TOKYO -- Hisamitsu Pharmaceutical's operating profit apparently took a 13% hit for the March-May quarter as cuts to prescription drug prices mandated by the government bruised sales of mainline products.
The drugmaker likely earned around 5 billion yen ($49.2 million) in profit for the quarter on a group basis. Sales are thought to have dipped 2% to 39 billion yen or so, hurt by lower prices of prescription drugs such as the anti-inflammatory Mohrus Tape. The spread of generics likely crimped shipments. Sales of drugs from U.S. subsidiary Noven Phamaceuticals to treat such conditions as attention deficit hyperactivity disorder and menopause were sluggish as well.
Japan adjusts its drug prices every two years or so to curb rising medical costs, taking into account a pharmaceutical's novelty, competitors and other factors. The latest changes went into effect in April. Rules for prescribing medical plasters were changed as well, in principal letting just 70 portions be handed out under each prescription.
Sales of over-the-counter treatments were brisk. The Salonpas line of transdermal painkillers enjoyed a sales pickup abroad as well as domestically, where tourists from overseas provided heavy demand. While a stronger yen has hurt visitors' consumption of luxury goods, that of relatively low-priced pharmaceuticals remains unaffected. New patches less likely to fall off the skin and easier to place on joints have also debuted, helping grow sales of the Salonpas family 10%.
Hisamitsu forecasts sales falling 4% to 155 billion yen for the year ending February 2017, with anticipated 6% revenue growth from the Salonpas line failing to offset lower Mohrus sales. Efforts at Noven to trim promotional costs are seen keeping operating profit on track for 1% growth to 28 billion yen.
The company is due to report March-May earnings July 8.