Healthcare Research Suggests More Growth in the Offing

Japan’s efforts to recreate its healthcare funding system provides at least one reason behind the ongoing bull market in healthcare and biotech.

Japan is creating a new National Institute of Health (NIH) that follows the U.S. funding model for the healthcare industry. That is good news for drug and medical device companies that may now have easier access to funds and for the entire healthcare industry in Japan as a whole, which has been stalled for a couple of decades.

In researching Japan’s healthcare industry, we have found that Japan needs a more efficient funding and approval mechanism drug and device developers. Japan is the second largest drug market in the world but it takes a long time for drug companies to get their products through the regulators and into the hands of patients. At times, it is years before patients in Japan have access to the latest products that patients in the U.S. and Europe have access to.

This is likely to change this year. As is many other countries, Japan has fingered healthcare and biotechnology as a key industry integral for its rapid growth. The government of Shinzo Abe is counting on its efforts to spur investments in healthcare and biotechnology as one of its pillars for future economic growth.

And Japan is hardly the only country doing this. Mainland China is also pushing forward with investments in healthcare and biotechnology. So are Indonesia, Singapore, Taiwan, Malaysia and Thailand, and that is just in Asia. Countries in Latin America are also looking to attract more investment in this space.

All these investments at the national level around the world have been key to creating one of the greatest bull markets in pharmacutical and healthcare stocks in decades. And there is little reason to think that will change any time soon.