Astellas Pharma is a global pharmaceutical company that develops therapies in the areas of urology, transplantation, oncology and immunology. Most of its sales are in Japan with a significant amount in the America's and Europe. The company also has significant operations in Asia and 40 other countries. However, with such a global presence the company is susceptible to many different regulatory environments and pricing pressures.
For the fiscal year 2010 (ending March 31, 2011) the company had net sales of 953.9 billion yen, down 2.2% from 2009. This was due to drug price revisions by Japan's National Health Insurance System (NHI), generic drugs that have been released in the market and the fact that the exchange rate rose by ¥7 and ¥18 against the U.S. dollar and the euro, respectively.
The 9.0 earthquake in Japan on March 11, 2011, damaged many Astellas facilities. Damages just for the FY2010 (only the rest of March 2011) incurred costs totaling ¥3.0 billion for earthquake-related damage.
Expanding its presence in oncology therapies, in June 2010 Astellas completed the acquisition of OSI Pharmaceuticals (OSIP) for $4 billion. The acquisition gave Astelllas access to additional marketed medications and a robust R&D pipleline. This included the high revenue drug Tarceva, a leading oncology medication.
Across the globe Astellas faces downward pricing pressures by governments and health insurance companies, while also battling increasingly cheap generics that compete with its branded therapies.
This is especially difficult in Japan which has its National Heath Insurance System (NHI). Japan is the world's largest price-controlled market for prescription drugs making it a very difficult environment for companies to navigate. Prices are set by standardized formulas and in some cases on an individual product basis. The Japanese Ministry of Health, Labor, and Welfare (MHLW) sets the reimbursement prices for all newly launched drugs, which are revised every other year, where prices are normally lowered. That means the acceptable price of a drug is lowered every two years, dramatically diminishing profits.
Beginning in 2009, the FDA implemented a series of reforms that included stricter monitoring of drug adverse events, more funding for the agency, stronger ability to force product recalls, more scientific expertise within the agency, and more transparency. Even before 2009 the result has been a much more conservative FDA, demanding more product information.
The various aspects of patent protection and the extremely high costs of researching and developing drugs marks the pharmaceutical industry with high risk and high competitiveness. It is important to keep in mind when considering a comparison of industry players that competition does not arise between each company as a whole, but rather between specific drug areas and their relative advantages in therapeutic treatment. Competitors who compete in similar disease areas as Astellas are listed below.