Life Science Overview

Life Science Overview

Life science market to expand due to aging population and digitalization

Japan’s population is aging at a globally unprecedented rate. As of 2020, there are 36.17 million people aged 65 or more, accounting for 28.7% of the total population (the world's highest proportion of the elderly), and is expected to reach 35.3% by 2040 (See Figure 1). Against the backdrop of this “super-aging society”, the public and private sectors are working together to establish a “society of health and longevity”, which means extending each individual's healthy life expectancy. On the other hand, national medical expenses have been increasing every year. In FY 2019-20, the estimated medical expenses reached a record high of 43.6 trillion JPY.

Bar graph showing the trends of Japan's population and the elderly population (65 years old and over) for each decade from 1950 to 2020, and projections for 2030 and 2040. In 1950, the population was 83.2 million, of which the elderly population was 4.11 million. In 1960, the population was 93.42 million, of which the elderly population was 5.35 million. In 1970, the population was 103.72 million, of which the elderly population was 7.33 million. In 1980, the population was 117.06 million, of which the elderly population was 10.65 million. In 1990, the population was 123.61 million, of which the elderly population was 14.93 million. In 2000, the population was 126.93 million, of which the elderly population was 22.04 million. In 2010, the population was 128.06 million, of which the elderly population was 29.48 million. In 2020, the population was 125.86 million, of which the elderly population was 36.17 million. In 2030 (prediction), the population is 119.13 million, of which the elderly population is 37.16 million. In 2040 (prediction), the population is 110.92 million, of which the elderly population is 39.21 million. Created based on data from

Under these circumstances, the number of patients with cancer and other diseases is expected to increase as the number of elderly people increases, and the size of the life science market, including pharmaceuticals and medical equipment, is on the rise. The total size of the domestic pharmaceutical market for prescription drugs (prescribed by medical institutions) and over-the-counter drugs sold to the general public is 11.8 trillion JPY (FY 2019-20). According to IQVIA, Japan’s prescription drug market, which accounts for approximately 90% of its pharmaceutical sales, is the third-largest in the world after China and the U.S. (See Figure 2). In addition, medical equipment sales amounted to 4.3 trillion JPY in FY 2019-20, medical information systems to 485.5 billion JPY in the FY 2019-20 estimate, and nursing care to 10.4 trillion JPY in FY 2018-19, making life science industry in Japan an extremely large market.

Graph showing the prescription drugs market in 2019 and the forecast for 2024. Japan is the world's third largest prescription drug market, with 87 billion USD in 2019 (actual) and 93 billion USD (forecast) in 2024. The United States ranks first, with 510 billion USD (actual) in 2019 and 620 billion USD in 2024. China ranks second, with 142 billion USD (actual) in 2019 and 180 billion USD (forecast) in 2024. No. 4 is Germany, with 52 billion USD (actual) in 2019 and 70 billion USD (forecast) in 2024. And No. 5 is France, with 35 billion USD (actual) in 2019 and 40 billion USD (forecast) in 2024. Created based on data from IQVIA

Moreover, the coronavirus has led to rapid changes in healthcare needs and delivery. Now that people are hesitant about face-to-face consultations, there are particularly high expectations for online medical services. In April 2020, online medical services, which were previously allowed only for follow-up visits and were restricted in terms of target diseases and facility standards, were made available for initial visits as a temporary measure during the pandemic. Subsequently, the Ministry of Health, Labor and Welfare (MHLW) agreed to continue this measure even after the containment of the coronavirus.

In addition to such measures for the coronavirus, there have been major innovations in research and drug discovery to treat cancer and dementia, and the digitalization of healthcare is accelerating due to the successive entry of players from different industries, including Big Tech (GAFA), into the healthcare industry. Furthermore, the domestic healthcare ICT market, including electronic medical interview systems, online medical systems, and cloud-based electronic medical records, is expected to grow. This is mainly due to the promotion of healthcare ICT by the Japanese government and the shift by major vendors of healthcare information systems to cloud service offerings (See Figure 3).

Graph showing the trends and forecasts for domestic medical ICT market size (2018-2023). Market size for FY 2018 (actual) is 12.5 billion JPY. Market size for FY 2019 (forecast) is 14 billion JPY. Market size for FY 2020 (forecast) is 15.4 billion JPY. Market size for FY 2021 (forecast) is 16.9 billion JPY. Market size for FY 2022 (forecast) is 18.4 billion JPY. Market size for FY 2023 (forecast) is 19.8 billion JPY. Created based on data from

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