As we face the turn of the century, the U. S. healthcare industry is undergoing many drastic changes including the rapid progress of gene-related research, diffusion of medical information via the Internet, and online distribution of ethical drugs. A variety of specialist companies focusing on a part of the value chain have emerged and prospered within the pharmaceutical industry, contrasting with the traditional, larger, integrated companies. Some pharmaceutical companies are active in adopting new approaches to R&D, capitalizing on information technology and new tools such as High Throughput Screening. Others have made huge investments in innovative marketing such as Direct-to-Consumer advertisingwhich has recently been deregulated and the extensive use of the Internet at the time of new product launches. In the early 1990s, some companies attempted vertical integration into distribution through the acquisition of Pharmacy Benefit Management companies as well as horizontal integration to cover other business lines such as generic drugs. In addition to these integration attempts, various forms of alliances and outsourcing to specialist companies have now become prevalent. Even among the large pharmaceutical companies, mergers and acquisitions beyond national boundaries are underway for the purpose of attaining a larger scale required for R&D and marketing than that in the early 1990s. This paper describes the strategies and performance of large, integ rated U. S. pharmaceutical companies manufacturing ethical drugs. Players surrounding the pharmaceutical companies such as medical service providers, patients, payers, and government and distribution channels and their influence on pharmaceutical companies are described. Changes in the traditional value chain are described, together with the specialist companies focusing on part of the value chain. In the second part of the paper, the U. S. pharmaceutical industry is analyzed using the concept of the “lead country”driving globalization, cluster theory, and the diamond model. First, the pharmaceutical industry is analyzed for its globalization potential from market, cost, government, and competitive factors. The U. S. pharmaceutical industry is described as a lead country driving further globalization. Then, profitability, productivity, innovation and new businesses of the industry are analyzed to show that the U. S. is qualified as “cluster.” Then the diamond model is applied to the U. S. industry to show how all four of its conditions demand, factor, supporting industry, and rivalry combine to make the U. S. industry the most innovative in the world today. Lastly, the role of the U. S. market and its implications for Japanese companies are briefly described in contrast to actions taken by European companies.

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A Total of 4,492 subjects, aged 65 and over, were evaluated using the Japanese version of the EuroQol (5D and VAS). The ratio responding as having “moderate problems” or “extreme problems” increased with age, even among the elderly, thus confirming and extending the findings from the previous survey. The tree model analysis showed that the geographical area, gender and age did not impact on HRQOL and VAS scores. However, these scores could be estimated relatively well from the IADL items. The IADL item that was most prominent in explaining these scores, and in 4 of the 5D, was “shopping. ” For the remaining 5 D item of “self-care, ” the IADL item was “preparing meals. ” The HRQOL score and VA S score were moderately correlated. However, even for those responding as having “no problems” in all of the 5D, and having a HRQOL score of 1.000, relativel y few had a VAS score of 100, and their mean VAS score was 85.8. Thus, since differentiating with the 5D was difficult for those with minor health proble ms, the value of using both the 5D and VAS was indicated.

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There are considerable differences in the marketing activities of pharmaceutical companies depending on whether their products are OTC drugs or medical drugs. It is advertising propaganda that plays an important role in the marketing agenda of OTC drugs.
This research, which is to examine the role of OTC drug advertising from the consumer point of view, has been carried out for the following reasons; 1) most of the advertising expenses of pharmaceutical companies are paid by TV commercials,2) the OTC drug market is being increasingly used,3)suppliers have become more conscious of OTC drug commercials, and 4) even though all the above events had been taken into account, it is still unknown what the role and effect of OTC drug commercials are. Moreover, the role of advertising when a consumer constructs a brand for a particular drug still requires further investigation.
I have examined my hypotheses based on the consumer information processing theory from the measurement of advertising effectiveness carried out before. These hypotheses were inspected using the concept of an emotional reaction and a cognitive reaction followed by a quantitative study using a questionnaire and a qualitative study by group interviews.
The outcome of the study has revealed the five points listed below.1) Positive emotional reaction from advertising will affect a consumer when he/she buys OTC drugs.2) A consumer will have a better impression from the advertising if he/she has bought the goods before.3) An emotional reaction will affect a cognitive reaction.4) It is the image of improving health that is important for OTC drug advertising.5) The consciousness toward OTC drug advertising will change depending on how consumers respond to it.

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We forecast the amount of pharmaceutical expenditures in an effort to show that special attention should be paid to demographic change and the change of official prices of pharmaceuticals in Japan. Demographic change is the determinant factor that could explain around 90 percert of the variation of pharmaceutical expenditures since 1982. We estimate the growth of pharmaceutical expenditures without regard to the policy change; they will rise to 10% in 2000,20% in 2005, and 30% in 2010 as compared with the level of pharmaceutical expenditures in 1996. At the next stage, we estimate the effects of official price changes for the market price and quantity of drugs, from a log-linear demand function of pharmaceuticals. The standard price elasticity is -0.7, a 10% decline of the official price decreases pharmaceutical expenditures at 3%. In the case of keeping the growth rate of pharmaceutical expenditure at 1.0%, The Japanese government should have to maintain its policy of decreasing official prices by 3% every year.

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The aim of this paper is to investigate the effectiveness of user-charge operation in elderly care. In Japan, the user-charge in elderly care takes two forms: Co-payment and Coinsurance rate. We derive the proposition that each type of user-charge has a different demand impact on outpatient care. The resultant effect of the former crucially depends on the income elasticity of demand. Thus, we have come to conclude that the operation of changing this has a small demand impact on outpatient care because elderly care constitutes a “necessary” service (Engel Curve estimation). On the other hand, that of the latter relies heavily on the price elasticity of demand. In any case, we have reached the same conclusion as above because the price elasticity of outpatient care demand is meaningfully small. Our estimated value of its price elasticity is from -0.105 to -0.085 (consultations per month), from -0.125 to -0.076(probability of consultations). In the Japanese elderly care program, we could not expect that effective demand control by operation is changing the type of user-charge.

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