Japanese Biopharma Sector Basic policy 2026: Aim for 9.6% growth in the patented drug market

Research evidence excerpt

Japanese Biopharma Sector Basic policy 2026: Aim for 9.6% growth in the patented drug market

Global Research

22 July 2026ab

Japanese Biopharma Sector Equities

JapanBasic policy 2026: Aim for 9.6% growth in the

patented drug market Pharmaceuticals

Atsushi Seki

Analyst

atsushi.seki@ubs.com

A key issue to monitor in the year-end drug pricing revision discussions will be +65 6495 6860

the treatment of market expansion repricing

Tomoko Yoshihara

The Cabinet Office approved the Basic Policy 2026 on July 21 and we wanted to provide Analyst

the implications for the pharmaceutical sector. We view the policy as mildly positive for tomoko.yoshihara@ubs.com

companies with exposure to infectious diseases and immunoglobulins, such as Shionogi +81-3-5208 6212

and Meiji Holdings. For other pharmaceutical companies, however, we remain neutral, Rei Ihara

as it will be necessary to monitor the year-end drug pricing revision discussions, Analyst

particularly regarding repricing measures. Should measures such as market expansion rei.ihara@ubs.com

repricing be relaxed, a key regulatory risk would be reduced, which would likely have a +81-3-5208 6227

positive impact on investor sentiment and, potentially, lower the sector's cost of capital. Mark Yokoyama

Abolishing market expansion levy alone will not deliver 9.6% growth mark.yokoyama@ubs.com

Japan's prescription pharmaceutical market totalled approximately ¥11.7tn ($73bn) in +81-3-5208 6265

2025 and has continued to expand at a modest pace of around 1–2% annually. While

the patented pharmaceutical market in the G7 excluding Japan is growing at a CAGR of

9.6%, Japan's growth rate stands at only 5.3%, indicating a persistent lag behind

overseas markets. In our view, improving the attractiveness of the Japanese market and