Anecdotally, two of the most popular investment themes in Japan these days seem to be “Future of Work” and “Aging population.” These terms are so popular that they have almost become cliché among investors here.
However, a valid rationale for these investment themes exists.
Aging population…
It’s well-known now that Japan faces one of the most severe demographic inversions of all developed countries. Japan’s working population will decline from 66m to 35m by 2060. Adult diapers will outsell baby diapers again this year. Japan’s fertility rate in 2017 was 1.43, far short of the estimated 2.07 threshhold necessary to maintain a population.
…affects the future of work in pharma
Like many industries, the aging population trend is drastically impacting Japan’s pharmaceutical sector. Elderly care costs are inevitably rising; in parallel a smaller working base can contribute to supporting these costs.
Bringing further disruption, Japanese regulators are phasing in quotas on non-generic drugs. They are also enhancing restrictions on medical detailing practices, i.e. the pharmaceutical salesmen “golfing junkets” for doctors are rapidly disappearing. The traditional pharma sales model is thus forced to change from its inefficient face-to-face model to a more cost-effective digital model.
With an annual promotional spend by phamaceutical firms exceeding in $20 billion, Japan represents a massive market for this digital transformation.
Enter enTouch
Today we announce our investment in enTouch, a promising Japanese startup that operates at the nexus of these two major trends. enTouch combines the efficiency of digital with the efficacy of a human sales rep. The enTouch platform can deliver complex product information to doctors in a convenient, online manner.
We like enTouch’s solution because both pharmaceutical companies (the clients) and doctors (the end users) seem to like it. enTouch enhances engagement with doctors. It also enables pharmaceutial firms to convey complex information about their medicines in a more efficient manner, thus unlocking substantial cost savings.
We are proud to count enTouch in our portfolio.
