Earnings Pressure on the Pharmaceutical Business from Drug Price Revisions

「In the pharmaceuticals segment, sales of core products, including clobetasol propionate ester “Iwaki,” for which demand for generic drugs is high as an alternative to branded products, remained strong. However, sales of some products were sluggish due to restrictions on manufacturing capacity and raw material supplies, and overall revenue remained solid. Meanwhile, raw material costs and expenses increased due to inflation, resulting in lower profit.」

「Profit remained sluggish, owing to the impact of lower selling prices following the April 2025 drug price revision, as well as increases in raw material costs and contract manufacturing costs.」

「Sales of generic drugs whose prices had become equal to or higher than those of brand-name drugs due to the drug price revision declined. In addition, some products whose raw material supplies had been suspended due to shortages and other factors remained affected because manufacturing had not fully resumed. Overall, however, revenue and profit remained solid.」

「In the April 2024 drug price revision, some products were designated for repricing of unprofitable products and as essential medicines, resulting in a substantial increase in operating profit.」

「In the April 2024 drug price revision, some products were designated for repricing of unprofitable products and as essential medicines, resulting in a substantial increase in operating profit.」

「Profitability declined because prescription drug companies cannot immediately pass higher raw material and energy costs through to selling prices.」

「Profitability declined because prescription drug companies cannot immediately pass higher raw material and energy costs through to selling prices.」

「Meanwhile, profitability declined due to the impact of soaring raw material and utilities costs.」

「In addition, securing earnings has become increasingly difficult due to sharp rises in raw material and energy costs caused by consecutive drug price revisions in April this year, following last year’s revision, as well as the weaker yen and other factors.」

「In the prescription drug field, operating profit remained sluggish, partly due to higher costs of various kinds.」

「In the pharmaceuticals business, difficult market conditions have continued, including the leveling off of measures to promote generic drug use, loss of confidence stemming from health damage caused by generic drugs in December the year before last, and restrictions on MR visits due to COVID-19. In addition, securing earnings has become increasingly difficult due to sharp rises in raw material and energy costs caused by consecutive drug price revisions in April this year, following last year’s revision, as well as the weaker yen and other factors.」

「In the prescription drug market, the operating environment became increasingly challenging due to drug price revisions in April last year and this April, the prolonged state of emergency declared in response to COVID-19, and the leveling off of the effects of government measures to promote generic drug use. Meanwhile, demand for COVID-19-related products continued to expand in the over-the-counter drug market.」

「The prescription drug market was affected by drug price revisions in October last year and April this year, as well as reduced visits to medical institutions due to the spread of COVID-19.」

「In the pharmaceutical raw materials market, many generic drug manufacturers were reducing inventories and holding back on purchases ahead of the drug price revision accompanying the October revision to the Consumption Tax Act. In addition, intermediate production in China came to a halt following an explosion in Jiangsu Province, leaving some Japanese raw material manufacturers unable to produce. The industry as a whole remained sluggish.」

「Operating profit also increased substantially as the corticosteroid-antibiotic combination was designated as an essential medicine, offsetting the impact of the April 2018 drug price revision, together with growth in core products.」

「Operating profit also increased substantially as the designation of the corticosteroid-antibiotic combination as an essential medicine offset the impact of the April 2018 drug price revision, in addition to growth in sales of core products.」

「Amid an increasingly challenging environment due to annual drug price revisions and other factors, we have pursued efforts to obtain designations as essential medicines and for repricing of unprofitable products, with the aim of ensuring stable supply and improving profitability over the long term.」

「Operating profit increased substantially as the corticosteroid-antibiotic combination was designated as an essential medicine, offsetting the impact of the April drug price revision, together with growth in core products.」

「As a result, sales of the main topical preparations, led by corticosteroids and antifungal agents, remained strong. However, affected by customers' inventory adjustments associated with the drug price revision, revenue was broadly flat year on year, while operating profit remained weak.」

「Although prescription pharmaceuticals were negatively affected by the drug price revision in April, the generic pharmaceuticals market continued to expand, supported by the government's measures to promote the use of generic pharmaceuticals.」

「In the pharmaceuticals field, amid a challenging environment following the drug price revision in April, we pursued active information-provision activities at dispensing pharmacies, DPC hospitals and other medical institutions, focusing mainly on key topical preparations.」