Market Overview

As observed in the previous fiscal year, people who delayed medical care during the pandemic are returning to doctors' offices in FY2023. Due to an increase in the number of prescriptions filled, coupled with the new openings of pharmacies including those acquired through M&A, more dispensing pharmacy companies are expected to recover sales in FY2023.

Noteworthy Topics

Companies Actively Develop Other Businesses to Reinforce Business Foundation

In view of the outlook for downward adjustment of prescription dispensing fees, dispensing pharmacy companies are embarking on developing new business pillars to establish stronger business foundation.

Dispensing pharmacy companies place importance on three aspects when expanding to a new business. They develop new businesses that are 1) related to, or derived from, dispensing business; 2) compatible with the demand of the times/market; and 3) can expect synergistic effect with dispensing business.
Based on these perspectives, dispensing pharmacy companies are developing businesses such as 1) sales of dietary supplement and cosmetics, 2) medical professional staffing and placement business [medical professional refers to pharmacists, nurses, etc.], 3) nursing care business including servicing and product sales, 4) servicing long-term care facilities such as group homes and daycare facilities for elderly, 5) medical-related business such as operating clinical trial facilities, and 6) manufacturing and sales of generics. 

Future Outlook

As evidenced in the last few years that changes in the market are associated with the revision of prescription dispensing fees, the domestic dispensing pharmacy market is bound for reflecting the "Pharmacy Vision for Patients" (by MHLW).
Going forward, pharmacies may be classified by function into three categories, i.e., "primary care pharmacies (family pharmacists, family pharmacies)", "pharmacies that play a role in providing home medical care within the integrated community care system and in centralization/continuation of medication information management", and "pharmacies that can handle special dispensing that requires a high level of expertise".

The guideline imposes all pharmacies to become "primary care pharmacies (family pharmacists, family pharmacies)" at the minimum. Meanwhile, on-site pharmacies (dispensing pharmacies located on hospital premises) will develop into "pharmacies with advanced pharmacology management function" that can "handle special dispensing that requires a high level of expertise", and presumably increase in numbers. We believe that dispensing pharmacy companies will continue with the store rollout strategy from the standpoint of enhancing patients’ convenience and supporting the integrated community care system.

Research Outline