“Historically, we have seen a dual strategy of focusing on China and the US for emerging innovators in China. However, a series of recent setbacks with approvals in the US, some linked to insufficient clinical data from US populations, has started to bring a shift. Over the next few years, we are likely to see some of these China-based innovators increasingly targeting other markets such as Southeast Asia and Japan as larger priorities – as the likely challenges around representative patient data are far lower,” added Haydock.

In fact, nearly one quarter of global R&D in terms of new drugs and vaccines in development (24%) – up from 21% in 2022 – now takes place in China and the situation continues to accelerate, with the US slightly down at 51% (from 53% in 2022)[1].

According to a Citeline annual analysis, the global R&D pipeline continues to grow – 5.9% in the last year and comprising some 21000+ drugs and vaccines – but innovation is gradually shifting from its historical Western, and US in particular, hegemony. In terms of therapeutic focus, oncology remains the dominant category overall at 41%, but rare diseases at 19.5% and neurology at 13.5% are also prominent.

The shifts in the sites of global biopharma innovation could also create new distribution and regional manufacturing hubs. In terms of Japan itself, Haydock states the innovation space has remained consistently strong, albeit with relatively static growth, and that the reshoring trend we have seen in other markets is happening but has remained more muted. Research-based multinationals continue to be concerned with drug pricing systems in the country.

“There have been some moves away from bulk suppliers from China to diversify supply networks – with both domestic Japanese and international suppliers benefitting – but we have not seen the same response as in other markets,” Haydock added.

The final notable factor affecting APAC is that, unlike in the USA and Europe, where you have fewer very large pharma companies with lots of R&D targets, in Asia and in China, innovators tend to be smaller with fewer products. Here, the pipeline is owned by a more diverse group of innovators and that means a potentially more dynamic supply side as well, with a larger number of supply partners.

In total, some 7,000 executives are expected at CPHI Japan and the exhibition will return to its pre-pandemic prominence for the first time since 2019, with 95 countries in attendance – a rapid turnaround from 2022 when the majority of overseas buyers were unable to attend. The 2023 edition will also mark the event’s 20^th anniversary and will see a number of special events introduced, including an award ceremony to celebrate the companies that have been integral in helping build the pharma industry in Japan.

Jenny Leung, Regional Manager, Informa Markets, commented: “Interest from international audiences about how to enter Japan and find regional suppliers, distributors and manufacturers has never been stronger. What is notable is that this internationalisation is now two-way, with many generic, CDMO and ingredients providers looking to partner in Japan. But simultaneously, we also see increasing numbers of international attendees looking to buy from manufacturers in Japan and the wider region.”

In fact, competition for partners and supply chain resources is increasing quickly, and more than 60% of Japanese companies state their potential partners are ‘approaching them much earlier than before’ according to the CPHI data – with 87% of attendees at the event having purchasing responsibility.