥1,272 million, up 134.6%; and profit attributable to owners of the parent was ¥363 million, up 447.2%.」

「As the company progressed in responding to the revision to dispensing fees, among other factors, the year-on-year rate of profit decline narrowed quarter by quarter throughout the consolidated fiscal year, indicating that performance was on a recovery trajectory.」

「While appropriately responding to the April 2016 revision to dispensing fees, the Group is promoting initiatives including home healthcare and the exercise of functions as a family pharmacy and pharmacist, as a community pharmacy supporting local residents’ health in various ways. During the first 3 quarters of the current consolidated fiscal year, although prescription prices declined, newly opened stores and stores acquired through M&A contributed to performance. As a result, net sales were ¥60,820 million, up 0.5% year on year. On the profit side, operating profit was ¥1,469 million, down 37.8%, due to the impact of the April 2016 revisions to drug prices and dispensing fees, among other factors. As the company progressed in responding to the revision to dispensing fees, the rate of profit decline from the year-earlier period narrowed compared with the first 2 quarters of the current consolidated fiscal year.」

「During the second quarter of the current consolidated cumulative period, the pharmaceutical and related network business, the Group’s core business, performed steadily. In the dispensing pharmacy business, although prescription prices declined due to the impact of the April 2016 revisions to drug prices and dispensing fees, newly opened stores and stores acquired through M&A contributed to performance. As a result, net sales were ¥43,401 million, up 3.1% year on year. On the profit side, due to the impact of the revisions to drug prices and dispensing fees and the absence of the one-time gain on the sale of property held for sale recorded in the second quarter of the previous consolidated cumulative period, operating profit was ¥549 million, down 68.7%, ordinary profit was ¥542 million, down 69.0%, and profit attributable to owners of the parent was ¥66 million, down 91.4%.」

「During the first quarter of the current consolidated cumulative period, the pharmaceutical and related network business, the Group’s core business, performed steadily. In the dispensing pharmacy business, although prescription prices declined due to the impact of the April 2016 revisions to drug prices and dispensing fees, newly opened stores and stores acquired through M&A contributed to performance. As a result, net sales were ¥21,495 million, up 0.9% year on year.」

「The company aims to absorb the impact of revisions to drug prices and dispensing fees at an early stage and return to a growth trajectory, while」